Managing Disaster Risks for Resilient Development

Report
from World Bank
Published on 12 Apr 2013 View Original

Disasters disproportionately affect the poor and vulnerable. In light of the alarming global trend of rising disaster losses, disaster and climate risk management is increasingly at the core of World Bank work. Investments are helping to protect millions of lives and livelihoods and safeguard growth in key socio-economic sectors. To respond to increasing client demand, the World Bank, with the United Nations and some bilateral donors, founded the Global Facility for Disaster Reduction and Recovery (GFDRR) in 2006 to leverage new investment, generate knowledge and expertise in disaster risk management, and build a global partnership to mainstream disaster risk management into development.

Challenge

The most costly year on record for natural disasters was 2011, with estimated losses of US$380 billion, continuing a 30-year upward trend. Between 1980 and 2011, disasters caused more than 2.5 million deaths and US$3.5 trillion in economic damages and loss across the world.

Disaster risk is increasing mainly as a result of growing exposure of people and assets to natural hazards. Detailed analysis shows that the biggest driver of disaster risk in recent years has been the substantial growth of population and assets in at-risk areas. Migration to coastal areas and the expansion of cities in flood plains, coupled with inappropriate building standards, are among the main reasons for the increase. The degradation of ecosystem buffers like mangrove swamps also increases hazard risk.

Hydro-meteorological disasters are responsible for almost 80 percent of adverse natural events and 75 percent of losses. Looking ahead, climate change will have major implications on global ecosystems, agriculture and water supply, sea level rise and storm surges. Historical patterns alone will no longer be a good basis for planning. Effective climate risk adaptation strategies help manage disaster risk in the medium-term, while reducing vulnerability over the longer term.

Solution

Disaster risk management was universally endorsed as a development priority through the Hyogo Framework for Action (HFA) in 2005. This framework is an agreement signed by 168 governments and international organizations, including the World Bank Group and the United Nations, to support disaster prevention across the world.

The World Bank is responding to the growing demand from its clients, building disaster resilience through five core areas focusing on:

Risk Identification: By understanding disaster risks and anticipating the potential impacts of natural hazards, disaster and climate risk assessments can help governments, communities, businesses and individuals make informed decisions to manage that risk.

Risk Reduction: Disaster risk information can inform different development strategies, plans and projects that can in turn reduce risks. This can either be done by avoiding the creation of new risks by mainstreaming in new investments, or improved territorial planning or building practices, or by addressing existing risks, such as retrofitting critical infrastructure, the construction of embankment systems etc.

Preparedness: Adequate preparedness measures are essential because disaster risk can never be completely eliminated. Preparedness through early warning systems save lives and protect livelihoods and is one of the most cost-effective ways to reduce the impact of disasters. Preparedness activities need to include actionable contingency plans down to local and community level to respond to the effects of disasters.

Financial Protection: Financial protection strategies protect governments, businesses and households from the economic burden of disasters. These strategies can include programs to increase the financial capacity of the state to respond to an emergency, whilst protecting the fiscal balance. They also promote the deepening of insurance markets at a sovereign and household level, and social protection strategies for the poorest.

Resilient Reconstruction: The challenge of reconstruction also presents an opportunity to promote disaster risk management through integrated resilient recovery and reconstruction planning that will drive longer-term resilient development.

World Bank President Jim Yong Kim spoke at an international dialogue in Sendai, Japan, after touring areas affected by the country's 2011 earthquake and tsunami.

Results

The growing strategic commitment of the World Bank to disaster risk management is reflected in the number of Country Assistance and Partnership Strategies (CASs/CPSs) that now consider disaster and climate risks in their approach to development. Based on a review of a representative sample of 80 CASs in 2012, 75 percent recognized natural hazards as a challenge to sustainable development, up from 46 percent in 2006. This increase is spread across regions and country income groups. This signals a shift from a historical tendency to treat disasters as interruptions to development towards seeing them as risks that should be proactively managed in an integrated way.

