Every disaster has two faces. The first is passive, waiting for government assistance. The second is the public demanding a swift government response. Both faces will be seen in various disasters, from floods in Sumatra to forest fires. Passively waiting for government assistance is not a solution amid spending cuts. As of mid-September, the economy of flood-stricken Aceh Tamiang could be said to be far from recovered.
Disaster-management budgets have fallen sharply, not only in 2026 but ever since the pandemic. BNPB (National Disaster Management Agency) now has just Rp490 billion, its lowest budget in the past 7 years. Basarnas and BMKG have suffered the same fate, hit by budget cuts.
Handing disaster management over to local governments is not a reasonable option either. Local government spending allocations have been sharply cut by 20%. Fiscal centralization—drawing funding resources to the center—has worsened disaster mitigation and response. Budget efficiency measures are making it difficult for local governments to rent excavators to remove mud left by floods, or to obtain proper firefighting equipment at forest and land fire sites.
A Year of Disasters
Disaster levels are expected to remain high through next year. The Godzilla El Niño, which is triggering a prolonged drought, is forecast to subside only in early 2027. Matters are made more complicated by problematic peatland management and chaotic land concessions, like gasoline poured onto a fire. More than 200,000 hectares of land and peatland have burned.
Using economic and health models, CELIOS estimates losses of up to Rp123.1 trillion. To put that figure into perspective, it is equivalent to 49.1% of total economic activity in Central Kalimantan. The costs of being affected by forest and land fires are borne by communities even after the disaster has subsided.
Health costs are one of the largest contributors, reaching Rp93 trillion. A study by the air-pollution research organization CREA shows the same thing: the risk of premature death due to forest and land fires could affect more than 1,700 people. A surge in people seeking treatment at community health centers for acute respiratory infections (ARI), and declining work productivity, are examples of the long-term impacts of forest and land fires.
Ecological losses—including biodiversity loss, damage to the water-buffering systems of peatlands, and the deaths of protected wildlife—cannot be quantified mathematically. But the conditions leading up to a disaster can already be seen. More and more Sumatran elephants are confused and dying because routes passed down through generations have been replaced by oil palm plantations, mines, or settlements. Orangutans lose the ecosystems that sustain them and end tragically amid the flames—just a glimpse of the facts on the ground. And it is not only Sumatran elephants and orangutans: cassowaries and hundreds of other animal species are threatened in Papua.
Compared with forest and land fires over the past 10 years, one striking finding this time is that fire hotspots have shifted to South Papua. Land clearing for food and energy estate projects is driving land conversion. This includes the construction of 135 km of roads cutting through peatland in Merauke—like gasoline ready to be poured onto drying land.
Economic losses also include lost community income, drought, infrastructure damaged by forest and land fires, and people migrating in search of safe places. Internal displacement, or temporary migration, is a relevant issue in connection with population movements caused by climate disasters. Its frequency and scale continue to rise globally, from 19.2 million people in 2015 to 45.8 million in 2024, according to the Global Internal Displacement Report.
Who continues to profit amid forest and land fire disasters? The answer is disaster capitalism. Naomi Klein wrote The Shock Doctrine about the emergence of interest groups that turn disasters into arenas for the struggle for capital. In the Indonesian context, forests burn and are then planted with oil palm. Areas untouched by disaster become the subject of property speculators’ bidding wars. Disaster capitalism also emerges during forest and land fires in the form of hoarding masks and oxygen, as well as food shortages while a disaster is unfolding.
Covid-19, the biggest humanitarian disaster of the past decade, triggered widespread corruption involving medical equipment and social assistance. Public panic was turned into a profit race for laboratory testing companies and health-goods procurement. The pandemic should have taught us that disasters are not just about mitigation and early warnings; we must also look for opportunities for a handful of parties to profit.
A year of disasters should be understood as a call to create a sense of urgency among policymakers, through budget allocations and oversight of disaster-capitalism practices. When disasters occur, the government must be present so that disasters do not become free markets for speculators. Government presence is linked to readiness to calculate the potential losses from each disaster, including those caused by El Niño’s dry-weather anomalies.
Disaster Losses
A model for budgeting to address El Niño disasters could begin with valuing economic, environmental, and health losses. Some of these three main components have already been calculated. For example, the economic and health costs total Rp123.1 trillion. By region, West Kalimantan recorded the largest nominal impact, at Rp5.7 trillion, followed by West Papua (Rp4.3 trillion) and East Nusa Tenggara (Rp2.8 trillion).
