May 2, 2006—The international community routinely contributes billions of dollars for relief and rehabilitation following natural disasters. Yet that spending would be more cost-effective and save lives and assets if it focused instead on risk mitigation, reducing the impact of future disasters.
Development practitioners, academics, and civil society members discussed a wide range of approaches that would emphasize such preventive strategies at an April 21 conference on “Effectiveness of Assistance for Natural Disasters” at the Bank.
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| Ali Babacan, Turkey's Minister of Economy |
Vinod Thomas, Director-General of the Bank’s Independent Evaluation Group (IEG), introduced Keynote speaker Ali Babacan, Turkey's Minister of Economy and Chief Negotiator for Turkey’s EU Accession, as a “distinguished politician and economist who is uniquely qualified to discuss the economic and financial impact of natural disasters.”
Minister Babacan launched the event by highlighting the increasing trend in economic and social loss created by natural hazards, and noted that "preventing the losses from natural hazards and managing the risks stemming from them is a main challenge for the development agenda." In Turkey, he said, 1999 was a turning point. "The Marmara earthquake awakened us and forced us to implement bold and forward looking actions." In consequence, he said, Turkey has increasingly invested in preventive actions that are expected to help reduce the effects of the next major earthquake.
Following the keynote address, a panel of government, civil society, and academic specialists discussed Hazards of Nature, Risks to Development, an evaluation by the IEG of the past two decades of World Bank assistance for natural disasters.
Ronald Parker, who led the IEG evaluation team, reported that of the 528 Bank projects for natural disasters, only 21 were entirely devoted to prevention. The number of natural disasters, lives lost, and Bank lending has risen rapidly in the past two decades. Most notably, natural disasters to which the Bank responded occurred repeatedly in high-risk areas. Hence, risk management could yield high returns.
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Vinay Ariyaratne (Sarvodaya, Sri Lanka), David Peppiatt (Provention Consortium), Marilou Uy (Panel Chair), Barbara Carby (Jamaica), Ron Parker (IEG), Fred Krimgold
(Virginia Tech) |
Bank projects related to natural disasters had higher rankings for outcomes and sustainability than the overall average for Bank projects. However, the Bank tended to lend repeatedly to disaster-prone countries rather than reduce risks. Projects rarely addressed the root causes of disaster. Country Assistance Strategies (CASs) typically failed to mention natural hazards or risk management: 31 percent of them failed to do so even in countries that had received 8 or more disaster-related loans.
“Nature creates hazards, but human actions create natural disasters,” said Minister Babacan. If countries focused on risk mitigation, hurricanes, floods, and earthquakes need not become disasters. In Grenada, a hurricane caused damage equal to about 200 percent of GDP, while in nearby Bermuda, where buildings had been built using disaster-resilient construction, a Category 5 hurricane caused no significant damage. Fred Krimgold of the Virginia Technical University and a renowned expert on disasters offered a familiar model for disaster preparedness: a fire department, he said, typically spends 5 percent of its time in fighting fires and 95 percent in training and prevention.
Some participants pointed out that risk management was neglected because of inadequate or perverse incentives. Studies showed that $1 spent on prevention could save $40 of damage, yet countries were reluctant to invest more in risk management when it might divert funds from other development needs. Many countries saw risk mitigation as a cost rather than a benefit, in part because its effects are invisible: "If risk mitigation succeeds, nothing happens," remarked David Peppiatt of the ProVention Consortium. Barbara Carby, Director General of Jamaica's Office of Disaster Preparedness and Emergency Management, said that the terms and conditions of risk management loans could be made softer to encourage borrower interest, and called for more hard research to demonstrate the benefits of prevention.
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| Vinod Thomas welcomes Barbara Carby, Director General of Jamaica's Office of Disaster Preparedness and Emergency Management |
Participants from countries that had been hit by disasters said that community consultation and participation greatly improved outcomes. Communities rendered yeoman service after the tsunami in Sri Lanka, according to Vinya Ariyaratne, Head of Sarvodaya, a civil society organization. In Turkey, local governments had been given powers and training for disaster mitigation, and this had helped make it more effective.
Country Directors from the Caribbean, Sri Lanka, Indonesia, and Pakistan drew lessons from their hands-on experience in recent major disasters. Participants were struck by the study finding that Country Assistance Strategies of the Bank so rarely emphasized disaster prevention, even in countries repeatedly affected by disasters. They agreed that greater attention to the issue in CASs would help concentrate attention on preventive measures.
In Caribbean countries, which suffer an average of one natural disaster every two years, "Catastrophe insurance pooling was a logical way to reduce risk by different areas in a country, or different countries in a disaster-prone region," said Caroline Anstey, Country Director for the Caribbean.
Andrew Steer, Country Director for Indonesia, and Peter Harrold, Country Director for Sri Lanka, pointed out that some disasters are so huge or so unexpected that countries cannot realistically be expected to plan for their mitigation, and therefore the Bank must have a much better capacity to respond to disasters than currently exists.
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| Country Director Panel: Andrew Steer, Peter Harrold, Ajay Chhibber (panel Chair), Caroline Anstey, John Wall |
John Wall, Country Director for Pakistan, said that one good institutional mechanism to help improve the effectiveness of response would be a self-starting information system that could guide governments and donors to persons and institutions with special expertise. In the Kashmir earthquake, he said, he would have welcomed satellite imagery that could help identify damaged areas.
The consensus of the conference was that countries should institutionalize preventive strategies. Risk management should be mainstreamed into overall development policy, the way environment had been mainstreamed over the past 15 years. Ajay Chhibber, Director of IEG, said “we need a change in our mind-set to integrate risk and development and improve responses with a range of mechanisms from community involvement to global and regional financing facilities.”
The full IEG evaluation report
Information on the Bank's Hazard Risk Management
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