Proceedings from the 2015 URf Conference Pr oceedings f r om t he 2015 UR f Conf er ence This publication is made up of a series of submissions from session leaders of the Understanding Risk and Finance. These submission were compiled by the Global Facility for Disaster Reduction and Recovery (GFDRR). The content and findings of this publication do not reflect the view of GFDRR and the World Bank Group. The World Bank does not guarantee the accuracy of the data in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The sole responsibility of this publication lies with the authors. The European Union is not responsible for any use that may be made of the information contained therein. Washington, D.C., June 2016 Editors: LFP Editorial Enterprises Designed by Miki Fernández (miki@ultradesigns.com), Washington, D.C. ©2016 by the International Bank for Reconstruction and Development/The World Bank 1818 H Street, N.W.. Washington, D.C. 20433 U.S.A. All rights reserved African Nati te and Disaster Risks s i lience of ons an o C lima Re d Com nities t Building Fina ncial mu i Contents iii Foreword v Acknowledgments vii Abbreviations viii Overview of URf Proceedings from the Conference 1 Innovations in Risk Mapping 5 Urban Resilience in Africa: Perspectives from Experts and City Officials 9 What Risks? A Sample Set of Risk Assessments from across Africa and How to Use Them 13 Crisis Complexity: Partnering to Improve Resilience in the Face of Rising Humanitarian Needs 17 The Power of Insurance: Driving Financial Resilience for Governments and People 21 Governments in the Lead on Financial Preparedness: Lessons from around the World 25 Scaling Up Social Safety Nets in Response to Disasters: The Critical Role of National Programs 29 After Ebola: The Future of Pandemic Risk Management 33 Rethinking Risk Management Approaches and Practices in Africa 37 Building Resilience through Risk Financing: Cross-Sharing Experiences with Island States and Other Countries 41 Protecting Development Gains: The Power of Risk Pooling and the G7’s InsuResilience Initiative ii Foreword T he Understanding Risk and Finance Conference (URf), held on November 17–20, 2015, at the African Union in Addis Ababa, Ethiopia, convened 450 disaster risk management experts and practitioners to discuss and share knowledge on how to mitigate the socioeconomic, fiscal, financial, and physical impacts of disasters in African nations. Organized by the African Union (AU), the European Union (EU), the government of Ethiopia, the World Bank, and the Global Facility for Disaster Reduction and Recovery (GFDRR)—and in collaboration with a number of regional and international institutions—URf was part of the Building Disaster Resilience in Sub–Saharan Africa program, which is an initiative of the African, Caribbean, and Pacific Group of States that is financed by the EU and implemented by the AU, the United Nations Office for Disaster Risk Reduction, the African Development Bank, and GFDRR with the World Bank. During the four-day event, African policymakers met with members of the private sector, the multilateral community, nongovernmental organizations (NGOs), and academic institutions to discuss the myriad of risks the continent faces, as well as to outline key lessons learned to overcome these challenges. Attendees were encouraged to address risks holistically, as the continent is highly vulnerable to droughts, floods, climate change, forced displacement, political instability, chronic poverty, conflicts, and pandemics. The following were among the topics and concerns they raised: The potential impacts of El Niño in the region. While some countries, such as Ethiopia, have efficient safety nets in place to absorb some of the shocks of weather events resulting from El Niño, preparation activities in others are not as advanced. A call was made by international and local actors to come together to intensify preparations for addressing the impacts of this weather system at the country level. The need for continued investment in early warning and risk identification systems and for the sharing of knowledge across institutions. Participants examined risk identification and preparedness capabilities with reference both to natural hazards and pandemics, with many discussions taking place on the challenges of the Ebola epidemic. Particularly instructive was the experience of Sierra Leone, which managed to end the outbreak in November 2015—the same month as the conference. The challenges associated with assessing risk in data-poor environments and communicating risk information. The availability of adequate data is essential to disaster risk assessment, which, along with effective communication of assessment findings, is, in turn, essential to disaster preparedness, risk reduction, financial protection, and resilient reconstruction. The growing awareness across Africa of the need for effective risk financing and management solutions to contribute to long-term resilience building. The general consensus among participants was that, by applying basic principles of financial planning and public financial management, countries can become more financially resilient to disasters and climate shocks. iii Financial preparedness at both the country and individual levels. Participants saw catastrophe risk pools as useful in helping countries improve access to and lower the cost of sovereign insurance, which can empower governments to ensure a rapid response by providing liquidity immediately after a disaster. Scalable social safety nets have promise as a means of disseminating targeted payouts to vulnerable households at the onset of a shock. The importance of urban resilience as African cities rapidly expand. There was an agreement that building resilience requires reducing vulnerability, building capacity, and improving urban planning. As cities move from the diagnosis of problems to the implementation of solutions, they will need strong leadership and coordination across all levels of government, as well as access to public and private resources. The need for better coordination and partnership among actors and stakeholders in the field of disaster risk identification and financing. Participants saw the role of public–private partnerships as critical. This was particularly so in the case of index-based insurance, where, some argued, a multi-stakeholder approach to investments in data and technology is key to ensuring the sustainability of initiatives that can help build individuals’ resilience to disasters. The concept of thinking locally and acting globally. Participants saw that forming partnerships with local communities and understanding their preoccupations, vulnerabilities, and factors that affect their resilience is a key step in mitigating disaster risk and ensuring financial resilience. Government-to-government and regional coordination was also stressed. During the conference, the power of social media to spread messages was evident, with over 950 tweets going out containing the hashtag #URfAfrica. In addition, a youth event brought in young leaders from the region to speak to students in person and to more online through a Google+ chat. The event demonstrated the potential for matching the power of physically convening with the power to reach multiple audiences (including youth) and to influence online discussions globally. The proceedings presented here seek to convey some of the dialogues that took place during URf by providing summaries that build on the themes listed above. URf marked the beginning of new partnerships and innovative advances in disaster risk assessment and financing in Sub-Saharan Africa. We look forward to continuing to work on these advances, and to collectively build resilience against the socioeconomic, fiscal, and physical impacts of disasters on the continent. Amb. Gary Quince Mrs. Tumussime Rhoda Peace Mr. Ede Jorge Ijjasz-Vasquez Head of European Union Commissioner for Rural Economy Senior Director Delegation to the African Union & Agriculture Social, Urban, Rural & Resilience European Union African Union Commission The World Bank iviv Acknowledgements T o all of those who participated in, attended, and contributed to the Understanding Risk and Finance Conference (URf), we cannot thank you enough! Your effort, energy, and presence were essential to its success. While we cannot mention all the institutions and individuals who contributed to the planning and execution of the event, we would like to highlight some key partners. First, we would like to thank our organizing partners: the African Union (AU), the European Union (EU), and the Government of Ethiopia. The conference was organized with financial support from the EU in the framework of the African, Caribbean, and Pacific (ACP)–EU Africa Disaster Risk Financing Initiative, managed by the Global Facility for Disaster Reduction and Recovery (GFDRR). We would also like to give a special thank-you to all the organizations that led the policy, technical, and training sessions, including 5x15, the Addis Ababa University/Africa Center for Disaster Risk Management, Africa Risk Capacity, Ambiental, Circumspecte, the Ethiopian Red Cross, the European Union, the Global Earthquake Model Foundation, the Indian Ocean Commission, the Red Cross Red Crescent Climate Center, the Regional Centre for Mapping of Resources for Development, Swiss Re, the United Nations Children’s Fund, the United Nations Development Program, the United Nations Human Settlement Programme, the United Nations Office for Disaster Risk Reduction, the United Nations Office for Project Services, the United Nations Office for the Coordination of Humanitarian Affairs, and the World Food Programme. A big thank-you goes as well to all the opening, closing, and keynote speakers: H.E. Tumusiime Rhoda Peace, Margareta Wahlström, Khalifa Sall, Ronald Mangani, Ambassador Brigitte Collet, Ede Jorje Ijjasz-Vasquez, H.E. Ahmed Shide, Stefan Dercon, Chris Lane, Mohamed Beavogui, H.E. Mitiku Kassa, Francis Ghesquiere, Anna Burylo, H.E. Diriba Kuma, Colin Bruce, Mukesh Kapila, Musa Ecweru, Anne Juepner, Sunkarie Kamara, Mahboub Maalim, Florian Neutze, Alasan Senghore, Esther Baur, Henry Kerali, Gbeme Horace Kollie, Mads Oyen, OB Sisay, Ger Duany, Jason Braganza, Raouf Mazou, Deidre O’Sullivan-Winks, Antoine