Strategies and Financial Instruments for Disaster Risk Management in Latin America and the Caribbean
By Kari Keipi, Stuart Miller (05/05, ENV-145, En) See also Environment and Natural Resources
Natural hazards continue to have an impact on the development of Latin America and the Caribbean. Human and economic losses remain high and there is a continued need to design strategies that reduce risk and minimize sovereign losses as well as those experienced by the Inter-American Development Bank. The implementation of well-designed risk management strategies can reduce future damages. The appropriate use of financial tools can conduce to the attainment of the region?s development objectives in spite of the occurrence of natural hazards.
Although disasters have a simultaneous impact on many different persons and institutions, it is often uneven. The various parties face varying pre-disaster risks and bear different post-disaster losses. In evaluating disaster risk management strategies, this paper draws together asymmetries in both pre-disaster planning and post-disaster recovery. The authors analyze various financial tools available to reduce or finance disaster risk. They also examine underlying incentives affecting the implementation and effectiveness of financial instruments.
This document is part of a set of papers produced by the Environment and the Infrastructure and Financial Markets Divisions of the Sustainable Development Department. These papers originally stem from a request of the Quebec Hemispheric Summit in 2001, which asked the IDB to analyze the applicability of various instruments for reducing disasters in Latin America and the Caribbean. However, they also serve as background for revising the Bank?s Disaster Policy, whose aim is to safeguard lives and advance progressive social and economic development in Latin America and the Caribbean. The Bank?s vision of sustainable growth for the region requires that careful attention be paid to the topic of disaster risk management.
The unique nature of disaster risk means that much work is needed to model and analyze best practices both on the national and local levels. We hope that this document will make a useful contribution to the field.
Last updated: 05/08/07
