A global review of disaster reduction initiatives - Welcome to the ...

5Living with Risk: A global review of disaster reduction initiativesThe World Bank and disaster reductionThe World Bank and borrowers today aredeveloping a greater awareness of the need tomitigate or reduce the adverse effects of naturaldisasters before they strike (see more chaptersix). A review of the Bank’s disaster-relatedprojects since 1980 recognised that in most ofthe projects, the full loan amount is not dedicatedto mitigation and prevention measures,but rather includes one or more componentsdedicated to these objectives. Four countriesalone – Bangladesh, Brazil, China and India –accounted for 40 per cent of the mitigationportfolio. Moreover, it is a concern that half ofthe top client countries for reconstruction projectsdo not appear among the main borrowersfor these mitigation projects. There is scope forgreater bank mitigation assistance to thesecountries that may help reduce demand forreconstruction. There is a trend of increasedbank approval of mitigation projects over time,with 55 approved in the 1990s against only 40in the 1980s.The bank is reviewing its operational policiesto respond, among other things, to the conclusionsof its review of disaster-related projectssince 1980 and to incorporate more considerationson disaster and vulnerability reductionactivities in its lending operations.The World Bank is supporting projects inHonduras and Nicaragua with more than US$14 million committed to each country toimprove municipal capabilities in risk management.Activities will focus on improving landuseand planning procedures based on hazardanalysis and strengthening national risk anddisaster management systems. The schemeworks through umbrella municipal organizations,national disaster organizations and scientificand technical institutions such as theNicaraguan Institute of Territorial Studies(INETER). The World Bank is developinganother programme with the Organization ofEastern Caribbean States (OECS) that will offerrisk reduction loans to five countries to supportcapacity building, institutional strengthening,community preparedness and greater protectionfor key infrastructure.Financial instruments addressing disasterrisk reductionRisk-sharing and risk transfer at national(macro), community (meso), and household(micro) levels cut down losses, improveresilience, and contribute to expeditious recovery.The efficiency of risk-sharing and risktransfer, however, depends upon the size of therisk pool and availability of financial instrumentsand services. In developed countries,governments, corporate entities and individualsengage in risk-sharing, which increases thesize of risk pool, thus improving insurability ofproperties and assets, whereas in developingcountries, the size of the risk pool is smaller,resulting into inadequate insurance coverageand pay off. A related requirement is the commercialapplication of specific instruments andservices for risk-sharing at different levels.Insurance, microfinance and public works programmesare examples of financial instrumentsand programs that can potentially be used forInsurance in the CaribbeanUnited Insurance Company Limited, providesinsurance services to several islands inthe region, and offers 25 per cent discounton premiums for clients who have hazardresistant structures. They have also publishedtwo handbooks entitled ProfessionalGuide to Performance-Based Design Upgradefor the purpose of Achieving Hurricane-ResistantConstruction and Guide to Making YourHome Hurricane Resistant and have promotedtheir use to design professionals andhouseholders.Working Party on Insurance and Reinsurance:Whilst not an institution, this working partywas developed as a CARICOM initiative.It seeks to minimise the overall economiccosts and social effects of natural hazards inthe CARICOM countries based on anincreased emphasis on vulnerability reductionand a strengthened insurance industry– including increased self-insurance.256