The Indian Ocean tsunami that occurred in 2004 as a result of a bottom earthquake is one of the most destructive natural phenomena of the 21st century. Researchers note “this large-scale, natural disaster resulted in more than 170 000 deaths, displaced half a million people, and devastated large swathes of built infrastructure, arable land, and natural resources along the coast of Aceh” (Frankenberg et al, p. 21). Consequently, the study of the processes of socioeconomic recovery of the country is relevant because of the growing global all-round pressure due to the Covid-19 epidemic. The purpose of this study is to explore how Indonesia was recovering after the events of the 2004 Indian Ocean tsunami.
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Undertaken Economic Recovery Measures
Unbelievable in its scope, the 2004 Indian Ocean tsunami led to the destruction of a significant part of the waterside urban and suburban infrastructure of Indonesia, especially the province of Aceh. It entailed a significant economic downturn and high financial costs in the field of local small and medium enterprises. Besides wage employees, the most affected economic category was representatives of the self-employment area. Rotating Savings and Credit Associations (ROSCA) organization using “group-based mutual financing schemes” decided to maintain and restore the local economic environment (Czura and Klonner, p. 2). These measures contributed to the more rapid regeneration of the Indonesian economy and infrastructure.
Undertaken Social Recovery Measures
The state has taken up the issue of restoring the social sphere of the destroyed territory of the Indonesian coast. For example, immediately after the devastating catastrophe, the government organized the Agency for Rehabilitation and Reconstruction to conduct and coordinate remediation (Stephan et al, p. 38). It is also worth noting that this department was engaged not only in reconstruction but also in the collection and distribution of donor donations.
The Process of Economic Recovery
The essence of the emergency economic policy undertaken by ROSCA was the restructuring and redirection of the bankroll to own-account financial agents. According to Czura and Klonner, “substantial funds were channeled from wage-employed members and commercial investors to small and medium-scale entrepreneurs” (p. 1). Economic support through the collective internal reserves of the financial stock has contributed to the fast recovery and reintegration of business participants into the market.
The Process of Social Recovery
The Agency for Rehabilitation and Reconstruction agency has taken several measures in several key social areas. First of all, it organized a humanitarian aid system, and construction work using public funds and private donations (Stephan et al, p. 33). These works, in addition to the restoration of destroyed residential buildings, also included the creation of shelter systems and public warning systems (Stephan et al, p. 37). These measures saved people and prevented significant human losses in subsequent years.
Time Frame for Economic Recovery
It is worth noting that despite the incredible damage caused by the tsunami, the economy of the province of Aceh very quickly got back on its feet. Studies show that the period of financial recovery took about ten months from the end of December 2004 to October 2005, respectively (Czura and Klonner, p. 8). However, the stabilization of the social aspect of the citizens of Indonesia took much longer.
Time Frame for Social Recovery
In contrast to the economic aspect, social recovery continues. For example, the abnormal growth deficit of children caused by the stressful state of mothers during the 2004 Indian Ocean tsunami eliminated only five years after (Frankenberg et al, p. 21). The systematization and improvement of the early warning system continue to this day, in particular, due to the error that occurs during the alerting of an earthquake in 2012 (Stephan et al, p. 38). This slowness of recovery is caused by some social difficulties.
Difficulties of Economic Recovery
During the economic recovery of the affected coast of Indonesia, ROSCA did not encounter significant complications, both in planning and in practical execution. The reason for this is the balanced structure of the allocation of the credits, taking into account fixed, but small, savings, and large but flexible loans (Czura and Klonner, p. 2). It is also due to the focus of the organization on interaction with local businesses and the fact that many wage workers and self-employed entrepreneurs were regular participants of this monetary fund.
Difficulties of Social Recovery
There are three critical reasons for the slow process of social recovery, given that most have already been overcome. The first difficulty is the low technical qualifications of the personnel responsible for public warning systems (Stephan et al, p. 38). The second reason is the population’s lack of confidence in the security of the city shelter system (Stephan et al, p. 38). It is also worth noting that nowadays these shelters have a low acceptance capacity.
The work explores the economic and social recovery processes that took place in Indonesia after the events of the 2004 Indian Ocean tsunami. The key reason for this study is the new global danger of the Covid-19 epidemic. The undertaken public and private measures, the time frames and the difficulties encountered along the way were reviewed and analyzed. As the results show, the country’s economy is recovering faster than its society.
- Czura, Kristina, and Stefan Klonner. “Financial Market Responses to a Natural Disaster: Evidence from Local Credit Networks and the Indian Ocean Tsunami.” CESifo, 2018, pp. 1-47.
- Frankenberg, Elizabeth, et al. Abstract of “Linear Child Growth after a Natural Disaster: A Longitudinal Study of the Effects of the 2004 Indian Ocean Tsunami.” The Lancet, vol. 389, 2017, p. 21.
- Stephan, Christiane, et al. “How “Sustainable” are Post-disaster Measures? Lessons to Be Learned a Decade after the 2004 Tsunami in the Indian Ocean.” International Journal of Disaster Risk Science, vol. 8, no. 1, 2017, pp. 33-45.