The Bank has played a pivotal role in the development of innovative disaster risk financing solutions to decrease the financial vulnerability of developing countries to disasters. Through innovative instruments and investments, International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA) assistance has provided support for countries exposed to adverse natural events. For example, the world’s first regional disaster financing facility, the Caribbean Catastrophe Risk Insurance Facility (CCRIF), was established in 2007 to provide access to short-term liquidity for Caribbean governments in the aftermath of disasters. In addition to technical assistance in the establishment of the facility, the World Bank financed the cost of joining the facility for a number of Caribbean Community (CARICOM) countries, and contributed to the Multi-Donor Trust Fund, which served as the initial supporting capital for the facility. Within two weeks of the 2010 Haiti earthquake, CCRIF transferred US$8 million to provide immediate liquidity to the government. A similar approach is being developed in the Pacific. The Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI) is operationalizing the results of an extensive risk assessment across 15 Pacific nations, including a pilot program covering five countries to test the feasibility of market-based sovereign catastrophe risk transfer instruments to reduce the country financial vulnerability to natural disasters.

Following the 2005 earthquake in Pakistan, the World Bank committed about US$1 billion to recovery and reconstruction efforts. Achievements include the provision of timely shelter support to 550,000 people and the reconstruction of more than 400,000 earthquake-resistant houses. More recently, supported by the World Bank’s engagement, the Government of Pakistan (GoP) has created a National Working Group on Risk Assessment with the mandate to provide strategic guidance and coordinate all activities related to risk assessments in the country.

The World Bank/GFDRR, with United Nations Development Programme (UNDP) and European Union (EU) partners, has scaled up its support to drought-prone countries in the Middle East and North Africa and in Africa, performing Post-Disaster Needs Assessments (PDNAs) following the severe drought crisis affecting the Horn of Africa and the Sahel regions. These timely interventions are spearheading the risk management dialogue across ministries while linking short-term crisis mitigation with long-term development objectives, both at country and regional levels. In Djibouti in 2011, the timely PDNA facilitated the mobilization of US$13 million for drought mitigation in the rural, social and energy sectors. This program is currently supporting the development of a productive national safety net, increasing access of rural communities to water and enhancing their capacity to manage water and agro-pastoral resources and providing short-term emergency energy support to the energy poor.

In middle-income economies, IBRD loans have enabled countries to assess and manage disaster risks effectively. In 2005, the Bank supported Colombia with a US$260 million loan to strengthen the capability of the national and local disaster risk management system in about 1,000 municipalities. The second phase of this program started in 2006 with an additional US$80 million loan to support the city of Bogotá to strengthen its capacity to manage disaster risks and reduce vulnerability in key sectors. Results of this project include the resettlement of 5,000 households living in high-risk areas to permanent housing in safe areas; retrofitting of 201 schools and kindergartens to seismic-resistant standards; and the reduction of the population at risk in public buildings from 575,000 to 252,000.

The US$550 million IBRD loan to the Seismic Risk Mitigation and Emergency Preparedness project in Istanbul, Turkey, improves the city’s preparedness for a potential earthquake through enhancing the institutional and technical capacity for disaster management and emergency response, strengthening critical public facilities for earthquake resistance, and supporting measures for better enforcement of building codes. Bank financing catalyzed another US$1 billion in parallel funding from other financiers to support the program. As of today, 681 public buildings were retrofitted and 21 buildings were reconstructed. A comprehensive digital inventory of cultural heritage buildings in Istanbul with their vulnerability assessments, as well as designs for the strengthening and preservation of selected historical buildings in Istanbul were developed. As part of the Public Awareness and Neighborhood Community Volunteers programs, there were 450,000 people trained in disaster preparedness, and estimated 5 million citizens reached via social and public media. A training program in the retrofitting code was provided to 3,630 engineers throughout Turkey.

IBRD loans have also assisted in the sustainable and disaster-resilient recovery of affected communities. The World Bank is supporting China with a US$710 million IBRD loan to restore infrastructure, health and education services in the Sichuan and Gansu provinces that were damaged or destroyed after the 2008 Wenchuan earthquake. The project runs until 2014, and supports the government’s reconstruction strategy articulated in the National Master Plan for Rehabilitation of the Wenchuan Earthquake, which was developed with support from GFDRR. As part of this Master Plan, a total of 4.4 million houses have been repaired and 2.2 million houses are being reconstructed. Destroyed schools and hospitals, retirement homes, community centers and other public service facilities are also being restored or rebuilt. The construction of all new buildings is subject to high seismic and flood risk standards and experts are supervising every step to ensure lives are not lost in the future.

