Photo credit: Wikipedia PAKISTAN Physical and Fiscal Disaster Risk Assessment in OVERVIEW: Pakistan’s natural catastrophes raise a major financing challenge: the losses from flooding alone cost 3–4 percent of the federal budget, with losses from natural disasters exceeding $18 billion over the past decade. A grant from the Global Facility for Disaster Reduction and Recovery (GFDRR) has begun to change the way the government of Pakistan (GoP) addresses disaster risk. One activity under the grant—a World Bank-implemented fiscal disaster risk assessment (FDRA)—enabled federal and provincial finance authorities to better understand the fiscal challenge and act proactively to reduce risk. Other activities have built technical agencies’ capacity to undertake multi- hazard risk assessments (MHRAs). Together, these activities led the World Bank and the GoP to invest a combined $245 million toward risk mitigation, and the public sector has improved its capacity to replicate the risk assessments. RESULTS & ACHIEVEMENTS • GFDRR support leveraged $225 million from the World Bank—with the GoP providing an additional $20 million—through two major risk mitigation programs which will address flood and drought risks and build capacities of institutions mandated with disaster risk management responsibilities at the provincial level. • The government established a National Working Group for Risk Assessment and subnational groups to increase coordination among technical agencies and stakeholders and to streamline risk assessment activities. The participation of multiple technical agencies working together is adding value, will encourage data-sharing, and provide an important foundation in Pakistan’s CONTEXT future DRM activities. The Working Group also makes the risk assessment a collaborative Pakistan’s high exposure to many types of natural exercise being led by the Government rather disasters—floods, earthquakes, droughts, cyclones, than being done by an outside consultant. and tsunamis—makes it the sixth most climate- change-affected country in the world. In the • The GFDRR grant also helped the government’s aftermath of enormous natural calamities over National Disaster Management Authority recent years such as the 2005 Kashmir earthquake (NDMA) to develop and operationalize the and the widespread 2010 and 2014 floods, the National Data Sharing Platform for Disaster Risk government has made significant efforts to improve Information to promote data-driven disaster risk its regulatory and institutional environment for management (DRM) decision making. This web- disaster management. based collaborative tool allows for collection of risk information at a central repository and However, Pakistan’s disaster management enables stakeholder to view the data generated agencies have been obstructed by weak capacities, as a result of risk assessments. limited resource allocations, inadequate technical expertise, and weak partnerships with key decision • The grant established effective methodology makers such as budgeting and finance institutions. for undertaking Multi Hazard Vulnerability Risk Assessment (MHVRAs), enabling the scaling up of risk assessments to different parts of the country. LESSONS LEARNED Without actionable information, capacity, and high-level support fiscal and physical disaster risk assessments cannot translate into policy actions. Activities under the Bridge construction across the Indus River. Photo credit: © Pulpitis GFDRR grant improved coordination between different agencies and other stakeholders, and also raised APPROACH awareness about the importance of risk modeling and the need to The GFDRR grant supported the following: incorporate risk into development • Creation of the National Data Sharing Platform planning. This is demonstrated through for Disaster Risk Information, enabling the creation of a dedicated unit within government agencies to share information for NDMA to undertake risk assessments planning and decision making while providing across the country. stakeholder access to previous risk assessments; a consolidated, standardized repository for There is no complete picture on fresh information; and data that support a the cost of natural disasters to the comprehensive risk financing approach. government exchequer, as disaster • Completion of the FDRA, which used historical losses are calculated by different loss data and catastrophe risk modeling to line departments without a uniform quantify the fiscal impacts of natural disasters. methodology. During the assessment, It also supported dialogues with the insurance the government began to realize that market regulator and the private sector about strengthening risk financing products and it (a) lacks aggregate data on the fiscal developing more innovative financial solutions. losses caused by natural disasters, and • Formation of a National Working Group for (b) needs to analyze these losses and Risk Assessment and subnational groups, their impact on development. which enable technical agencies to contribute information to, and use outputs from, the risk assessments. The agencies also received technical trainings on risk assessment. Karakorum highway. Photo credit: © paweł opaska NEXT STEPS The Disaster and Climate Resilience Project and bonds, and disaster management funds. Other the Sindh Resilience Project are strengthening donors have used the FDRA to advance dialogues governments’ capacity to manage disasters, with the Ministry of Finance toward establishing a undertake recovery planning, improve physical National Disaster Management Fund. preparedness, and mitigate fiscal impacts. Government agencies also have assimilated The World Bank is helping both federal and technical consultants engaged under the grant provincial governments to identify post-disaster within a regular MHVRA unit to undertake financing instruments such as reserve funds; further assessments and oversight of MHVRA emergency cash transfer systems; and market- interventions. based options such as insurance, catastrophe