Every disaster has two faces. The first is passive, waiting for government assistance. The second is a public demanding a swift government response. Both faces emerge 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-hit Aceh Tamiang could be said to be far from recovered.
Disaster-response budgets have fallen sharply—not only in 2026, but ever since the pandemic. BNPB (the National Disaster Management Agency) now has only Rp490 billion, the lowest amount in the past seven years. Basarnas and BMKG have suffered the same fate, hit by budget cuts.
Entrusting disaster management to local governments is not a reasonable option either. Local government spending allocations have been sharply reduced, cut by 20%. Fiscal centralization, which pulls funding resources to the center, is worsening disaster mitigation and response. Budget efficiencies make it difficult for local governments to rent excavators to remove flood mud or obtain adequate 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-Nino driving prolonged drought is expected to ease only in early 2027. The situation is 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 has recorded losses of up to Rp123.1 trillion. To put that in perspective, this is equivalent to 49.1% of all economic activity in Central Kalimantan. The public bears the costs of forest and land fires even after the disaster has subsided.
Health costs are among the largest contributors, reaching Rp93 trillion. A study by the air-pollution research organization CREA points to the same conclusion: forest and land fires could put as many as 1,700 people at risk of premature death. A surge in people seeking treatment at community health centers for acute respiratory infections (ISPA) and declining work productivity are examples of the long-term effects of forest and land fires.
Ecological losses—including the loss of biodiversity, damage to the water-retention systems of peatlands, and the deaths of protected wildlife—cannot be calculated mathematically. But the warning signs before a disaster can already be read. The number of confused Sumatran elephants dying as the routes passed down through generations are replaced by oil palm plantations, mines, or settlements is rising. Orangutans lose the ecosystems that sustain them, then meet a tragic end amid the flames—just a glimpse of what is happening 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 notable finding this time is that fire hotspots have shifted to South Papua. Land clearing for the food and energy estate project is driving land conversion. The construction of 135 km of road cutting through peatland in Merauke is like gasoline ready to be poured onto drying land.
Economic losses also include lost public income, drought, infrastructure damaged by forest and land fires, and people migrating in search of safety. Internal displacement, or temporary migration, is a relevant issue in the movement of people due to climate disasters. Its frequency and scale are increasing globally, from 19.2 million people in 2015 to 45.8 million in 2024, according to data from 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 competing capital. In Indonesia, forests burn and are then planted with oil palms. Areas untouched by disaster become prizes for property speculators. Disaster capitalism also surfaces during forest and land fires in the form of mask and oxygen stockpiling, as well as food shortages during disasters.
Covid-19, the largest humanitarian disaster of the past decade, triggered widespread corruption involving medical equipment and social assistance. Public panic was turned into a race for profits by laboratory-testing companies and health-supply procurement. The pandemic should have taught us that disasters are not just about mitigation and early warnings; we must also look for ways to prevent a handful of parties from exploiting them.
A year full of disasters must be treated as a call to action by policymakers, reflected in budget allocations and oversight of disaster-capitalism practices. When disasters strike, the government must be present so they do not become free markets for speculators. Government presence goes hand in hand with preparedness to calculate the potential losses from each disaster, including those caused by the El Nino dry-weather anomaly.
Disaster Losses
A model for budgeting to address El Nino disasters can 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 amount to 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 long-term healthcare, at Rp93 trillion. This finding is consistent with the 1,700 people at risk of premature death from acute respiratory infections (ISPA). At the same time, there are no pulmonary hospitals in the areas hardest hit by forest fires in Kalimantan and Sumatra. Limited health infrastructure makes the long-term impact even greater.
The calculation of disaster losses should also include the effect of El Nino on food inflation, as food-producing regions—especially rice-growing areas—are disrupted. The impact on poverty can also come faster when rice prices rise. The history of El Nino driving food-price volatility and weakening the rupiah was recorded in 1997. At the time, rice imports surged 30% as rice production fell 3.7% due to prolonged drought, weakening the currency. The ensuing turmoil spread to food inflation, which reached 19.9% at the end of 1997. This year's claim of rice self-sufficiency could be undermined by the El-Nino weather anomaly.
Environmental losses are also substantial, and calculating the total will require collaboration among ecosystem experts. At a minimum, prolonged drought leads to biodiversity loss and increased greenhouse gas emissions. In 2019, 624.2 million tons of CO2 were released into the atmosphere as forest and land fires burned across 1.6 million hectares.
Public Volunteerism Is Not Enough
Disasters on a massive scale cannot be addressed through public volunteerism alone. The public's swift volunteer response during disasters is certainly commendable. Tens of billions of rupiah in donations are raised in a short time, some through digital apps. It is no surprise that Indonesia ranked first in the 2024 World Giving Index, ahead of 142 other countries. The rate of voluntary financial giving to humanitarian programs reaches 90%, while the rate of participation in volunteer activities is 65%. But it is still not enough without the government's presence.
Donations and volunteer work are largely temporary responses made after a disaster has struck. Effective mitigation, however, depends on government agencies—for example, on disaster early-warning technology. And when disaster response requires long-term work, the budget for rebuilding homes and damaged infrastructure remains the government's responsibility.
Public work and donations in response to disasters must not end up displacing the government's responsibilities. This seems to have been misconstrued when the lavish 81st-anniversary ceremony was held and the central government opened a QR code for disaster donations. Yet three procurement packages for the 81st Indonesian Independence Day celebrations were worth Rp22.4 billion, including a Rp300 million dove-release program. The logic of shifting responsibility will push disaster budgets to the sidelines, compared with other programs that are not entirely urgent and show no empathy.
People should see themselves as taxpayers entitled to demand swift government action. The connection between taxpayers and disaster victims can sometimes fade. It needs to be revived in response to the diminished responsibility of the central government.
Mitigation Policy Package
The government now needs to first declare the El Nino disaster a national disaster. The aim is to ensure that the burden of disaster response no longer falls on local governments with limited budgets. It should then focus on increasing the budgets of the various agencies responsible for disasters and the agricultural sector. BNPB, fire departments, and PDAMs must receive adequate funding.
The problem is that the Rp5 trillion disaster contingency fund requires complicated authorization and multiple layers of verification. Each province's BPBD submits a funding request to the central government, with extensive documentation, and not all requests are necessarily approved. Geography also makes the process complicated. Another idea is to submit insurance claims collectively or simultaneously.
The problem is that the insurance pool fund 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 contingency funds and the insurance pool—are different from budget allocations already assigned to agencies such as BNPB, which can be disbursed directly and quickly.
Funds ready for use are clearly no match for the total economic losses from forest and land fire disasters, amounting to Rp123.1 trillion. A year of disasters requires a more effective response. Disasters cut across sectors. The government is therefore being urged to immediately issue an El-Nino Policy Package, allocating funds across ministries and agencies to provide rapid mitigation and long-term responses to El Nino's impacts.
Under current regulations, the government can use Article 20F of the 2026 State Budget Law (UU APBN) to shift government spending when a disaster occurs without revising the state budget. This can be done if the president's priority programs are redirected toward disaster response. The ball is now in the court of the new Finance Minister, Suahasil Nazara, as state treasurer. The 2027 state budget has yet to be approved, and there is still some of 2026 left in which to shift budget allocations.