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IDB presents action plan to meet threat of natural disasters in Latin America and Caribbean

NEW ORLEANS -- The Inter-American Development Bank has proposed an action plan to meet the challenge of natural disasters in Latin America and the Caribbean.

IDB President Enrique V. Iglesias said the action plan was drafted after the Bank adopted a disaster prevention strategy in March 1999 to meet member countries’ growing concerns due to catastrophes such as the droughts and floods caused by El Niño, hurricanes George and Mitch, and the earthquake in the coffee-producing region of Colombia.

Iglesias pointed out that in the past four years the IDB has approved $1.5 billion in loans for prevention and reconstruction from natural disasters.

"We want to move ahead with this action plan," said Iglesias, who addressed the opening and Sunday close of a two-day seminar on Confronting Natural Disasters: A Matter of Development. The seminar was one of a series held in conjunction with the IDB Annual Meeting in New Orleans March 23-29.

Among the other speakers were Honduran President Carlos Roberto Flores; Belize Prime Minister Said Musa; Barbados Prime Minister Owen Arthur; and the secretary of social development for Mexico, Carlos M. Jarque.

The IDB action plan, prepared by the Department of Sustainable Development with contributions of regional operations departments, proposes to incorporate risk management in the financial operations of the Bank, applying concepts of prevention and mitigation and evaluating vulnerability and social and environmental impacts.

To identify lessons and best practices, the Bank is reviewing its operations portfolio, beginning with Regional Operations Department II, which includes Mexico, Central America, Haiti, and the Dominican Republic. The exercise will be extended to other countries where the IDB is active.

The Bank also will promote the establishment of information networks and strategic alliances with other international organizations, scientific institutions, and nongovernment organizations to share lessons, encourage joint action, and finance projects that reduce risks and improve response to natural disasters.

One of the mechanisms that the IDB is analyzing would be composed of two financial instruments. One would allow the Bank, in conjunction with bilateral donors, to mobilize grants to the poorest countries to evaluate the risks of investing in specific zones and sectors, as well as the policy framework for preventing disasters and the capacity to respond to emergencies.

The second mechanism would allow each country up to $10 million annually in loans to finance the reform of natural disaster prevention systems and risk management.

In addition to institutional development, this financing could strengthen resources for the reduction of risks, contingency financing agreements, and natural disaster insurance programs.

President Flores of Honduras, which was devastated by Hurricane Mitch in 1998, supported a comprehensive regional action plan.

"To prevent rather than to regret should be the slogan to unite us," Flores said.

Belize Prime Minister Musa said that an essential feature of prevention and mitigation is to have adequate mechanisms to contend with the crises.

Belize, with support of the IDB, is establishing its first national office to manage emergencies. Musa also suggested that the donor community establish regional centers of attention for disasters because international humanitarian aid sometimes arrives too late in affected areas.

Prime Minister Arthur of Barbados emphasized that the costs of natural disasters are becoming greater than the fallout from mistakes in public policy or turbulence in financial markets. For Arthur, one of the most promising mechanisms is the development of financial instruments, such as insurance against disasters.

Secretary Jarque of Mexico gave a detailed description of the sophisticated system of disaster prevention and attention to emergencies that his country developed following the tragic earthquake that hit Mexico City in 1985.

Among other mechanisms, the Mexican model includes risk insurance, temporary work programs to rehabilitate roads, subsidies for construction of homes by homeowners, conservation of education and health services, and a detailed map of risk areas.

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