Real Risk

[

] 19

they rip apart social support networks and cohesiveness.

Recovering from a disaster, then, requires more than burying

the dead, caring for the injured, and rebuilding structures. It

must also ensure that social structures recover. Families and

communities must be kept together as they also provide the

social capital that allows people to survive physically and

psychologically.

Ignoring local power structures, social groups, and differ-

ences in vulnerability risks makes recovery more difficult by

undercutting the very factors that helped create social cohe-

sion in the first place. It may also leave the poor and other

vulnerable groups even more disadvantaged than they were

before the disaster. For instance in the case of drought recov-

ery, women, if not given agricultural tools along with the men,

are put at an earning disadvantage. It is also important to

consider that disasters often increase the intensity of women’s

work such as care of children, the elderly, and the disabled;

and the provision of water and fuel wood. Maintaining neigh-

borhood groupings when relocation is necessary helps preserve

informal networks which are an important source of support

for women in times of crisis.

There is a critical need for the World Bank and other donors

to involve local communities in long-term planning and recon-

struction. One example of this is the 1993 Argentina Flood

Rehabilitation Project, which involved beneficiaries at all

stages. The interaction between beneficiaries and the local

authorities resulted in the timely availability of construction

materials and the accommodation of local customs in the

architectural design of new houses; this created a sense of

ownership among beneficiaries and increased maintenance.

Thousands of low-income families were able to obtain new

homes by participating in the construction of their own new

housing units. Ultimately, over 11,500 people received

construction-related training, which led to quality of life

improvements. Many individuals who had never worked in

construction have learned enough about a trade to work as a

mason, carpenter, electrician, plumber, plasterer, or painter.

Further, many beneficiaries have seen their social status change

because they now have a numbered address on a real street,

making it easier to fill out job applications and perform confi-

dently at interview.

Better global and market-based financing mechanisms

Managing risk also involves better financial options – to help

spread the risk and provide more stable financing rather than

the mad scramble that seems to occur whenever disaster

strikes. Without contingency financing for disasters, critical

infrastructure may not be reconstructed. Studies have shown

that unless infrastructure is fully reconstructed, long-term GDP

losses are likely to result. Today’s typical response to a disas-

ter is a massive fundraising drive involving public figures, but

often leading to uneven responses. Such donation drives are

a helpful stopgap, but considering that two out of five people

in the world are affected by disaster, and that donor fatigue

can set in very quickly, an internationally supported financ-

ing mechanism is needed. In its continuing absence, the need

for post-disaster liquidity far exceeds the ability to meet that

need, forcing countries to fall back on their own limited

resources. At the moment in most developing countries, costs

not borne by the disaster-affected households are the respon-

sibility of the government, which must divert scarce resources

from long-term development into disaster recovery. Much

disaster assistance is also from person to person or govern-

ment to government. The market plays a limited role.

If we know more disasters are on their way, we need more

stable funding mechanisms with built-in rules for engagement.

Regional and global funding mechanisms are being proposed

and provide another way of reducing individual country costs

and scattered responses.

For example, the Global Facility for Disaster Reduction and

Recovery (GFDRR) is a new initiative intended to support

national capacity building, to deal ex-ante with the risks of

natural disasters in high-risk countries and to enhance speed

and efficiency of international assistance for disaster recovery

operations when disasters occur. Besides improving the deliv-

ery mechanism of recovery assistance through greater

institutional preparedness and coordination, the new global

facility with the participation of the World Bank and other key

global stakeholders of the International Strategy for Disaster

Reduction (ISDR) is proposed to move the focus away from

merely responding to disaster losses through reconstruction,

to mitigation and pre-disaster preparedness activities as a crit-

ical dimension of the global poverty reduction agenda. At the

country level, GFDRR through a multi-donor trust fund will

provide technical assistance for developing national strategies

and plans for risk reduction. Above all, this new programme

will strengthen partnerships among the members of the ISDR

to achieve some of the strategic goals of the Hyogo Framework

for Action.

With such a mechanism, it becomes important to include an

oversight body that can persuade governments to be more proac-

tive. Otherwise, an incentive against investing in risk reduction

in-country could be created. It could also help focus financing

on more long-term solutions. A global financing facility to accel-

erate response and to start mitigating risk is badly needed.

New and innovative insurance mechanisms are now being

developed. For example, in Turkey and the Caribbean, where

a disaster strikes once every two years, such schemes can help

diversify risk internationally through reinsurance and must be

encouraged. Insurance schemes will also put market pressure

on the building industry to meet minimum construction stan-

dards. Turkey was able to sell reinsurance in international

markets of up to USD1 billion. But as risks rise, so will the

cost of insurance. Unless carefully priced, insurance schemes

can create perverse incentives for people to build in harm’s

way – as occurred in New Orleans, stimulated in part by the

availability of government-subsidized flood insurance.

We neglect disaster risk at our peril

The risks associated with disaster will only increase as popu-

lation pressures rise, unless we change the way disaster risk is

brought into development thinking in an integral manner.

Climate change will, in all likelihood, bring with it additional

changes and new risks. As sea temperatures rise, the risks of

cyclones will increase. As sea levels rise, more coastal areas

will be affected, and as weather patterns change, droughts and

floods will increase in number and will affect new areas. These

are not one-off events – they are among the risks that inter-

national organizations must help countries to deal with in the

context of their development plans. If we do not adapt our

approaches to ameliorate these growing risks we will only

ensure two things: donor fatigue, and that the poorest citizens

in the developing world will be subject to the ravages of natural

disaster for decades to come.