Ruvebana, Dennis Weller, Sharon Rusu, Dampha Almami, and Samuel Munzele Maimbo. We would also like to acknowledge the following members of the World Bank Group who put time and effort into organizing the conference, the technical sessions and who contributed to this publication: Simeon Abel, Edward Anderson, Yewondwossen Assefa, Simone Balog. Daniel Clarke, Sergio de Cosmo, Samantha Cook, Vivien Deparday, Stuart Fraser, Tayler Friar, Mark Iliffe, Brenden Jongman, Muluneh Lechebo, Felix Lung, Barry Maher, Henriette Mampuya, Jean-Baptiste Migraine, Veronique Morin, Francis Muraya, Francis Nkoka, Richard Poulter, Keiko Saito, Benedikt Signer, Susann Tischendorf and Asmita Tiwari. We would also like to thank the following individuals who were key partners of URF and ensured the success of the event: Cristina Vicente Ruiz, Leah Wanamba, Dampha Almami, Abiy Hailu, Aynalem Bayle, Metasebia Luigi, and Surafel Meressa. Finally, a special thanks to the URF core team who developed the content and format of the conference and organized the event. This includes: Amal Ali, Elizabeth Alonso-Hallifax, Bianca Adam, Alemseged Bedane, Chalida Chararnsuk, Julie Dana, Rossella Della Monica, Emma Phillips, Christoph Pusch, Alanna Simpson and Prashant Singh. vv vi Abbreviations ARC African Risk Capacity CCRIF Caribbean Catastrophe Risk Insurance Facility DRM Disaster Risk Management GEM Global Earthquake Model GFDRR Global Facility for Disaster Reduction and Recovery HSNP Hunger Safety Net Programme IGAD Intergovernmental Authority on Development IOC Indian Ocean Commission NUSAF Northern Uganda Social Action Fund PCRAFI Pacific Catastrophe Risk Assessment and Financing Initiative SIDS Small Island Developing State SWIO-RAFI South West Indian Ocean Risk Assessment and Financing Initiative UNHCR United Nations High Commissioner for Refugees UNISDR United Nations Office for Disaster Risk Reduction Facing page: Helina, (center), 25, is overseeing the construction of three apartment buildings in Addis Ababa, Ethiopia. Women working in construction used to be a rare sight in Addis but because of a construction boom, more women are wearing hard hats. World Bank research shows that sectors that are traditionally male-dominated provide an opportunity for women to earn higher returns. Photo: © Stephan Gladieu / World Bank vii vii Overview of URf Days in Addis Ababa 450 Participants 74 Countries Represented 24 Partners 95 Speakers 65% from the region 33% women 72 Government Representatives viii Partners A Specialized Agency of the African Union www.understandrisk.org/URfinance #URfAfrica ixix x Innovations in Risk Mapping Mark Iliffe, Geospatial Innovation Specialist, World Bank Group Edward Anderson, Senior ICT Specialist, World Bank Group R isk models and policy public can also be used internally also lies in engaging communities. decisions are only as good to improve access to data within In Uganda’s neighbor Tanzania, as the data on which these governments. the primary city Dar es Salaam, they are based. Recent years with a population of around five have seen a revolution in the Bernard Muhwezi, head of million people, is one of Africa’s geospatial and mapping sector, geo-information services at the fastest growing cities. The rapid providing powerful and affordable Uganda Bureau of Statistics, pace of change and urbanization technology that is increasingly is putting these concepts into places a strain on the resources being adopted throughout Africa. practice in the area of disaster of the city’s municipal councils, the The users of this technology risk mapping by unifying data consequences of which manifest come from a broad spectrum, sources from various agencies and as periodic flooding and other engendering collaboration among placing them into an open source– pressures on transportation companies, governments, and civil driven spatial data infrastructure, and access to public services. In society toward resolving key data using the GeoNode application response to these pressures, gaps in support of improvements and platform through http:// the Dar es Salaam City Council in policy, response, and resilience maps.data.ug. GeoNode helps is collaborating with a variety of activities. identify and provide insights into organizations in academia and civil areas prone to hazards. The data society, as well as the Red Cross Innovating data access and the technology to release and the World Bank Group, to them openly drive evidence- survey the flood-prone areas of Many countries across Sub- based disaster scenarios, the the city through a project called Saharan Africa face the challenge understanding of which aids in Ramani Huria. of accessing accurate and up-to- the provision of information badly date official data and sharing them needed by planners, managers, Ramani Huria brings together within their governments. Some researchers, implementers, and university students and local are addressing this challenge, funders to make better decisions community residents to conduct in part, by adopting open data in disaster prevention and surveys of neighbors in flood- policies through programs response. prone areas (figure 1). The such as the Open Government surveys collect “hyper-local” Partnership,1 which provide policy Leveraging community information, such as drainage frameworks for public access to participation capacity, numbers of businesses, data. The technical platforms that construction of buildings, water allow the release of data to the The challenge of making data points, and other exposure layers. accessible will not be resolved just So far, Ramani Huria has mapped through the creation of technical 1 http://www.opengovpartnership.org/ around 1.3 million residents of platforms, such as Geonode; it country/tanzania. flood-prone communities, 1 Figure 1. Community mappers in Dar es Salaam, mapping a drain The view from the skies New technology, such as drones and remote sensing imagery, is providing more information for risk modeling and mapping than ever before, and its potential continues to increase, as the urbanization of Addis Ababa (shown in figures 4 and 5) illustrates. Although the current state of technology in earth observation allows for a maximum the change in which is charted Figure 2. Mabibo Ward, Dar es Salaam, before mapping in figures 2 and 3. An added benefit is that its mapping activities have strengthened the relationship between municipal officials and the community, which is important with regard to disaster management and can be furthered by the use of community-driven tools, such as Ushahidi, a software platform for mapping crises. Yet another benefit of Ramani Huria is that the data generated are openly available on OpenStreetMap.org2 Figure 3. Mabibo Ward after mapping and can be reused for purposes other than flood resilience activities, such as identifying water points within urban slums or the transportation network or offering a base map that can be used by private companies as well as government. 2 OpenStreetMap is a map database of the world from which anyone can download and use data. 2 Figure 4. Urbanization of Addis Ababa, 2010 as is demonstrated by figure 6, which shows a launch to survey Tandale, Dar es Salaam. The use of drones at times meets resistance, however, because they are known for their military applications. This is beginning to be resolved as drones demonstrate their capability for mapping and resilience activities—a start toward breaking down the negative preconceptions about them, says David Rovira: “The term ‘drone’ has to become accepted as something other than militaristic. Now we have drones for good.” Figure 5. Urbanization of Addis Ababa, 2015 With their potential to avoid issues such as cloud cover and the ability to strictly define dates of capture, the use of drones helps change the process of collecting high-resolution temporal imagery. Drones are becoming increasingly simple and easy to operate, using a field-based mobile planning system, such as a tablet. Their outputs include orthophotos, three-dimensional point clouds, and digital elevation models, all of which are useful for identifying flood-prone areas and can aid local government officials and town one-month time window for they are happening, or to identify planners in flood prevention. capturing images of the entire potential improvements for planet from satellites, within the agriculture. These capacities will Through the building and support next few years the advance to provide timely data for decision of local communities of practice daily global coverage will provide makers at points of need. for the use of drones, they can be an annual span of images that will deployed rapidly during floods and enable the detection of change While satellite imagery can other hazard events to provide as roads and houses are built. provide coverage of large areas, quick assessments and direct Datasets across multiple time drones can provide very high- resources, which would have periods will allow users to detect resolution imagery of small areas been helpful during the 2015 change by, for example, observing and can be launched relatively earthquake in Nepal or the 2014 urban sprawl and development as quickly in low-tech environments, floods in Dar es Salaam. Building 3 Figure 6. A municipal officer using drones in Tanzania to identify flood-prone areas communities of practice also This need poses the question of Contributors to the Session begins to predispose policymakers how governments will develop Julie Arrighi, Resilience Advisor, to develop policies for drones policies for the harmonization Africa, American Red Cross in a positive, inclusive manner, of new data sources. How, for John Ahlrichs, Vice President, Planet while offering an opportunity to instance, will volunteer-generated Labs/Blackbridge harmonize the drones’ outputs data, such as OpenStreetMap, or Aboud Jume, Environment Scientist, with existing satellite-derived daily releases of satellite imagery Government of Zanzibar information. complement or replace official Juliana Letara, Municipal Town datasets? Policy frameworks are Planner, Tanzania Defining the Next needed to allow collaboration and Angela Oduor Lungati, Director of Challenges innovation for the use of these Community Engagement, Ushahidi new approaches at larger scales The challenges now faced in risk Bernard Justus Muhwezi, Head of than the city of Dar es Salaam GIS, Uganda Bureau of Statistics, mapping involve, in part, the provides, and across countries and Uganda expansion of existing approaches. continents. David Rovira, SenseFly Currently, we are moving from sparse data environments to Douglas Ssebaggala, Fruits of In conclusion, the innovations of ones where data are available Thought drones, open data, and community through community participation, participation offer a bright future the provision of daily satellite for risk mapping. The new avenues imagery, or the release of open for exploring the potential of data. Pioneering approaches are how cities change daily provide needed to the release of such new tools to decision makers, data and to the development businesses, and communities of new standards to facilitate for managing disaster risk and sharing them. responding to disasters. 