Study on business resilience factors toward earthquake and tsunami – A case study of Padang city

As as the Capital of West Sumatera Province and as the largest city at the West Coast of Sumatera, the City of Padang has been assigned as one of the National Activity Center for Regional Economic Development. The city will be developed as a metropolitan city, which will be very much relied on the multi sectoral support such as business, services, industry, and tourism sectors. However, the city is located at a very high-risk zone for earthquake and tsunami. After 2004 Indian Ocean Tsunami, the city has been stricken several times by large earthquake and tsunami threat, for example in 8.4 M September 2007 and 7.6 M September 2009 causing major casualties, severe damages, great economic loss as well as tsunami threat to the people. Without disaster risk reduction based development planning, the goal of Padang as metropolitan and National Activity Center is difficult to be achieved. Knowing the level of risk and its appropriate countermeasures from the perspective of business resilience becomes very important. Thus, this paper will present the detail study on business reliency for the Padang City, starting from (i) Earthquake and Tsunami Risk Assessment from the perspective of preparedness for Business in Padang Barat Subdistrict of Padang City, (ii) Assessment of resiliency level of Padang City Business after the 2009 event, and (iii) recommendation for considering the Business Resilience factors as part of DRR based CBD development Plan of Padang Barat sub district - Padang City. This study is not only able to identify physical and nonphusical aspect of business characteristic, but it has identified four major components of Bussiness Resiliency Indicators, i.e. Swift Recovery Factors (RR), Experience and Knowledge to Disaster (PP), Emergency Response Plan (RT) and Asset Protection (PA). Each major indicator consists of several indicators, with 19 total indicators. Further investigation on these indicators shown that total performance value of business resiliency is 65,36%, which means that Small, Micro and Medium Business in Padang City are resilient toward earthquake and tsunami. Some indicators show their performance value below minimum limit of 55%. Such as 48.84% for Knowledge and Experience to Disaster (PP) which comprised of several low knowledge and low preparedness among business, has led to the need for an intensive and extensive public education program for business community. While the low performance value of Assett Protection indicators has been influenced by the low performance value of insurance, i.e. 42,22% below minimum limit, meaning that a government intervention to promote risk transfer mechanism via insurance is needed. Among the four major components of Bussiness Resiliency Indicators, the component of Asset Protection Indicators (PA) shows the strongest correlation with non-physical aspects of business characteristic, i.e. the length of business and omzet. The performance value of the 19 Business Resiliency factors and its correlation with physical and nonphysical business characteristics are very important to be considered in improving CBD development plan as part of city zoning in order to achieved a resilience central business districts (CBD).