Friday, 25 April 2014 01:34
SRI Lanka has become the first country in South Asia to access an innovative form of World Bank financing that provides immediate payouts after a major catastrophe such as a tsunami, cyclone or flood. But it is just the first step in reducing losses during natural disasters.
Approved by the World Bank’s Board of Executive Directors, the $ 102 million Development Policy Loan with a Catastrophe Deferred Drawdown Option (DPL with a CAT DDO) is a line of credit that can be drawn on partially or in full if a country declares a state of emergency after a natural disaster. The facility was approved by the Board along with a $ 110 million Climate Resilience Improvement Project (CRIP), which will finance both short and long term interventions to reduce climate and disaster risk.
The United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA) has stated that natural disasters in Sri Lanka during the past decade have inflicted an economic cost of over Rs. 257 billion or $ 1.95 billion.
Natural hazards need not turn into disasters. Deaths and damage resulting from disasters expose the cumulative implications of human decisions. Prevention is possible and often less costly than disaster relief and response. Disaster risk can be reduced by strengthening resilience: the ability of societies to resist, cope with, and recover from shocks.
By understanding disaster risks and anticipating the potential impacts of natural hazards, disaster and climate risk assessments can help governments, communities, businesses and individuals make informed decisions to manage that risk.
Disaster risk information can inform different development strategies, plans and projects that can in turn reduce risks. This can either be done by avoiding the creation of new risks or by addressing existing risks
Adequate preparedness measures are essential because disaster risk can never be completely eliminated. Preparedness through early warning systems save lives and protect livelihoods and is one of the most cost-effective ways to reduce the impact of disasters.
Financial protection strategies protect governments, businesses and households from the economic burden of disasters. These strategies can include programs to increase the financial capacity of the state to respond to an emergency, whilst protecting the fiscal balance. Ostensibly this is where the World Bank facility will be plugged in.
The challenge of reconstruction also presents an opportunity to promote disaster risk management through integrated resilient recovery and reconstruction planning that will drive longer-term resilient development.
Drought is perhaps Sri Lanka’s biggest worry as it not only destroys crops and livelihoods but drives up energy costs exorbitantly leaving the entire economy and State enterprises exposed. Recent reports have hinted at the Government even being tempted to purchase Iranian crude oil, defying US sanctions, in a move that could be potentially disastrous for the whole country.
Unfortunately, the Budget for 2014 made no structural changes to the CPC, CEB or Water Board to ensure that mismanagement, wastage and corruption is reduced to make the institutions more economically sound. Rampant corruption, environmental degradation, unsustainable policies and stop gap measures all make Sri Lanka particularly vulnerable to dealing with natural disasters.
Disaster management is similar to disaster mitigation; however it implies a whole-of-Government approach to using community resources to fight the effects of an event and assumes the community will be self-sufficient for periods of time until the situation can be stabilised. It can only be hoped that the new facility pushes the Government in the right direction.