A study by the World Bank determined that the impact of the vegetation fires this year on Indonesia’s economy was double that of the 2004 tsunami that required rebuilding many of buildings and much of the infrastructure in the province of Aceh.
Most of the fires were started intentionally, and illegally, by landowners who want to increase the value of their property before they sell it to companies who will produce palm oil or pulp. Fees from the sale of the land go to several different groups — the term “land mafia” has been used.
Below is an excerpt from an article in the Guardian:
…In a quarterly update on the Indonesian economy, the World Bank said the fires had devastated 2.6 million hectares (6.4m acres) of forest and farmland across the archipelago from June to October.
The cost to south-east Asia’s biggest economy is estimated at 221 trillion rupiah ($16.1bn), equivalent to 1.9% of predicted GDP this year, it said.
In contrast, it cost $7bn to rebuild Indonesia’s westernmost province of Aceh after it was engulfed 11 years ago by a quake-triggered tsunami, with the loss of tens of thousands of lives, the bank said.
“The economic impact of the fires has been immense,” said World Bank Indonesia country director Rodrigo Chaves.
The estimated costs are based on an analysis of the types of land burned and take into account the impact on agriculture, forestry, trade, tourism and transportation, as well as short-term effects of the haze such as school closures and on health.
More than half a million people suffered acute respiratory infections in Indonesia, while many in neighbouring Singapore and Malaysia also fell ill.
On November 2 the United States sent more than 21 metric tons of wildland firefighting equipment to Indonesia to assist the local firefighters.