The Use of ‘Village Funds’ for Community-Based Disaster Risk Financing in Indonesia

Abstract

AbstractDisasters often leave affected regions and societies prone to vulnerability. Regions with strong exposures to risks need to navigate the situation by managing the financial impacts of natural or man-made disasters. In this regard, disaster risk financing is increasingly believed to be a significant tool to reduce vulnerability and increase resilience in disaster-affected regions worldwide. The objective of disaster risk financing has extended beyond financial protection by also giving extra attention in financing the community resilience programme. In the last Global Platform for Disaster Risk Reduction (GPDRR) 2019, the agenda was widely discussed in panels and clearly mentioned in the co-chair summary, reflecting strong political commitment to its implementation. Yet, the model of disaster risk financing developed by donor organisations and also by humanitarian scholars and practitioners predominantly stresses funding instruments from the private sector, such as risk insurance, bound and sovereign fund. This model, although deemed promising in setting the best practices for disaster risk financing worldwide, is still unable to capture the complexity of disaster risk management realities on the ground, especially that of ‘Global South’. The experience and practices in Indonesia suggest that community-based disaster risk financing driven by public investment has created a new instrument and alternative funding for Disaster Risk Reduction. The development shift from centralisation to decentralisation has created a huge space for local administrative to be empowered under the support of ‘Village Fund’. The practices of disaster risk financing in Indonesia suggest that the Village Fund has not only financed the community action plan, but also attracted bigger funding for small-scale mitigation plans, such as the development of water reservoirs and smart agriculture. Based on empirical research, this article investigates the practices of community-based disaster risk financing in Indonesia, particularly in Nusa Tenggara Timur (NTT). Using qualitative methods for data collection, processing and analysis, this paper elaborates complex interactions between different stakeholders in the management of disaster risk financing through the Village Fund. Multiple methods of data collections are used to further elaborate the data: (1) participatory observation, (2) document review techniques, (3) qualitative impact study and (4) semi-structured interview. Empirical findings suggest that in Indonesia different routes of alternative disaster risk financing exist and are proven to work. These alternative ways of disaster risk financing are effective for disaster management in the community level and could be replicated elsewhere.KeywordsDisaster risk financingCommunity-based financingVillage fundsDisaster risk reductionDisaster management