Private Enterprise and Financial Markets > Environment > Disaster Risk Management
Planning and Financial Protection to Survive Disasters
By Kari Keipi, Justin Tyson (10/02, ENV-139, En, Es)
Natural disasters have always been a part of the physical and human landscape in Latin America and the Caribbean and they will continue to have a significant impact on the development of the region. Experience has shown that the economies of developing countries such as those in Latin America and the Caribbean are more vulnerable to losses than the developed economies. They also suffer more fatalities. There is an urgent need to manage risk in the region.
Risk management and emergency response need to be very clearly distinguished. Risk management calls for ex ante planning and investments to reduce vulnerability while emergency response involves ex post expenditures which may be greatly reduced through ex ante planning and investments in prevention and mitigation.
While the occurrence of natural events can not be prevented, there is a possibility to reduce the vulnerability of populations through risk management. The IDB Action Plan for natural disaster risk reduction of 2000 included recommendations in two important areas: (i) planning with the purpose of the identification and reduction of risk by integrating prevention and mitigation measures into development plans and programs and (ii) financial protection, provided by the transferring of risk to others or spreading it in time. This paper deals with both of these aspects.
Without adequate risk management disasters may seriously threaten the development objectives by the borrowing member countries and jeopardize successful implementation of Bank mission in the region. There is a special need to balance risk reduction with risk transfer.
An important incentive to the preparation of the present document was given by the request to the Bank by the Hemispheric Summit in Quebec City of April 2001. It asked the IDB to analyze the applicability of various financial instrument for disaster risk reduction in Latin America and the Caribbean. This paper is the first in a series to address this issue.
The ongoing discussions of the Policy and Evaluation Committee of the Board of Directors of the Bank on the theme of disaster risk management further inspired the writing of the document. It is one of the themes to be addressed in the carrying out of the Bank?s vision of environmentally sustainable economic growth in Latin America and the Caribbean in the coming years.
Last updated: 06/12/07
