A Quantitative Analysis of Disaster Risk Reduction Investment Effects for Sustainable Development: Indonesia Case Study
Ishiwata, Hiroaki; Wada, Hiroyuki; Suzuki, Koji; Ikeda, Makoto; Tada, Naoto | June 2020
Abstract
This paper analyses the long-term impacts of large-scale disasters on the economic growth of developing countries in the Association of Southeast Asian Nations (ASEAN) Community, by the scale of disaster risk reduction (DRR) investments. As a means of quantitatively analysing the optimal level and economic efficiency of DRR investments, a case study was conducted on Indonesia by using a dynamic stochastic macroeconomic model. The results showed that in Indonesia, although greater economic growth is expected when additional DRR investments are made, an excessive DRR investment may contrarily lead to a slowdown in economic growth: an optimal level of DRR investment exists and maintaining its level is essential for sustainable economic growth. Furthermore, it was confirmed that there is a break-even point when the amount of accumulated disaster damage mitigation benefits exceeds the amount of accumulated DRR investment. This demonstrated that the funds invested in DRR could be recovered. Additionally, the results also showed that even if no disaster damage is caused over a long period of time, DRR investments are by no means redundant as the ‘ex-ante risk reduction effect’ will be generated when the optimal level of DRR investment is made. Lastly, it was determined that providing a continuous DRR investment is important in achieving the global target set forth in the Sendai Framework for Disaster Risk Reduction. In addition, it is considered desirable to maintain a higher level of DRR investment than that which is currently being implemented.
Citation
Ishiwata, Hiroaki; Wada, Hiroyuki; Suzuki, Koji; Ikeda, Makoto; Tada, Naoto. 2020. A Quantitative Analysis of Disaster Risk Reduction Investment Effects for Sustainable Development: Indonesia Case Study. © Economic Research Institute for ASEAN and East Asia. http://hdl.handle.net/11540/12201.Keywords
Disaster preparedness
Disaster prevention
Disaster management
Emergency relief
Flood control
Fire prevention
Natural disasters
Man-made disasters
Post-conflict recovery
Fragile states
Governance
Good Governance
Political Leadership
Public Administration
Business Ethics
Governance
Corporate Governance Reform
Governance Approach
Governance Quality
Public Sector Projects
Public Sector Reform
Political Leadership
Political Power
Institutional Framework
Government
Government accounting
Government
Institutional Framework
Public Administration
Business Ethics
Political Leadership
Public enterprises
Public finance
Public enterprises
Localisation
Bureaucracy
Cabinet system
Common good
Executive power
Government
Political obligation
Public management
Government accountability
Transparency in government
Political ethics
Government spending policy
Government services
Democracy
Democratization
Elections
Local government
Government business enterprises
Police power
Local government
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