Other IBRD financial instruments customized for disaster risk management include the development policy loan (DPL) with a Catastrophe Deferred Drawdown Option (Cat-DDO), which is an ex ante contingent financing instrument available for IBRD countries. It offers immediate budget support to cover urgent financing needs in the aftermath of a national disaster while other resources, including national, bilateral aid, or reconstruction loans, are mobilized. Of the sixteen disaster risk management-related DPLs the World Bank has approved since 2008, eight included a CAT-DDO to enhance the capacity of governments to manage the impact of natural disasters. Colombia, Costa Rica, El Salvador, Guatemala and the Philippines have drawn down funds from the instrument, in payouts of US$150 million, US$24 million, US$50 million, US$85 million and US$500 million respectively, to engage in immediate post-disaster recovery and reconstruction activities.

Some highlights of results achieved in IDA-supported projects include:

Sri Lanka: A significant share of the IDA support from the Tsunami Emergency Reconstruction Program I and II (US$75 million each), helped to reconstruct approximately 44,000 damaged houses, with over 100,000 families benefiting from livelihood cash grants, the first installment of which was paid within three months of the tsunami.

Ethiopia: Approximately 7.8 million rural inhabitants received support under the IDA Productive Safety Net Adaptable Program Loan (APL) II Program through workfare or grants in response to localized intermediate or severe drought conditions between 2007 and 2009.

Bangladesh: After Cyclone Sidr in 2007, over 1.7 million households benefitted from the construction of approximately 50 new cyclone shelters and repairs to another 250 existing multi-purpose shelters. In addition, over 100 kilometers of embankments were rehabilitated.

Togo: Over 52,000 people in poor neighborhoods were protected against the 2010 floods through the Emergency Urban Infrastructure Rehabilitation Project. The project cleared over 70 kilometers of storm drains in areas facing flood risk, which allowed rainwater to flow where previously it would flood, rehabilitated roads, provided a 1,000-bed emergency center and connected underserved communities to the electricity network.

Vietnam: Over 210,000 people living in 30 villages are now prepared for disaster events, with local early warning and evacuation systems, disaster action plans, 12 new or upgraded storm shelters, and 165 safe schools and health care facilities that had been damaged by recent storms.

"There were warnings, but nothing could really prepare us for what happened. Cyclone Sidr hit my hometown, Barguna with ferocious intensity. Powerful gusts of winds and heavy rainfalls frightened the helpless people, many of whom had left their homes and possessions to seek the protection of cyclone-shelters, like my school."
Hasina Begum
Headmistress of Paschim Napitkhali Primary School in Barguna, Bangladesh

Bank Group Contribution

Between 2008 and 2012, the World Bank financed 92 disaster prevention and preparedness operations (US$ 6.5 billion) and 53 disaster reconstruction operations (US$2.7 billion). Within the urban, water, agriculture or rural development sectors, these operations have built-in disaster risk management as core components of the project design in an effort to mainstream disaster risk management into development.

New IDA investments have been triggered by large-scale disasters of recent times. Furthermore, emergency recovery loans financed by both IDA and IBRD have been approved to restore public services and infrastructure in the wake of recent disasters. However, there is still more to be done to integrate an assessment of disaster risks systematically into the design and implementation of World Bank-financed projects.

Partners

In disaster-prone countries, the World Bank often plays a role in coordinating donor efforts both in ex-ante investments in risk reduction and ex-post assistance for resilient reconstruction and recovery. The World Bank develops partnerships through technical and financial assistance to national governmental agencies and non-governmental organizations tasked with the challenge of protecting their country from the impact of disaster events.