4 Urban Resilience in Africa: Perspectives from Experts and City Officials Véronique Marie Morin, Senior Disaster Risk Management Specialist, World Bank Group Asmita Tiwari, Disaster Risk Management Specialist, World Bank Group C ities across Africa are Conference in Addis Ababa, vulnerable to shocks such Ethiopia, held a session entitled as floods, cyclones, and “Urban Resilience in Africa.” The epidemics, as well as manmade participants included several threats and stresses, including mayors and city experts from climate change, economic within and outside the Africa transformation, and rapid region, and the aim was to discuss urbanization. “Urban resilience” the concept of resilience and describes the capacity of its challenges and opportunities cities to function, survive, and with respect to African cities and thrive no matter what shocks to share practical experiences or stresses they encounter. on approaches being taken at Simply put, a resilient city can the city level to strengthen adapt to changing conditions it. Moderated by Dr. Ibidun and withstand shocks while still Adelekan, senior lecturer at providing essential services to Ibadan University of Nigeria, the fastest urbanizing continent in the its residents and continuing to session drew an overwhelming world. With an average growth of move toward its long-term goals. response from a large audience, 3.4 percent, its urban population Recognizing the potential of such who not only engaged in lively is projected to reach 1.2 billion by shocks and stresses to bring discussions but also raised many 2050. This means 60 percent of cities to a halt and reverse years questions regarding the meaning all Africans will be living in cities, of socioeconomic development of resilience for African cities and up from 40 percent in 2010.3 gains, organizations such as the how it can be achieved. World Bank and UN-Habitat are Such rapid rates of growth are developing new methods and Challenges and commonly accompanied by food analytical tools that allow for opportunities for and water shortages, inadequate systemic and evidence-based building resilience in housing and infrastructure, and understanding of urban risks and African cities other problems. Increasingly, planning for resilience. 3 Rapidly urbanizing environments UN-Habitat, State of the World’s Cities 2010/11—Cities for All: Bridging the On November 17, 2015, the in Africa present both challenges Urban Divide (London and Sterling, VA: Understanding Risk & Finance and opportunities. Africa is the Earthscan, 2010). 5 urban dwellers in Africa are living in Accra, Ghana, in June 2015 term horizons and, critically, to in informal settlements situated highlight one such case. People understand their interconnection. in areas of high hazard exposure, had taken shelter from heavy rain A small city with a population often without access to basic and flooding at a petrol station, just over 55,000, Chókwè is physical and social services and where a generator turned on to extremely vulnerable to flood and subject to eviction. In such restore power produced a spark cyclone hazards; large portions conditions, urbanization can act as that ignited leaking gas. The death of the town were completely a driver of risk for disasters. toll from the resulting fires was inundated by floods in 2013. approximately eight times the Through use of UN-Habitat’s With such a large proportion of number of casualties from the profiling tool, Chókwè developed a the urban environment yet to flooding event itself. City Resilience Action Plan, which be built, however, African cities helped empower local authorities also present an unparalleled The drivers of urban risk emerge and raise public awareness and opportunity to avoid past from a complex interaction enhanced the participation of mistakes and embed resilience of local, regional, and global urban residents in decision making in policies and planning. If pressures, such as climate change, to address the identified risks. authorities plan, develop, and which often extend beyond the maintain adequate social and administrative bounds of a given In Addis Ababa, the World Bank physical infrastructure within the city. Urban systems therefore piloted its CityStrength Diagnostic parameters of appropriate land demand special focus within a Tool to identify priorities for investment and appropriate areas for action to improve With such a large proportion of the urban environment urban resilience. Addis Ababa has yet to be built, however, African cities also present an unparalleled opportunity to avoid past mistakes and a population of over 3.3 million embed resilience in policies and planning. and is one of the fastest growing urban economies in Africa, but it is afflicted by high unemployment use planning systems, urbanization new framework that works in an and poverty, struggles to can actually militate against risk. integrated manner. deliver basic services to a large proportion of its population, and The interdependence of urban Understanding risks risks requires an integrated frequently faces floods, fires, and identifying priority approach to their mitigation. and water scarcity. Throughout actions—A first step Urban areas are complex, the process of developing its with highly interdependent Diagnostic tools that support a action plan, engagement in open systems. Failing systems can cross-sectoral, multi-stakeholder dialogue with specialists and lead to cascading impacts that approach provide a first step in key urban stakeholders about can disrupt the availability of enabling cities to identify and risks, urban growth, delivery of clean water, electricity, and tackle existing risks efficiently and basic services, and vulnerable communications. Combined unlock opportunities. In Chókwè, groups improved decision makers’ with the high concentration of Mozambique, city officials piloted understanding of the city’s populations and investments at UN-Habitat’s City Resilience challenges and opportunities and risk, such cascading events can Profiling Tool, designed to enable led to the identification of specific, quickly become catastrophic. The local governments to identify actionable projects to enhance floods and subsequent petrol multiple risks facing their cities resilience in Addis Ababa (figures station explosion that took place over short-, medium-, and long- 7 and 8). 6 Figure 7. Engagement process while developing the City Resilience Action Plan in Chókwè, Mozambique. Figure 8. Key shocks and stresses in Addis Ababa identified during the City Strength Diagnostic. Flood Fire Earthquake Unprecedented Urban Growth Unemployment and Social Vulnerability Water Scarcity Investment in can undermine hard-earned through a multi-sectoral urban resilience development gains, trap the water management project. poorest and most vulnerable Using an integrated approach The acute and cumulative effects in poverty, and exacerbate to reducing urban flooding, the of disasters generate major inequality. The city of Teresina, project has included not only the economic and fiscal losses at Brazil, a previously flood-prone construction and improvement of the individual, community, and city of 844,000 residents, has drainage infrastructure, but also national levels. These events been investing in resilience the creation of green areas to 7 Figure 9. Improvements to urban infrastructure build resilience in Teresina, Brazil, following the integrated urban water management multi-sectoral project (Photos: City of Teresina). Before reduction, natural hazards and climate change, environmental sustainability, and social inclusion— will be won or lost in cities. As Before Mayor Ato Deriba Kuma of Addis Ababa declared, “Our cities are projected to play an increasing role in the economic transition . . . Strengthening urban resilience to multiple shocks and stresses will therefore prove crucial to the success of this transition and to ensure improved living conditions for residents.” With commitment from leaders, partners, and citizens, African cities are not only destined to lead After the resilience agenda, but also to spearhead the economic and mitigate the effects of flooding, the implementation of solutions, social transformations necessary improvement of water supply they will need strong leadership for reducing poverty and boosting and sanitation services, and the and coordination across all levels shared prosperity. regeneration of urban areas to of government, from local to promote economic development national; the scaling up of bottom- Contributors to the Session and leisure opportunities (figure up, locally managed funds, such 9). As a result of the investment, Ibidun Adeleken, University of as community saving groups; Ibadan, Nigeria the city has seen appreciation of engagement of the private sector; land values and development of Diriba Kuma, Mayor of Addis Ababa, and technical expertise to develop Ethiopia the local economy. a range of innovative financial Lídia Frederico Cossa Camela, Mayor instruments. Building resilience requires not of Chokwe, Mozambique only awareness of the risks the Firmino Filho, Mayor of Teresina, Brazil Conclusions city faces, but also the taking of Patricia Holly Purcell, UN Habitat & action to reduce vulnerability and In an increasingly urban world, Chair for Medellin Collaboration on increase