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Livelihood Recovery after Natural Disasters and the Role of Aid: The Case of the 2006 Yogyakarta Earthquake

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  • Budy P. Resosudarmo
  • Catur Sugiyanto
  • Ari Kuncoro

Abstract

The 27 May 2006 Yogyakarta earthquake caused the death of more than 5.7 thousand people, more than 60 thousand people were injured and hundreds of thousands lost their houses. Bantul district was the most severely affected by the earthquake. This paper is an attempt to understand the determinants of livelihood recovery after this natural disaster and, in particular, the role of aid in that recovery process. A panel firm level survey was conducted visiting around 500 mostly small and micro enterprises in Bantul district twice: 6 months and a year after the earthquake. This paper argues that (1) smaller enterprises are more resilient and so able to bounce back faster, (2) an industrial cluster system within a subdistrict does provide support needed by firms to recover, (3) the quality of village infrastructure could be important, (4) it is important for donors not to give too much assurance of financial support to enterprises, but rather just to distribute it when it is actually available. The faster it is distributed, the better the impact on enterprises affected by the earthquake, and (4) although over a longer period of time, the effectiveness of aid might well diminish, aid does improve a firm’s ability to survive.
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Suggested Citation

  • Budy P. Resosudarmo & Catur Sugiyanto & Ari Kuncoro, 2012. "Livelihood Recovery after Natural Disasters and the Role of Aid: The Case of the 2006 Yogyakarta Earthquake," Asian Economic Journal, East Asian Economic Association, vol. 26(3), pages 233-259, September.
    • Handle: RePEc:bla:asiaec:v:26:y:2012:i:3:p:233-259
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    File URL: http://hdl.handle.net/10.1111/j.1467-8381.2012.02084.x
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    1. Prema-chandra Athukorala & Budy P. Resosudarmo, 2005. "The Indian Ocean Tsunami: Economic Impact, Disaster Management, and Lessons," Asian Economic Papers, MIT Press, vol. 4(1), pages 1-39, Winter.
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    Cited by:

    1. Aloysius Gunadi Brata & Henri L. F. De Groot & Wouter Zant, 2018. "Shaking up the Firm Survival: Evidence from Yogyakarta (Indonesia)," Economies, MDPI, vol. 6(2), pages 1-14, April.
    2. Becerra, Oscar & Cavallo, Eduardo & Noy, Ilan, 2015. "Where is the money? Post-disaster foreign aid flows," Environment and Development Economics, Cambridge University Press, vol. 20(5), pages 561-586, October.
    3. Yoga Affandi & Masagus M. Ridhwan & Irwan Trinugroho & Danny Hermawan, 2023. "Digital Adoption, Business Performance, And Financial Literacy In Ultra-Micro, Micro, And Small Enterprises In Indonesia," Working Papers WP/13/2023, Bank Indonesia.
    4. Yang, Hongbo & Dietz, Thomas & Yang, Wu & Zhang, Jindong & Liu, Jianguo, 2018. "Changes in Human Well-being and Rural Livelihoods Under Natural Disasters," Ecological Economics, Elsevier, vol. 151(C), pages 184-194.
    5. Falentina, Anna T. & Resosudarmo, Budy P., 2019. "The impact of blackouts on the performance of micro and small enterprises: Evidence from Indonesia," World Development, Elsevier, vol. 124(C), pages 1-1.
    6. Affandi, Yoga & Ridhwan, Masagus M. & Trinugroho, Irwan & Hermawan Adiwibowo, Danny, 2024. "Digital adoption, business performance, and financial literacy in ultra-micro, micro, and small enterprises in Indonesia," Research in International Business and Finance, Elsevier, vol. 70(PB).

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    More about this item

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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