The Sumatra Earthquake: A Humanitarian Crisis

By Kristin Sundell

On September 30^th, a 7.9 magnitude earthquake devastated western Sumatra, killing upwards of 3,000  people.  Hundreds of schools were flattened along with tens of thousands of other public buildings.  In Padang, a city of 900,000 people near the epicenter of the earthquake, nearly all of the buildings were damaged and roughly a quarter were demolished.

Indonesian government officials have estimated that at least $600 million will be needed to repair basic infrastructure damaged by the earthquake.  Countries around the world have pledged and sent humanitarian assistance, but it is not enough to enable Indonesia to rebuild.  Meanwhile, Indonesia continues to send almost $9 billion every year to foreign governments and international financial institutions in payment on its foreign debt.

West Sumatra sits on one of the world’s most volatile fault lines, the same one responsible for the tragic earthquake and tsunami of December 2004, which killed over 200,000 people in 11 countries.  Geologists say that the region will experience an even deadlier earthquake in the coming years.  It is essential that the necessary resources are invested now to ensure that homes and public buildings can withstand future earthquakes.  Jubilee colleagues in Indonesia, including the Koalisi Anti-Utang (KAU/Anti-Debt Coalition) are calling on the Indonesian government to reallocate the money currently slated for debt repayment to finance reconstruction and to prepare for future disasters.  They are also urging the Indonesian government not to take on new loans to finance disaster response.  According to KAU Chairman Dani Setiawan, “Addition of new debt will only add to the burden on the state budget and preserve creditor intervention in economic policy making and Indonesian politics.”

When we hear of a natural catastrophe somewhere in the world, our first impulse is often to pull out our wallets.  Direct assistance to western Sumatra is definitely needed, but as Jubilee activists we must also amplify the voices and support the calls of our Southern partners by advocating for change in our government’s positions.  At minimum, the United States should support the complete suspension of Indonesia’s international debt payments until the country has fully recovered from the September 30 earthquake.  All international assistance in response to the disaster should come in the form of direct support or grants rather than additional loans. 

Beyond the current humanitarian crisis, Indonesia’s debt should have been cancelled long ago on grounds of odiousness.  Indonesia’s tremendous debt burden dates back to the brutal and corrupt Suharto dictatorship.  According to a 1997 leaked World Bank memorandum on corruption in Indonesia, World Bank resident staff believe that at least 20 – 30% of Indonesian development budget funds were siphoned off into the private accounts of the Suharto family and other government employees.  The memo also states that World Bank controls had “little practical effect” on such corrupt practices.  Despite these findings, the lending continued and the odiousness of Indonesia’s debt has never been addressed.