capacity. As cities move the major resilience challenges Urban Resilience from the diagnosis of problems to of this century—poverty Khalifa Sall, Mayor of Dakar, Senegal 8 What Risks? A Sample Set of Risk Assessments from across Africa and How to Use Them Stuart Fraser, Disaster Risk Management Specialist, Global Facility for Disaster Risk and Reduction Francis Nkoka, Disaster Risk Management Specialist, World Bank Group D isaster risk assessment in the region. The increasing presented demonstrated several informs disaster number of risk assessments of the more common challenges. preparedness, risk being undertaken to address On the national and subnational reduction, financial protection, and these issues have varied in scale levels, examples were provided resilient reconstruction. Estimates from local (covering one city by a flood analysis in northern of affected population and or river catchment) to national Malawi, an account of the economic loss provide the basis (covering a whole country) to development of the Rwanda for disaster risk management regional (encompassing multiple National Risk Atlas and a local (DRM) and decision making in countries). Some focus on a analysis of landslide in Uganda. multiple sectors. They help in single hazard, while others try At the regional level, there were prioritizing DRM activities and to account for the multiple discussions around the benefits identifying the most effective hazards prevalent in most African and challenges associated with mitigation strategies. Additionally, countries. Floods, landslides, and risk assessment undertaken by quantifying changes in disaster droughts are relatively frequent as part of the multi-country risk through time, we improve the in many regions, while cyclones, South West Indian Ocean Risk potential for judicious planning earthquakes, and volcanoes also Assessment and Financing decisions to mitigate future risk. occur in limited areas. Initiative (SWIO-RAFI), and the collaborative earthquake risk Socioeconomic change and During the session, participants assessment in Africa. urbanization have brought discussed a number of challenges about rapid changes in people’s to implementing risk assessments Lack of capacity and exposure and vulnerability to and communicating risk data scarcity natural hazards in Africa, while information in the Africa region Session participants discussed the full impacts of climate change and outlined various ways to various issues related to capacity have yet to be experienced address them. The assessments and data sharing. Among them was the perception that Socioeconomic change and urbanization have local capacity to conduct risk brought about rapid changes in people’s exposure and assessments is lacking within vulnerability to natural hazards in Africa, while the full countries. To address this, impacts of climate change have yet to be experienced in governments often collaborate the region. with international organizations 9 and hire international consultants between local researchers and presenting risk is common among to conduct the assessments. external consultants, thus taking disaster risk institutions, including While this approach can bring full advantage of international UNISDR, GEM, and GFDRR. The in the required expertise, it expertise not only to benefit the Ministry of Disaster Management often diverts limited funding to current project but also to build and Refugee Affairs (MIDIMAR) contract management, as opposed in-country expertise for future in Rwanda has developed a more to building the countries’ own projects. One key advantage to thorough presentation of risk capacity. doing so is that it ensures the assessment outputs by producing sustainability of projects, as an atlas, which provides maps In some cases, capacity and the local expert can continue showing hazard and risk for the expertise do, indeed, exist implementing the plans after whole country alongside tabulated within countries, in particular in consultants have departed. impacts and text descriptions academia, and governments and Over time, reduced reliance on (Figure 10). Such a large international organizations should international input can result document has the advantage not miss the opportunity to in increased ownership and of being able to provide more expand local expertise. experience and investment of context for the results. resources into further developing Besides shortages in local capacity, local expertise—something Regardless of how the information many of the different hazard, that was recognized at the is delivered, data producers exposure, and vulnerability session by the representatives should engage users from the data required for effective risk of international organizations, early stages of a risk assessment assessment are not readily who also highlighted the need to maximize their understanding available. Participants recognized for greater collaboration and application of outputs; to international expertise as valuable between international and local ensure outputs are delivered for developing new datasets or stakeholders in global and regional in a way that provides better establishing data collection and risk assessments. understanding to nonexperts; and curation programs. The availability to empower communities to use of local experts and capacity- Communication of the risk information. building activities to maintain data outputs collection as an ongoing activity Lack of ownership remains vital, however, as does While many sophisticated the strengthening of information outputs are produced from risk A common barrier to developing management systems, including assessments, all too often this effective risk management development of a coordinated information is not employed to its policies based on the evidence of database for the collection, full potential in policy or planning risk assessments is that, often, storage, and sharing of data. because of a lack of effective an assessment and its associated communication. Results of risk outputs lack ownership. This In summary, any engagement with assessments too often are not can happen if a risk assessment external collaborators should seek released publicly, or they are is produced without a defined to maximize local capacity building published in specialist literature, purpose. To ensure the results of in terms of data, resources, and such as scientific journals. A risk assessments are put to good expertise by including strong recent trend is to share risk use, the assessments’ goals and partnerships throughout the assessment data via risk profiles— purposes should be defined at project. Governments should short documents using maps, the very beginning of the project, seek to build capacity in projects charts, and tables of values to and end users should be engaged by requiring true collaboration illustrate risk. This method of at the project design stage so 10 Figure 10. Landslide Susceptibility Map of Rwanda, excerpted from the National Risk Atlas of Rwanda. Reproduced with the kind permission of the Ministry of Disaster Management and Refugee Affairs, Government of Rwanda. the communication products becomes an essential component Contributors to the Session can be tailored to them. When of regular budgetary processes, Francis Nkoka, Disaster Risk communicating risk information, the results are more likely to be Management Specialist, World Bank it is important to deliver more incorporated into contingency Group than just outputs; data providers plans; the assessment process Kingsford Asamoah, Head of must also explain the assessment will have greater continuity; Research and Development, National process and, crucially, how to and policymakers will be more Disaster Management Organization, respond to or adapt policies based motivated to take action based Ghana on the conveyed results. on the information. Furthermore, William Harawa, Principal Economist, risk assessment will be treated Department of Disaster Management Affairs, Malawi Formalizing the risk as an important task and assessment process resources allocated accordingly Erasme Ntazinda, MIDIMAR if a relationship is established Martin Owor, Commissioner for To ensure risk assessment Disaster Risk Reduction, Uganda between risk assessment and outputs are incorporated into investment growth. Kresh Seebundhun, Lead Analyst, disaster risk management policies, Ministry of Finance, Mauritius the presenters proposed that the Vitor Silva, Seismic Risk Engineer, procedure be formalized within Global Earthquake Model (GEM) governments. If risk assessment 11 The town of 12Mafraq in the north of Jordan had 90,000 inhabitants before the Syrian crisis, with the influx of refugees its population has swelled to 200,000. The Zaatari refugee camp is now the fifth largest city in Jordan. Photo credit: William Stebbins / World Bank Crisis Complexity: Partnering to Improve Resilience in the Face of Rising Humanitarian Needs Bianca Adam, Disaster Risk Financing and Insurance Program, World Bank Group G er Duany was born in 1978 Poverty and vulnerability in the town of Akobo in go hand in hand what is now South Sudan. Like thousands of other boys Poverty and vulnerability to crises during the 1983–2005 civil war, are intrinsically linked. According he became separated from his to the 2016 Global Humanitarian family and was forcibly recruited Assistance Report, an estimated as a child soldier, afterward 93 percent of the people living spending many years in refugee in extreme poverty today are camps in Ethiopia and Kenya. in countries that are politically Today, more than three decades fragile or environmentally after the civil war began, Ger is vulnerable or, in many cases, both an actor and a regional goodwill (see figure 1). ambassador for the United Nations High Commissioner Growing needs for Refugees (UNHCR). He was In 2016 alone, 125 million recently reunited with his mother people are expected to need and other members of his family humanitarian assistance. who still live in a refugee camp Funding has increased with in Ethiopia that has become a the growing need, reaching a permanent settlement. record US$24.5 billion in 2014. Nevertheless, resources were not Unfortunately, the story of Ger and sufficient to address the need his family is not unique, and global that year, with US$7.5 billion’s displacement figures have now worth of requirements going reached a staggering sixty million unmet (see figure 2). people—the highest level of forced displacement since the aftermath of the Second World War. 13 Figure 1: 93 percent of the extremely poor live in countries that are fragile, environmentally vulnerable, or both 73m Other Fragile 332m 322m 318m Environmentally vulnerable Both fragile and environmentally vulnerable 1,045m People in extreme poverty, 2013 Source: Global Humanitarian Assistance, Global Humanitarian Assistance Report 2015, http://www.globalhumanitarianassistance.org/report/gha-report-2015. Figure 2: UN appeals provide the best measure of humanitarian needs. 