Rising Sea Levels Threaten Two-Thirds of Indonesia's National Budget, Bappenas Warns

Indonesia faces a severe threat to its national budget (APBN) from rising sea levels, with projections indicating that up to two-thirds of the budget could be eroded if the issue is not addressed promptly. Minister of National Development Planning/Head of Bappenas, Rachmat Pambudy, warned that economic losses could surpass Rp 2,000 trillion by 2029 without significant intervention.

Pambudy highlighted that at least 319 regencies and cities in Indonesia are highly vulnerable to climate change. The estimated economic damage currently stands at around Rp 544 trillion, a figure expected to escalate dramatically in the next four years if global warming and sea-level rise continue unabated. "This means two-thirds of our APBN could be depleted just because of climate vulnerability that we must overcome," Rachmat stated during a National Policy Dialogue on Sea Level Rise on Monday, July 13, 2026.

The North Coast of Java (Pantura) is identified as the epicenter of this risk, given its substantial contribution to the national GDP and the high concentration of industries along its shores. Pambudy stressed that the potential submersion of densely populated coastal areas and industrial zones poses not just an environmental threat but a direct danger to the national economy. Beyond economic repercussions, he outlined other serious impacts: social losses from coastal communities losing access to natural resources, cultural losses as traditions are severed from their ancestral lands, and political consequences including the potential loss of Indonesia's outermost islands, which would diminish the nation's sovereign territory.

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This means two-thirds of our APBN could be depleted just because of climate vulnerability that we must overcome.

Compounding the problem is land subsidence, with some areas experiencing sinking rates of 1 to 20 centimeters per year, particularly severe in Jakarta and Semarang, but also affecting Bekasi, Indramayu, and Demak. In a worst-case scenario, 29 islands could disappear, impacting over 16,500 people, especially in eastern Indonesia's Spermonde Islands in Makassar Strait, which have reportedly faced permanent flooding for three years. In Sayung District, Demak Regency, permanent inundation has already submerged settlements, productive land, and public facilities.

In response, Bappenas is developing three primary mitigation approaches: addressing root causes through restrictions on groundwater extraction and reducing building loads in coastal areas; restoring coastal ecosystems via mangrove rehabilitation and a 12 million-hectare reforestation program; and implementing adaptive policies. The minister emphasized the urgency, stating, "If our islands are lost, then a part of our continental border is lost," underscoring the threat to Indonesia's territorial integrity.

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If our islands are lost, then a part of our continental border is lost.