The forest fires that ravaged parts of Indonesia this year cost the country’s economy approximately $16 billion. According to the World Bank, the amount is more than two times what the country spent after a devastating tsunami struck in 2004.

Slash-and-burn land clearing takes place in Indonesia on an annual basis. But the fires of 2015 were the worst in several years. The blazes caused the air quality to worsen significantly, causing many individuals across the region to become sick.

The World Bank provides quarterly updates on the Indonesian economy, and it announced on Tuesday that this year’s fires had destroyed about 6.4 million acres of farmland and forest across the country between June and October.

The bank further reported that the resulting $16.1 billion in damages across Southeast Asia’s biggest economy is equivalent to 1.9% of the predicted 2016 gross domestic product (GDP).

By way of comparison, it cost Indonesia “only” $7 billion to rebuild and repair the Indonesian province of Aceh after it was essentially destroyed by the infamous quake-triggered tsunami in 2004. In that natural disaster, tens of thousands of people were killed and the city’s infrastructure was all but eviscerated.  

World Bank Indonesia director Rodrigo Chaves noted that, “The economic impact of the fires has been immense.”

In Indonesia, the slash-and-burn method of clearing land is quick and cheap. It is done to make space for the lucrative palm oil farms. Unfortunately, the method is not without side effects. The blazes burn wildly and produce a haze that lasts for months during the dry season.

The World Bank pointed out that the damage far outweighed the benefit of palm oil profits.

World Bank environmental specialist Ann Jeannette Glauber stated that, “So on the one hand 16 billion dollars cost to the public, on the other hand, eight billion dollars – lots of money – to a handful of individuals.”
More than 500,000 people suffered acute respiratory infections throughout Indonesia, while many in closeby Malaysia and Singapore also fell sick.

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