Private Enterprise and Financial Markets > Environment > Disaster Risk Management
Disaster Risk Management
By Paul K. Freeman, Leslie A. Martin, Joanne Linneroot-Bayer, Reinhard Mechler, Georg Pflug, Koko Warner (11/03, En, Es)
This report was commissioned as part of the Regional Policy Dialogue on Natural Disasters of the Inter-American Development Bank (IDB) to examine national systems and institutional mechanisms for the comprehensive management of natural disaster risk. Latin America and the Caribbean are only too familiar with the devastating impact of hurricanes, floods, earthquakes, landslides, volcanic eruptions, and other natural disasters. With an average of 40 significant disasters a year, Latin America is second only to Asia in frequency of disasters affecting the region.
Natural hazard policies in much of Latin America and the Caribbean have traditionally focused on establishing efficient disaster response. However, modernization of the systems calls for a more comprehensive vision of disaster risk management that includes an emphasis on prevention and mitigation and strives to involve citizens and the private commercial sector. In this respect, the Regional Policy Dialogue on Natural Disaster commissioned a two-stage study focused on understanding national, integrated disaster risk management systems and the related financing, a report which is based upon literature reviews, case studies, and consultation with experts regarding the existing good practices of natural disaster risk management programs worldwide.
While the first phase of the study discusses the components of a national system, the second focuses on instruments for financing reconstruction after a disaster. The research compares centralized, government-directed management systems with those that are localized and decentralized, and also analyzes the factors affecting the financial and political stability of alternative approaches. As natural disasters may result in major resource gaps for governments facing the task of financing reconstruction, the report presents case studies of four countries?Bolivia, Colombia, the Dominican Republic, and El Salvador?to highlight the various policy options. Alternative sources of ex ante funding are identified, including reserve funds, contingent credit, and insurance. These innovative methods of funding are compared with ex post funding possibilities through international aid, loan diversions and increased external debt, budget reallocations, and tax increases.
In dealing with the management of natural disasters, Latin America and the Caribbean have made a gradual shift from an ex post response approach toward a system concerned with investments in prevention and mitigation. The main challenge facing governments is to incorporate these preventative investments with planning for possible reconstruction as part of the overall strategy for disaster risk management. In this respect, the authors aim to demonstrate the wide range of policy options available, which will prove to be contingent upon the circumstances of each country.
Last updated: 06/12/07