25 20 19.5 7.5 15 US$ billions 12.9 13.2 10.5 10.0 9.5 4.7 10 4.9 8.1 2.8 4.3 3.6 6.0 5.9 2.3 5.5 12.0 5 2.0 2.0 1.6 8.0 8.5 7.1 6.2 5.7 5.8 4.0 3.9 4.0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 n Funding n Unmet requirements Source: Global Humanitarian Assistance, Global Humanitarian Assistance Report 2015, http//www.globalhumanitarianassistance.org/report/ gha-report-2015 14 Crises are a short-term innovation and finding efficiencies displacement because of problem . . . or are they? to make the most of the a “care and maintenance” resources available. approach that leaves As the average duration of unaddressed the impact on displacement has reached Panelists highlighted a series of host communities seventeen years, it is clearly no ideas for strengthening such Greater use of cash in places longer a temporary condition. linkages to reduce the short-term where it can purchase needed Long-term displacement carries costs and help capture the long- goods and services, with a high cost to host governments term gains: amounts adjusted to reflect and communities, increasing inflation the demand for food, water, Upfront collaboration in Collaboration with the sanitation, education, and advanced and integrated risk private sector and social health care. What often begins assessment and preparation entrepreneurs to ensure as a short-term humanitarian A complete rethinking of the most refugees and internally emergency turns into a lengthy risks faced by those who are displaced persons (IDPs) have development challenge. Thus, forcibly displaced in middle- mobile phones and possibly applying development solutions and low-income countries—by Internet connectivity as in a crisis helps set a longer-term environmental vulnerabilities, platforms for information vision for economic development, natural disasters, conflict, food gathering, service delivery which in turn prevents the (including mobile cash), and price shocks, pandemics, and recurrence of displacement data gathering, which would so on—and clear assignment of and reduces dependence on increase their economic responsibility for taking on and humanitarian aid. opportunities financing these risks among the public and private sectors, Linking humanitarian host governments, and donor Contributors to the Session and development action agencies Ger Duany, UNHCR supporter, South Building resilience is, therefore, A reform of peace operations Sudanese actor and former refugee crucial, as is addressing the root and diplomatic engagement, Jason Braganza, Senior Analyst, causes of crisis and meeting the led by the United Nations Development Initiatives long-term needs of the people and others, to prevent and Colin Bruce, Senior Advisor and affected by it. The message resolve conflicts and help Designated IASC Principal, Office of that resounded among the sustain peace the President, World Bank Group speakers at the session was the Increased government Mahboub Maalim, Executive need for better linkages and leadership, where possible, Secretary, Intergovernmental Authority on Development (IGAD) shared responsibility between and greater use of national humanitarian and development systems for delivery Raouf Mazou, Kenya Country Representative, UNHCR actors. And while additional An end to the “camp” resources are certainly useful mentality—that is, to the Deirdre O’Sullivan-Winks, Senior Project Manager for New Business to meet growing challenges, the inadequate support of Models, Start Network focus must also be on leveraging refugees in protracted Antoine Ruvebana, Permanent Secretary, Ministry of Disaster Applying development solutions in a crisis helps set a Management and Refugee Affairs, longer-term vision for economic development, which Rwanda in turn prevents the recurrence of displacement and Dennis Weller, Ethiopia Mission reduces dependence on humanitarian aid. Director, USAID 15 16 The Power of Insurance: Driving Financial Resilience for Governments and People Richard Poulter, Disaster Risk Financing and Insurance Specialist, World Bank Group How can the private The panel discussion focused on sector help individuals experiences and ideas that might build their resilience to shed light on how the private disasters? sector can help close this gap, most notably in the agriculture A ccording to a 2012 sector, which employs an average study conducted by the of 65 percent of the population of Bank for International countries in Africa.5 The following Settlements, the macroeconomic summarizes the main findings and costs of disasters are driven conclusions of that discussion. by the uninsured part of catastrophe-related losses, while Developing insurance for the if insurance coverage exceeds most vulnerable in Africa has been 60 percent, catastrophes can be challenging due to a combination “inconsequential or even positive of high up-front investment and for economic activity.”4 Insurance administrative costs, low financial markets in Africa, however, are in literacy and understanding of their infancy, especially for losses insurance, poor data for pricing related to natural disasters. The premiums, limited availability of resulting “protection gap” leads to reinsurance for pilot programs, the majority of disaster-related and a lack of confidence in losses being borne by the most insurers’ willingness and ability vulnerable members of society. to pay claims. These challenges have resulted in coverage initially 4 D. von Peter, S. von Dahlen, and S. Saxena, “Unmitigated Disasters? New being offered only to large-scale Evidence on the Macroeconomic Cost 5 of Natural Catastrophes,” BIS Working World Bank, “Fact Sheet: The World Paper No. 394, http://www.bis.org/publ/ Bank and Agriculture in Africa,” 2013, work394.pdf. http://go.worldbank.org/GUJ8RVMRL0. 17 farmers, which has left already for supplying the products policyholders through vulnerable small-scale farmers through these many different subsidies, or both. For any fully exposed to a variety of channels. private sector insurer, potential shocks. Data: The data many entering the index-based countries across Africa have insurance market is an The development of index-based on historical disaster losses investment: profitability may crop insurance has, in recent and past crop yields are not be achieved in the short years, transformed insurers’ ability very poor, which makes it term, but it is necessary in to offer products to individuals difficult for insurers to price the medium term to ensure and small-scale farmers. While their products appropriately. sustainability. Donor or index-based insurance continues Although recent technological government support at the to be a vital method of offering advances, such as the use of outset is vital to overcome financial protection to some of satellite data collection, have the initial barriers to entering the most vulnerable members made many new products the market. of society, ensuring commercial feasible, insurers face “basis viability is key to maintaining risk”—the possibility that Development partners can help private sector interest in such the indexes on which they insurers achieve commercial schemes. The private sector faces base their claim payments viability—and thereby assist the several hurdles that must be do not accurately reflect private sector in continuing to overcome to achieve this: the losses incurred. Further provide much-needed financial investments in data collection protection for vulnerable Scalability: With very and analysis are needed for individuals—in four areas: low premiums, insurance better ground-truthing and companies can only afford the to ensure products continue 1. Awareness raising and high administration costs they to be affordable and meet education: Development bear if they have the ability policyholder needs. partners play an important to sell their products to a role in raising awareness large number of individuals. Profitability: In almost of insurance as a disaster One way they are overcoming every successful agricultural management tool and this challenge is by supplying insurance program, increasing the understanding insurance products through government or donor of how insurance works. a variety of alternative assistance has reduced delivery channels, such as upfront costs to insurers 2. Supporting the role of the microfinance institutions, of investments that often government: The most seed companies, government have characteristics of successful agricultural agencies, mobile phone public goods (for example, insurance schemes in Africa operators, and research investments in customer and elsewhere around institutions. A common education, demand analyses, the world have involved a obstacle, however, is the lack a, and research), or has significant level of support of a regulatory framework reduced premiums to from the government to overcome some of the While index-based insurance continues to be a vital challenges identified above. method of offering financial protection to some of Development partners are the most vulnerable members of society, ensuring well placed to support public– commercial viability is key to maintaining private sector private partnership (PPP) interest in such schemes. approaches to developing 18 markets for index-based where the scheme will be and advancements in technology insurance. implemented. The transfer facilitating access to a new and of skills and knowledge from bigger client base, index insurance 3. Engaging in research and development partners to the is an important means by which innovation in product design: institutions