At the 15th meeting of the Consultative Group on Indonesia (CGI) held on 14 June 2006 following the earthquake, a jointly produced preliminary Damage and Loss Assessment of the Yogyakarta and Central Java earthquake was presented. At the meeting, the minister of finance called upon the donors to mobilize donor support through a multi-donor trust fund, similar to the Multi-Donor Fund for Aceh and Nias (MDF). The aim of this strategy was to build on the positive experience and comparative advantages of the MDF, such as: the ability to rapidly develop, finance and implement projects; coordinate international resources around common objectives; avoid duplication of effort; and create synergies and reduce transaction costs for both donors and the recipient. In particular, the Indonesian government appreciates the flexibility of funds inherent to such an approach as these funds can be used to complement its own resources through financing of reconstruction and development activities both on and off-budget.
At the CGI meeting and during the weeks following, six donors: the European Commission, the Governments of Netherlands, United Kingdom, Canada, Denmark, and Finland, pledged to assist in rebuilding the earthquake and tsunami-affected areas of Yogyakarta, Central Java and West Java. All six donors decided to channel the funds through the Java Reconstruction Fund (JRF), a multi-donor trust fund established to coordinate the funds to support the government’s post-disaster recovery program.
In October 2006, the Java Reconstruction Fund (JRF) commenced operations with the mandate to support the rehabilitation and reconstruction of housing and livelihoods.
Yogyakarta and Central Java Earthquake
On May 27, 2006, a 6.2 Richter earthquake killed more than 5,700 and injured almost 50,000 people in Yogyakarta and Central Java. The total damage and losses have been assessed at US$ 3.1 billion. More than 300,000 houses were destroyed or heavily damaged.
West Java Tsunami
On July 17, 2006, along the south coast of West Java, another earthquake measured at 7.7 Richter caused a tsunami killing at least 660 people, 323 people are still missing and more than 51,500 displaced. It caused extensive damage at the West Java beach of Pangandaran.