GFDRR: As a partnership financing mechanism, the Global Facility for Disaster Reducation and Recovery includes 43 country governments from developed, emerging and developing countries, as well as eight international organizations. Recognizing the need for partnership and synergy in the post-disaster context, the World Bank, the United Nations (UN) and the European Commission entered into a Joint Declaration on Post-Crises Assessments and Recovery Planning in 2008 to improve the coordination of support offered to governments affected by disasters. This declaration promotes a harmonized approach to the Post Disaster Needs Assessment (PDNA), in which a multi-disciplinary team—led by client government and comprising members from the World Bank, the UN, donors and others—typically guides post-disaster recovery strategy in partnership with a wide range of stakeholders.

Disaster Risk Financing and Insurance Program: The Disaster Risk Financing and Insurance Program maintains a continuous dialogue with the private insurance sector, leveraging both: (i) the sector’s expertise through promoting the provision of risk information and market knowledge as public goods and (ii) its risk-carrying capacity through supporting countries in accessing appropriate market-based solutions for their risk financing needs.

Random Hacks of Kindness: Increasingly, partnership is taking on new and innovative forms, including through expert communities and civil society. For example ‘volunteer technical communities’—who are most often technical professionals with deep expertise in geographic information systems, database management, social media, and/or online campaigns—apply their skills to some of the most complex aspects of disaster risk management, such as mapping risk and evaluating mitigation options. Random Hacks of Kindness (RHoK), a public-private-people partnership, which includes the World Bank, Google, Microsoft, Yahoo!, the National Aeronautics and Space Administration, and Hewlett-Packard, brings together 150 government, private sector and civil society partners supporting the initiative around the globe.

InaSAFE: Another example of an innovative partnership is the development of the Indonesia Scenario Assessment for Emergencies, InaSAFE, which provides a practical tool for local planners to understand and communicate hazard impacts. The initiative was developed in partnership with the Indonesian National Agency for Disaster Management (BNPB), the Australia-Indonesia Facility for Disaster Reduction (AIFDR), GFDRR and the World Bank, the Australian Agency for International Development (AusAID) and Open Street Map. The tool is useable by anyone with basic computer skills and supports the GFDRR Open Data for Resilience Initiative (Open DRI).

Moving Forward

The World Bank will provide timely, cutting-edge disaster risk management knowledge and expertise to partner countries, and will continue to mainstream disaster risk management across all sectors of investment. The World Bank will support countries in the development and use of risk information, further development of country and sector risk profiles, capacity building in disaster risk assessment, and the use of spatial and structural risk analyses to inform investment planning. The World Bank will strive to scale up technical assistance and targeted disaster risk management financing to high-risk developing countries that lack the resources and capacity to invest in long-term risk reduction activities. In addition, the Bank will increase its advisory support for financial exposure profiles, risk financing strategies and sustainable domestic catastrophe risk insurance markets.

IDA has also stepped up its support to manage disaster risks. The Crisis Response Window was institutionalized in IDA16 to assist low-income countries to enhance their response to disasters and adopt preventive measures to minimize the adverse consequences of future catastrophes. This funding window is a major step forward and provides greater availability and predictability of additional concessional assistance for post-disaster recovery and reconstruction in low-capacity, high-risk countries. In addition to physical investments in resilience, IDA and IBRD will scale up support for innovative and customized financial solutions for both low- and middle-income countries that build fiscal and economic resilience to natural hazards.

Beneficiaries

“I still remember Cyclone Sidr in 2007,” said Hasina Begum, headmistress of Paschim Napitkhali Primary School in Barguna, Bangladesh. “There were warnings, but nothing could really prepare us for what happened. Cyclone Sidr hit my hometown, Barguna with ferocious intensity. Powerful gusts of winds and heavy rainfalls frightened the helpless people, many of whom had left their homes and possessions to seek the protection of cyclone-shelters, like my school.”

The Paschim Napitkhali Primary School, a non-descript two storied building played a life-saving role in 2007, when Barguna and other coastal regions were hit hard by the storm surge of over 5 meters (16 ft). Initially established by Hasina’s father, the school was later rebuilt and converted into a school and cyclone shelter. During the year, the primary school bustles with children – but during cyclones and other natural disasters, the building doubles up as a shelter. In 2007, this cyclone-shelter alone had helped save more than 800 people.