implementing the the private sector can help Development partners have products is key to ensuring individuals become more resilient an important role to play in their ongoing success. in the face of increasing climate investigating which products extremes. work and which do not, The conclusion is clear: the private and why. Applying scientific sector has a vital role to play in Contributors to the Session research to understanding providing financial protection Esther Baur, Head Global markets and clients can lead from disasters. The social Partnerships, Swiss Re to targeted investments to welfare and economic benefits Yared Mola, CEO, Nyala Insurance improve product quality and of such schemes are evident, Company, Ethiopia Andrew Mude, affordability—both key to but ensuring their sustainability Principal Economist, International the success of index-based is not easy. The development of Livestock Research Institute (ILRI) products. index-based insurance is a multi- Erastus Ndege, Agronomist, APA stakeholder effort, and support Insurance Ltd 4. Building local capacity: Often from the public sector is vital. Benjamin Njenga, Head of Business actuarial functions such as With investments in capacity Analytics, Acre Africa product design, pricing, and building, awareness raising Hideki Watanabe, Assistant Director, reserving are performed and education, data to ensure Planning and TICAD Process Division, outside the country products meet policyholder needs, Africa Department, JICA 19 20© Simone D. McCourtie / World Bank Photo credit Governments in the Lead on Financial Preparedness: Lessons from around the World Benedikt Signer, Disaster Risk Financing and Insurance Specialist, World Bank Group A growing number of lessons learned from across the governments have begun world. The following describes the looking at managing experiences of four countries in the financial impact of natural different parts of the world that disasters in more systematic ways have made significant progress in by developing comprehensive financial planning for disasters— financial protection strategies. Morocco, the Philippines, the Often anchored in the finance Seychelles, and St. Lucia—and ministry, such strategies look looks to distill some key messages at disasters as a contingent for other countries. liability to the government that can be better managed in Case study—St. Lucia advance. These governments recognize that by applying basic A small island state exposed principles of financial planning to multiple natural hazards, St. and public financial management, Lucia has experienced on average they can increase their financial about US$40 million in losses resilience against disasters and from disasters every year for climate shocks. By taking steps the past twenty-five years. Risk toward becoming active risk models show that for earthquakes managers rather than emergency and tropical cyclones alone, St. borrowers, countries can secure Lucia should set aside about access to the money required 0.5 percent of its current gross for disaster response before events strike. This ensures rapid domestic product (GDP) every availability of the cash to finance year—approximately $7.6 million. response and recovery efforts. Extreme events can far exceed this. In 2010 Hurricane Tomas As several countries in Africa are devastated the country, causing intensifying their efforts on this damage and losses of $336 million, agenda, it is important to consider equivalent to 43 percent of GDP. 21 Recognizing this high vulnerability with an average of eight to nine most vulnerable residents at the to natural hazards, and the typhoons making landfall every individual level. The government fiscal vulnerability faced by a year. The capital, Manila, sits on has since worked toward small concentrated economy, St. top of an active fault line and has incorporating already existing Lucia’s government is gradually been estimated to be at risk of an financial instruments into this building and putting into place earthquake of up to magnitude overall strategy and putting a combination of financial 7.2. This could lead to more than new ones in place to fill gaps it instruments to protect against 34,000 deaths, 100,000 injuries, identified (see figure 1). disasters. As a member of the and 170,000 houses destroyed. Caribbean Catastrophe Risk Less severe but more frequent Case study—Morocco Insurance Facility (CCRIF), the flooding is on the increase, government can receive quick often driven by inadequate Morocco is exposed to floods, budget support following severe infrastructure and growing potentially devastating disasters. Acknowledging that an population density. earthquakes, and droughts that insurance solution cannot cover affect agricultural production. In all risk, the government is looking Following the devastating impacts recognition of these vulnerabilities to combine the protection offered of Typhoon Haiyan in 2013, the and the social tensions they by CCRIF with contingent credit Department of Finance set out might trigger, the government for more frequent events and to take a more proactive stance began to review its overall include disaster response as a line in building financial resilience. approach to managing risk, with item in the budget. This would It framed a financial protection risks from natural hazards as provide cost-effective coverage strategy to cover the whole its first priority. Building on a for events of differing severity society comprehensively by protecting the fiscal balance nationwide risk assessment, it and frequency. and defending the sovereign set out to overcome institutional credit rating at the national level, fragmentation in risk management Case study—the empowering governments to be and shift to a proactive, Philippines more self-sufficient in disaster transparent approach, driven The Philippines is one of the most response at the local level, and jointly by the Ministry of Interior vulnerable countries in the world, protecting households and the and the Ministry of Finance. Figure 1. DRFI in the Philippines—Blue denotes already in existence, white under implementation. Philippines Catastrophe Risk Model (2014) National DRM Fund Sovereign Risk Insurance of Public National and Quick Response Contingnet Credit Transfer Assets Funds Local Government Pooled Risk Insurance of Public Local Local DRM Funds Retention and Transfer Assets Residential Emergency Individual Micro Insurance Insurance Pool Safety Net 22 direct consequences for the country’s economy, which is highly dependent on tourism. Small, recurrent losses from low-impact disasters are mostly managed by the government budget. Three financing sources provide funds for post-disaster response. These are an annual budget contingency based on past budgetary analysis of disaster events (US$4 million in 2015); a National Disaster Relief Fund to raise local and international funds for post-disaster assistance; and Shopkeeper in Medina, central Tangiers. Photo credit : Arne Hoel / World Bank a World Bank contingent line In 2009, the government frequency and severity because of credit loan as an additional established a fund to reduce source of cash. To increase overall of climate change. The country, the impacts of natural disasters, resilience, line ministries are however, also faces other hazards, managed by the Ministry of integrating risk reduction into such as the 2004 tsunami that Internal Affairs and financed with investment planning, and they caused losses of US$30 million. initial seed capital and then annual contribute to overall disaster As a small group of islands with a management through their state budget allocations (US$20 fragile ecosystem, the Seychelles core functions (for example, the million a year). This largely reactive also faces biological hazards. The Ministry of Health contributes fund for reconstruction is now perception of the effectiveness through health risk surveillance being transformed into a national of its risk management has and control). resilience fund. To bring the private sector into effectively managing disaster costs, the government is also designing and implementing a national insurance program for protection against natural disasters for homeowners and businesses. A dedicated solidarity fund will compensate uninsured households affected by catastrophic events. Case study—the Seychelles The Seychelles is affected predominantly by hydrometeorological disasters, which are expected to grow in Wind turbines near Victoria town, Seychelles. Photo credit: dvoevnore 23 Disaster risk financing and Planning ahead and diversifying the financial insurance is a new policy field instruments available to the government through a around the world. But some financial protection strategy can reduce reliance on governments have already donor support and empower the government to take gathered important experiences quick actions and protect its citizens. and lessons learned. African countries that are closely following suit in economic growth Key messages more complex system through iterations and refinement of what and development could consider The experiences described in has worked. these lessons as they develop these case studies highlight a their own strategies to help number of key messages: Ownership by a strong protect their populations and government agency is crucial. The fast-accumulating development Financial protection ensures legal and institutional environment gains against disaster and climate that the government has the can be important to supporting shocks. resources available to meet the development of financial disaster response funding needs protection solutions. Significant Contributors to the Session as they arise. Planning ahead progress has often been achieved Ede Jorge Ijjasz-Vasquez, Senior and diversifying the financial when a ministry of finance has Director, Social, Urban Rural and instruments available to the Resilience Practice, World Bank Group recognized the key role financial government through a financial decision makers have to play in Paul Labaleine, Director General, protection strategy can reduce bringing about better financial Division of Disaster Risk Management, reliance on donor support and Seychelles preparedness against disaster and empower the government to