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Disasters resulting from natural hazards represent an important challenge for Colombia’s fiscal sustainability and stability. Colombia is one of the countries with the highest recurrence rate of disasters caused by natural hazards in Latin America (see the Annex)1. As the country’s population and economy continue to grow, so will the economic losses resulting from such events, an average of 600 disaster events of which is reported per year2. Colombia’s rate of economic growth is increasing the base of assets exposed to disaster risks, which may lead to significant increases in losses, particularly if investments in new assets are not accompanied by plans for mitigating disaster risk. The Government of Colombia (GoC) recognizes the importance of mitigating these events and has taken several steps to mainstream disaster risk management into its policy and programs, as evinced by the National Development Plan ‘2014-2018’, ‘all for a New Country’. The MHCP is committed to developing strategies for reducing its contingent liabilities in relation to disasters and to managing the fiscal risk resulting from these events. This document presents the priority policy objectives that have been established to assess, reduce, and manage fiscal risk due to natural disasters. It also describes the MHCP’s efforts to progress its policy objectives in the long term. These policy objectives represent the MHCP’s ex ante policy framework regarding management of financial and fiscal disaster risk. The MHCP identifies three priority policy objectives in order to strengthen management of the Government’s contingent liabilities and thus support the goal of achieving macroeconomic stability and fiscal balance. The policy objectives are: (i) identification and understanding of fiscal risk due to disasters; (ii) financial management of natural disaster risk, including the implementation of innovative financial instruments; and (iii) catastrophe risk insurance for public assets.

Social protection can help build people’s social and economic resilience against disasters in Myanmar. Regular cash transfers, including public works programs, can help smooth consumption,build and maintain assets, and develop human capital to better cope with natural hazards. Disaster risk management (DRM) systems can be linked to social protection programs to trigger a safetynet response in times of emergencies. Community-driven development (CDD) programs could provide a useful platform for social protection programming to respond to disasters and build long termresilience in Myanmar.

This note aims to build understanding of the existing disaster risk financing and insurance (DRFI) tools in use in Fiji and to identify gaps where potential engagement could further develop financial resilience. In addition the note aims to encourage peer exchange of regional knowledge, specifically by encouraging dialogue on past experiences, lessons learned, optimal use of these financial tools, and the effect they may have on the execution of post-disaster funds. In 2012 alone Fiji experienced three major events with estimated total damage of F$146 million (US$78 million). Fiji is expected to incur, on average over the long term, annual losses of F$158 million (US$85 million) due to earthquakes and tropical cyclones. In the next 50 years Fiji has a 50 percent chance of experiencing a loss exceeding F$1,500 million (US$806 million). The country has a taken a proactive approach to DRFI and developed a finance manual for post-disaster budget execution. The government now has F$3 million (US$1.6 million) available in DRFI instruments to facilitate disaster response and also implemented tax concessions to encourage donations in the wake of tropical cyclone Evan. A number of options to support ongoing DRFI improvements in Fiji are presented for consideration: (a) the finance manual developed by the Ministry of Finance for post-disaster procedures should be finalized, and cabinet approval should be sought; (b) an overarching disaster risk financing and insurance strategy should be developed that includes options for risk transfer; and (c) assets should be identified in order to develop an insurance program for critical public assets.

This study presents options for a national disaster risk financing strategy in Indonesia, drawing heavily on international experience. The study discusses a series of complementary options for a national disaster risk financing strategy, based on a preliminary fiscal risk analysis and a review of the current budget management of natural disasters in Indonesia. It benefits from the international experience of the World Bank, which has assisted several countries in the design and implementation of sovereign catastrophe risk financing strategies. The rehabilitation and reconstruction fund is the main budget instrument for the Government of Indonesia (GoI) to finance public post-disaster expenditures, but it is under-capitalized. This study presents an optimal combination of risk-retention and risk transfer instruments that could help the GoI increase its immediate financial response capacity against natural disasters and better protect its fiscal balance. Building on the three-tier risk layering approach promoted by the World Bank and the preliminary fiscal risk assessment analysis, the following financial strategy could be considered by the GoI. This strategy would provide the GoI with access to immediate liquidity in the aftermath of a disaster at a competitive cost. The strategy would allow the GoI to access up to US$1.8 billion liquidity in the aftermath of a disaster in order to finance immediate post-disaster expenditures, such as grants for livelihood and low income housing reconstruction. Preliminary disaster fiscal risk assessment analysis shows that this would protect the GoI against disasters occurring every 100 years. The implementation of a national disaster risk financing strategy would require significant institutional capacity building.

This report aims to advance the dialogue on creative, forward-looking solutions for developing countries by presenting recent innovations on disaster risk financing and insurance developed by the private markets as well as the international donor community, from the macro (government) level down to the micro (household) level. It discusses how these innovations can be adapted and implemented in developing countries to better protect efficiently those countries against the financial consequences of natural disasters. Section one provides an introduction to the economic and fiscal impacts of natural disasters on developing countries. Section two examines examples of innovation in the private insurance and capital markets that may have applications in sovereign disaster risk financing for developing countries. Section three examines how innovations coming out of mature property catastrophe risk insurance (PCRI) markets could serve in low and middle-income countries. Section four considers how innovation is taking seed in creative disaster micro insurance programs in low- and middle-income countries. Section five wraps up the report with brief concluding remarks.

This paper presents the conceptual framework for a training program on integrating disaster risk reduction and climate-change mitigation into Agriculture and Rural Development Department (ARD) programming. Its target audience consists of World Bank task team leaders and their national counterparts and partners working in agriculture and rural settings.

The provention consortium was created in February 2000 as a formal partnership between the World Bank, other International Financial Institutions (IFIs), bilateral donor organizations, the insurance sector, the academic community, and civil society. Designed as a think-tank to commission research and to disseminate risk reduction tools, the provention secretariat was to rotate from one partner organization to another. Thus, after three years at the Bank, the secretariat was transferred to the International Federation of the Red Cross and Red Crescent Societies (IFRC) in Geneva. The overall goal of provention is to reduce the social, economic, and environmental impacts of natural disasters on vulnerable populations in developing countries in order to alleviate poverty and contribute to sustainable development. This is achieved through (a) forging partnerships; (b) promoting policy; (c) improving practice; and (d) sharing knowledge. Under the Washington-based Secretariat, provention supported four types of activities: applied research studies, pilot and demonstration projects, education and training activities, and workshops and conferences. Provention was repeatedly criticized for its weak governance structure. Therefore, the secretariat commissioned a governance review in 2005. The governance review recommended reactivating the presiding council (PC); replacing the Steering Committee (SC) by a forum to discuss the impact of disasters in developing countries; and creating an Advisory Committee as the main governing body.