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Overview

Disasters, whether from natural hazards or man-made, cost lives and livelihoods. The immediate spending needed for response and reconstruction is compounded by a weakened economy, damaged infrastructure, destroyed businesses, reduced tax revenues and a rise in poverty levels.

  • According to the latest data from insurer Munich Re, losses from natural catastrophes in 2020 rose to $210 billion globally, from $166 billion in 2019.
  • Of all of deaths from weather, climate, and water hazards, 91% occurred in developing economies, according to the United Nations country classification from 1970 through 2019. The proportion remains similar for the World Bank country classification, according to which 82% of deaths occurred in low and lower-middle-income countries.
  • Since 1980, more than 2.4 million people and over $3.7 trillion have been lost to disasters caused by natural hazards globally, with total damages increasing by more than 800%, from $18 billion a year in the 1980s to $167 billion a year in the last decade.
  • Funded by the Global Facility for Disaster Reduction and Recovery (GFDRR), a World Bank report Shock Waves (2016) states that almost 75% of the losses are attributable to extreme weather events. As climate change threatens to push an additional 100 million people into extreme poverty by 2030, another GFDRR-funded report Unbreakable (2017) shows that natural hazards have had large and long-lasting impacts on poverty.

The poorer a community is, the more vulnerable it is to natural hazards and climate change. Disasters do not have an equal effect on everyone. Children, women and girls, elderly people, persons with disabilities, indigenous peoples, and other marginalized communities — especially in lower-income countries — are often disproportionately affected by disasters.

  • Evidence suggests that women die as a result of disasters at a higher rate than men do in countries where women have a lower socioeconomic status. Meanwhile, individuals with disabilities are often overlooked in disaster recovery planning because they are not identified in household surveys in the first place. In the Caribbean, GFDRR funded an evaluation on gender-responsive disaster preparedness and recovery efforts, and an assessment on disability- inclusive disaster risk management to inform and improve countries’ policies for building resilience.
  • Disasters and conflict are mutually reinforcing. Countries associated with fragility, conflict, and violence — so-called FCV countries — often face heightened risks from disaster because government capacity is weakened; and on the other hand, disaster risks can exacerbate pre-existing tensions, increasing the risk of violence. Layered on top of this vulnerability, are the impacts of climate change.
  • Many of these vulnerable people live in the 74 of the world’s poorest countries – those served by the International Development Association (IDA), the World Bank’s fund for the poorest countries.
  • The costs of disasters are particularly difficult to bear for low- and lower-middle-income countries that tend to depend on ad-hoc solutions, such as emergency loans or the diversion of other limited financial resources. The lack of financial-resilience mechanisms for disasters often delays economic recovery and prolongs hardships for governments, households, businesses, and vulnerable communities.

Countries have made great progress in managing disaster risks, pivoting from only responding after the fact to a stronger focus on prevention and preparing for shocks, enabling a reduction in loss of lives, and mitigating some economic impacts. Below are some country examples where GFDRR’s grant funding and technical assistance made it possible to mobilize larger World Bank investments.

  • Tonga, which was hit by a devastating volcanic eruption and tsunami in January 2022, had disaster risk financing mechanism in place which made it possible for the World Bank to swiftly disburse an initial $8 million, funded through IDA. Emergency Operating Centers, which were built as part of the ongoing resilience building program, were immediately activated in response to the eruption. The Bank’s rapid assessment report (GRADE), which the damage estimation can produce quickly and remotely, also helped to inform appropriate, timely and efficient courses of action to take, and to prioritize resources where most needed.
  • In Mozambique, the city of Beira seized the opportunity to build back better after the devastating Cyclone Idai in 2019. Nature-based solutions, such as an urban green park, are reducing recurrent flooding and making the downtown area more attractive place to live. The country is also rebuilding resilient roads and transport networks. Resilience building projects like these often start with technical assistance provided by multilateral institutions like the World Bank, to identify needs, inform priorities and strategies, and provide advice on possible solutions and trade-offs.
  • Such technical assistance has helped Jamaica access up to $185 million against losses from future cyclones through a catastrophe bond. Haiti, which had multiple risk-financing instruments in place supported by the World Bank and other partners, received a payout of approximately $40 million from the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company within 14 days of a massive earthquake in August 2021.
  • In Romania, the city of Bucharest is taking steps to strengthen schools and other public buildings against seismic risks in an inclusive way that listens and addresses unique needs of vulnerable children and communities. Investing in more resilient infrastructure can provide a net benefit in low- and middle-income countries of $4.2 trillion, with $4 in benefit for each $1 invested, according to GFDRR-funded Lifelines (2019) report. Such investments can improve the quality and resilience of essential services, such as transport, or water and electricity supply, and thereby can contribute to more resilient and prosperous societies.

While we have witnessed substantial progress, improving disaster preparedness at the same time as enabling better disaster prevention and climate adaptation remain as key challenges for sustainable development. The World Bank Group will continue to support countries’ efforts to prioritize adaptation and resilience. Together, with our partners, we will seek tailored and innovative solutions to protect the poorest, enable resilient development and accelerate recovery.

  • The World Bank Group supported 85 countries in FY21 to make disaster risk reduction a priority; and we delivered  $26 billion in climate finance. We also account for over two thirds of all multilateral adaptation finance to developing countries. The world, however, is still quite some way from an estimated $140-300 billion that developing countries may need in 2030 for adaptation action.
  • Mainstreaming disaster risk management into development planning can reverse the current trend of rising disaster impact. Furthermore, when countries rebuild stronger, faster, and more inclusively after disasters, they can reduce the impact on people’s livelihoods and well-being by as much as 31%, potentially cutting global average losses. For example, GFDRR-funded Frontline (2021) report offers recommendations for better preparing health systems to respond to shocks, from seasonal demand surges to pandemics, climate change, and disasters.
  • Recovering from COVID-19 and living in a changing climate provides us a unique opportunity to think collectively about how to rebuild societies better equipped to handle multiple risks, in a green, resilient, and inclusive way where all stakeholders have a voice – both in defining the problem and the solutions.

Last Updated: May 02,2022

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