climate shocks. Ed Marino, Division Chief, Asset take quick actions and protect its management, Bureau of the Treasury, Department of Finance, Philippines citizens. Appropriate risk information is Abdelmajid Mimouni, Head of important to officials who need catastrophe risk management, While financial preparedness to make informed decisions. Insurance Regulator Department, for disasters may seem to imply While this can take the form of Ministry of Finance, Morocco a complex, long-term agenda, a large-scale catastrophe risk Tracy Polius, Finance Permanent simple measures can provide model, gathering risk information Secretary, St. Lucia quick, tangible improvements to need not be a costly and long- Veronica Posada, Adviser to the Vice post-disaster outcomes. Actions term endeavor. For example, Minister, Ministry of Finance and that are small and modest much can be achieved through a Public Credit, Colombia but manageable and rapid are better understanding of historical often preferable to start with. disaster impacts. These can then grow into a 24 Scaling Up Social Safety Nets in Response to Disasters: The critical role of national programs Barry Patrick Maher, Senior Disaster Risk Financing and Insurance Specialist, World Bank Group efforts,6 which, studies show, can T he severe impact of Case Studies natural disasters on the suffer from delays in mobilization.7 poorest people can have Presentations of national safety long-lasting consequences for Innovative solutions are needed net programs from three African socioeconomic development. Rapid to speed up responses so they countries showcased how urbanization—often unplanned— are more timely and predictable. governments are using safety and the impacts of climate change Scalable social safety nets could net programs as a response increase the vulnerability of address this challenge, as they can mechanism to protect the poorest developing countries to natural people against shocks. be structured to provide timely, disasters. With limited capacity efficient, and targeted payouts Sunya Orre from the Government to absorb such shocks, the when the early signs of shock of Kenya (GoK) described the poorest are hit the hardest and become apparent. This means Hunger Safety Net Programme can find themselves resorting to countries could rapidly increase (HSNP), an unconditional cash extreme coping mechanisms with financial assistance to affected transfer program that has been adverse long-term consequences, households, either immediately providing regular, timely, and such as taking children out of following a shock or—in the case electronic cash assistance to school, selling assets, or reducing of events like drought—when early beneficiaries who are exposed to consumption. signs of onset become apparent. drought, which has a large negative impact on their development and Quick post-disaster assistance to 6 Global Facility for Disaster Reduction can lead to large financial costs. and Recovery, “Disaster Aid Tracking,” vulnerable households is essential AidData, 2016, http://gfdrr.aiddata.org/ GoK is now also using the HSNP to protect their welfare. Current dashboard. as a distribution mechanism for 7 For example, see Courtenay Cabot mechanisms, including many post-disaster assistance to the Venton, Catherine Fitzgibbon, Tenna humanitarian responses, are Shitarek, Lorraine Coulter, and poor, enabling early action from slow to reach people in need and Elizabeth Dooley, The Economics government to avoid a crisis. of Early Response and Disaster depend on external actors. Since Resilience: Lessons from Kenya and GoK recognizes the cost of the 1990, 16 percent of the more Ethiopia, Economics of Resilience Final mechanism is a key constraint Report, Department for International than US$56 billion in post-disaster Development, United Kingdom, June and is working to develop risk- aid coming from the international 2012, https://www.gov.uk/government/ financing instruments to manage uploads/system/uploads/attachment_ community has been used to data/file/67330/Econ-Ear-Rec-Res-Full- it. Key lessons include the value of fund purely short-term food-aid Report_20.pdf. GoK’s mass registration and bank 25 account–opening exercise, which to households suffering from and how, when, and for enables rapid scale up; the primary both chronic and transitory food how long. This is especially importance of early warning to insecurity, with the objective true for scalable safety early action; and the importance of of strengthening livelihoods nets. Experience to date local politics, acknowledging that and building community assets. suggests such clarity can be scientific and speedy approaches PSNP, part of Ethiopia’s five- achieved through investing do not ensure political acceptability. year development agenda, aims in government systems, to enable its beneficiaries to preparedness, delivery Martin Owor from the engage in productive activities mechanisms, and early Government of Uganda (GoU) that enhance resilient livelihoods, warning systems to adopt discussed the Northern Uganda ranging from rehabilitating a rules-based approach to Social Action Fund (NUSAF) III land and water resources scaling the safety net. project, which looks to address to developing community 3. Any scalable social protection the impact of disasters on the infrastructure, including rural road scheme can be effective poor in the northern region of rehabilitation and the building of only if the underlying data the country. Through a public schools and clinics. One key lesson sources that trigger scale-up works component, NUSAF III to be drawn from PSNP is that responses provide accurate, provides beneficiaries with a comprehensive coordination timely, and transparent seasonal transfers in return for system must be in place among all information. Uganda’s their labor, with the objective relevant institutions by the time NUSAF III project will look of sustaining and increasing a disaster hits. PSNP is setting up to combine satellite-based their assets and smoothing a coordination agency that allows remote sensing data with consumption during lean the different social protection, ground-collected indicators seasons. GoU now plans to use disaster risk management, and to ensure the scalability the public works component as climate change authorities mechanism is activated only a delivery channel to increase to learn from one another in cases when the early financial assistance to affected and identify opportunities for warning indicators exceed a households upon identification cooperation. predefined threshold. of a shock event, using the established targeting and Challenges and 4. In fragile and conflict- payment systems to select and Recommendations affected states where transfer funds. Key lessons from establishing a government- The following challenges and the NUSAF experience include led safety net may not be recommendations arose from the the importance of institutional possible, the international session: capacity building; the need to community has a key role invest in data systems to collect 1. Enhanced coordination to play. Given an estimated information on disasters; and the and accountability among 90 percent of humanitarian importance of monitoring and all the actors—including appeals from 2014 arose communication technology. development, donor, and from conflict situations, humanitarian—in national establishing long-term plans Sarah Coll-Black, senior social programs and systems is to address the needs of the protection specialist for the important, with Governments poor and vulnerable in such World Bank, talked about playing a central role. situations will be important. Ethiopia’s Productive Safety Net Programme (PSNP), which 2. Clarity must be obtained 5. There are no one-size-fits- provides cash and food transfers on who carries what risk all solutions. All scalable 26 Typhoon Haiyan Damage, Tacloban. Photo credit: Tigeryan safety net programs must reduced humanitarian spending, and subject to closer scrutiny, be tailored to the profile avoided losses, and development and a slowing global economy. of natural hazards, the gains.8 As the frequency and Scalable safety nets represent an potential impact on the severity of disasters continue opportunity to achieve the triple local population, and the to increase, scalable safety nets win of risk resilience, reduction, existing infrastructure must be embedded in a larger, and response by developing robust and economic structure, interdisciplinary framework linking systems, preferably government priorities of Governments social protection, disaster risk owned, to channel assistance to and key partners as well as reduction, climate change, and the poor and vulnerable rapidly the legal and institutional humanitarian response programs when a crisis unfolds. circumstances. to encourage a joint effort toward building resilience before shocks hit. Contributors to the Session Conclusion Berhanu Woldemichael, Director, Food Security Coordination The world may be entering a Establishing safety net programs Directorate, Ethiopia phase in which ending poverty is costly, can be challenging, and Robert Limlim, Director, Northern and boosting shared prosperity requires political will. That said, a Uganda Social Action Fund (NUSAF III) will be challenging. With climate growing body of evidence shows Sunya Orre, Director of Technical change, El Niño events, and fragility large cost savings can be achieved Services of National Drought and conflict growing in intensity, Management Authority, Kenya by channeling post-disaster risks seem to be increasing. In assistance through safety net Berhanu Woldemichael, Director, addition, the global community Food Security Coordination programs; according to research faces financing challenges: the Directorate, Ethiopia from the UK Department for humanitarian system is under Liz Drake, Section Head Social International Development, severe financial pressure, with 40 Protection, Emergencies & Resilience, every U.S. dollar spent on Senior Poverty, Hunger and Vulnerability percent of UN appeals left unmet disaster resilience has resulted Adviser, DFID Kenya in 2014, aid budgets shrinking in benefits of $2.80 in Ethiopia Massimo La Rosa, ECHO office in and $2.90 in Kenya in the form of 8 Ibid. Nairobi, European Union 27 28 filled with patients seeking treatment at Liberia Government Hospital, in Tubmanburg, Liberia on June 23, 2015. Dark hallways Photo credit © Dominic Chavez/World Bank After Ebola: The Future of Pandemic Risk Management Bianca Adam, Disaster Risk Financing and Insurance Program, World Bank Group A t the beginning of 2014, the the first to hit the continent. World Health Organization Africa has seen a number of (WHO) officially declared (nonpandemic) Ebola outbreaks an Ebola outbreak in West Africa. since 1976 (see figure 1). In 2000, Three contiguous countries— for example, Uganda experienced Guinea, Liberia, and Sierra over four hundred cases. Leone—took the brunt of the health emergency, which caused Ebola in Sierra Leone at least 11,315 deaths. With the Sierra Leone was the first of the outbreak over in most countries, three most severely affected experts are now taking stock of countries to declare victory what worked and what did not when the end of the outbreak in dealing with the crisis and are was announced in November analyzing lessons learned. 