The largest cost is indeed the long-term health burden, which reaches Rp93 trillion. This finding is consistent with the 1,700 people at risk of premature death due to acute respiratory infections (ARI). At the same time, there is no pulmonary hospital in the worst-affected forest-fire areas of Kalimantan and Sumatra. Limited health infrastructure makes the long-term impact even greater.
One factor that needs to be added to disaster-loss calculations is the impact of El Niño on food inflation when food-producing areas—especially rice-growing regions—are disrupted. The effect on poverty can also come more quickly when rice prices rise. The history of El Niño-driven food-price volatility and a weakening rupiah was recorded in 1997. At the time, rice imports surged by 30% as rice production fell 3.7% because of a prolonged drought, weakening the exchange rate. The subsequent turmoil spilled over into food inflation, which reached 19.9% at the end of 1997. This year’s claim of rice self-sufficiency could be disrupted by the El Niño weather anomaly.
Environmental losses are also substantial, and calculating the total requires collaboration among ecosystem experts. At the very least, prolonged drought leads to biodiversity loss and increased greenhouse gas emissions. In 2019, 624.2 million tons of CO2 were released into the atmosphere when forest and land fires affected 1.6 million hectares.
People’s Volunteerism Is Not Enough
Disasters on such a massive scale cannot be addressed through community volunteerism alone. The public’s responsive volunteer efforts during disasters are certainly commendable. Tens of billions of rupiah in donations are collected in a short time, some through digital applications. It is no surprise that Indonesia ranked first in the 2024 World Giving Index, ahead of 142 other countries. The rate of people voluntarily giving financial assistance to humanitarian programs is 90%, while the rate of participation in volunteer activities is 65%. But this is still not enough without the government’s presence.
Donations and volunteer work are mostly temporary responses made after a disaster has already occurred. Effective mitigation, however, depends on government agencies—for example, disaster early-warning technology. And when disaster response requires long-term work, funding to rebuild homes and damaged infrastructure remains the government’s responsibility.
Community work and donations in response to disasters must not end up shifting the government’s responsibilities. This seems to have been misunderstood when the 81st Independence Day ceremony was held on a grand scale and the central government opened a QR code for disaster donations. Yet the three procurement packages for the 81st Independence Day celebrations were worth Rp22.4 billion, including a Rp300 million dove-release program. The logic of shifting responsibility will relegate disaster budgets to second place compared with other programs that are not entirely urgent and show no empathy.
Citizens must see themselves as taxpayers with the right to demand swift government action. The connection between taxpayers and disaster victims sometimes fades. It needs to be brought back to life in response to the central government’s diminishing responsibilities.
Mitigation Policy Package
The first thing the government needs to do now is declare El Niño a national disaster. The aim is to ensure that the burden of disaster response no longer falls on local governments with limited budgets. The government should then focus on increasing budgets for the various agencies responsible for disasters, as well as for the agricultural sector. BNPB, fire departments, and PDAMs must receive adequate funding support.
The problem is that the Rp5 trillion disaster emergency fund requires authorization that remains complicated, with multiple layers of verification. The process involves BPBDs in each province applying to the central government; there is a lot of paperwork, and approval is not guaranteed. Geography also makes the process difficult. Another idea is to submit insurance claims collectively, or all at once.
The problem is that the insurance pool requires multiple layers of verification and bureaucracy. Insurance claims during a disaster must be submitted simultaneously by those affected. Both options—the use of disaster emergency funds and the insurance pool—are different from budget allocations already assigned to agencies such as BNPB, which can be disbursed directly and quickly.
Emergency funds are clearly no match for the total economic losses from forest and land fire disasters, at Rp123.1 trillion. A year of disasters calls for a more effective response. Disasters cut across sectors. The government is therefore being urged to immediately issue an El Niño Policy Package, allocating funds across ministries and agencies to enable rapid mitigation and long-term management of El Niño’s impacts.
Under existing regulations, the government can use Article 20 F of the 2026 State Budget Law to reallocate government spending when a disaster occurs without amending the state budget. This can be done if the president’s priority programs are shifted toward disaster response. The ball is now in the court of the new Finance Minister, Suahasil Nazara, as the state treasurer. The 2027 state budget has yet to be approved, and there is still time remaining in 2026 to reallocate funds.