2015, but the road to “resilient zero”—that is, the point of Not the first, achieving and sustaining zero nor the last new transmissions—was not easy. Like other hazards, pandemic The epidemic swept through the risk has threatened humankind country, with 8,704 confirmed throughout history. From the cases spread across all of its Black Death of the fourteenth fourteen provinces. An emergency century to the ongoing HIV/ on this scale overwhelmed Sierra AIDS pandemic and the recent Leone’s weak health sector, outbreaks of severe acute with its physical infrastructure respiratory syndrome (SARS), damaged by ten years of civil war we have many examples of the and its two hundred doctors for ravaging effects of fast-spreading a population of seven million. The diseases. unprecedented crisis required unprecedented measures, and, in And while the magnitude of the October 2014, President Ernest most recent Ebola outbreak was Bai Koroma created the National unprecedented, this was not Ebola Response Centre (NERC) 29 Figure 1. Ebola outbreaks in Africa 1976–2015 (World Health Organization) to lead the response and achieve It is vital to be prepared and act with partners on all key decisions “resilient zero.” fast. Preparedness capabilities and actions. are key for early detection, What next? Some verification, response to, and Rapid and predictable access to reflections mitigation of pandemic risks. adequate resources is crucial. National health services in Sierra Without adequate resources The session benefited from Leone were not equipped to for risk monitoring and rapid the insights of representatives respond to the outbreak, and response, pandemic threats of affected countries and help from international partners cannot be effectively mitigated. international organizations who arrived too late. Countless lives were on the frontlines of the could have been saved had the Behavioral changes are key response to the Ebola outbreak, response been faster. but challenging to bring about. as well as some from the private Influencing the behavior of people sector who are pioneering Strong leadership and effective to reduce overall caseload is innovative solutions to improve coordination are central to very difficult and requires strong future pandemic response. The effective response. The rapidly engagement at the community conversation highlighted some key changing response made it level, where women in particular reflections arising from the recent difficult to maintain alignment can be powerful agents of change. outbreak: 30 Contributors to the Session Strong leadership and effective coordination are central to effective response. The rapidly changing response Margaret Lamunu, Epidemiologist, Ebola Response Lead in Sierra Leone, made it difficult to maintain alignment with partners on World Health Organization all key decisions and actions. Esther Baur, Head Global Partnerships, Swiss Re The media also play an important promising solution to ensure Mohamed Beavogui, Director General, role in delivering targeted fast availability of financial ARC messaging and ensuring accurate resources, but it should not be Sunkarie Kamara, Mayor, Makeni, information is reported. seen as a substitute for ex ante Sierra Leone investments in preparedness Henry Keraly, Country Director for Health systems need to and the strengthening of health Ghana, Liberia and Sierra Leone, be strengthened. Greater systems. Rather, it complements World Bank investments and efforts are these efforts and provides Gbeme Horace Kollie, Deputy needed for health systems to additional resources in the event Minister for Operations, Ministry of Internal Affairs, Liberia help prevent, detect, and respond of a large-scale emergency such to potential infectious disease as the recent outbreak. The idea Mads Oyen, Regional Emergency threats. Adviser for West Africa, UNICEF is currently being developed, with the World Bank Group, the World OB Sisay, Director, Situation Room, The need for fast, comprehensive, National Ebola Response Centre, Health Organization, and private Sierra Leone and well-resourced response sector partners, including Swiss was echoed throughout Re, exploring the technical aspects the discussions. Pandemic of a Global Pandemic Insurance risk insurance emerged as a Facility to be launched in 2016. Leaders from the three West African countries most-affected by the Ebola crisis to discuss the critical issues, needs, and possible solutions to 31 address the impacts of the crisis. Shown: Ngozi Okonjo-Iweala, Finance Minister, Nigeria. Photo credit: Grant Ellis / World Bank 32 Rethinking Risk Management Approaches and Practices in Africa Jean-Baptiste Migraine, Disaster Risk Management Specialist, World Bank Group various aspects of vulnerabilities A frica is highly vulnerable to droughts, floods, in Africa and provided examples climate change, forced of how to rethink the current displacement, political instability, risk management approaches and chronic poverty, conflicts, and practices for a more integrated pandemics. Each single shock risk management and financing associated with these risks can framework. have a significant impact on economic and social development, Case studies, which can trap communities and challenges, and individuals in a vicious cycle of recommendations poverty. Managing risks requires long-lasting political leadership Participants at the session and acute technical knowhow, shared lessons from a number as well as crosscutting risk of specific experiences, including management with adequate the response to the Ebola crisis linkages between preventive in Western Africa and, more and emergency interventions. specifically, in Sierra Leone Experience in risk management (2014–15); preparedness for has progressed tremendously flooding in Uganda related to El over the past decade, with Niño (2015–16); and efforts to lessons having been learned develop resilience in the Horn regarding the need to combine of Africa. Risks in Africa are emergency and long-term actions interdependent in highly complex and to engage multiple sectors ways, exhibiting different “trends” across multiple governance levels. and presenting very unpredictable The management of these risks successions of crises. Capacities requires close cooperation across to cope are unequally distributed, humanitarian and development and natural hazards tend to bring sectors that often operate in higher impacts than in other parts isolation. The session highlighted of the world. 33 Highlighted the importance Although a total of about US$1 billion was successfully of having a regional mobilized over less than eight days for emergency approach to disaster risk response to the recent Ebola crisis, implementation management in Africa that of concrete activities for the benefit of vulnerable can address challenges populations took a very long time. and facilitate decision Although a total of about Session participants also did the making for towns sharing US$1 billion was successfully following: boundaries with different mobilized over less than eight countries. Participants days for emergency response Recommended the setting of discussed how policies, to the recent Ebola crisis, prequalified agreements, with approaches, and financing implementation of concrete institutions playing a role in could be coordinated to activities for the benefit of emergency response, as an best advantage among vulnerable populations took a very member states of the essential measure to ensure long time. Lengthy negotiation Intergovernmental Authority more effective response and on Development (IGAD) processes fraught with better predictability. Decision to ensure inclusion of the administrative and logistical issues makers need greater capacity different elements of risk were responsible for the delay. to respond to emergencies, management in different and it can best be developed planning processes at the In Sierra Leone, the Ministry of through the implementation regional level. Health and Sanitation initially of preparedness, prevention, established emergency operation and disaster risk–financing Confirmed communities centers (EOCs) in the most activities. as the first responders affected districts. Subsequently, in emergencies and Analyzed the preparedness identified effective national the government decided to set process for flooding related coordination mechanisms as up a structure that could be to El Niño in Uganda key for effective community replicated at all levels across the and demonstrated how and civil society participation country and created the National preventive measures, in risk reduction processes in Ebola Response Centre (NERC) as coordinated by the situations where coordinating a coordinated entity led by the government and with strong activities tends to compete Ministry of Defense. District Ebola participation from civil with implementing them, and response centers (DERCs) were society organizations and the practitioners tend to have created to manage and coordinate Uganda Red Cross, can reduce limited time for coordination. response at the district level. The the impacts of flooding transition between the EOCs and the DERCs posed a challenge, nationwide. Conclusions suggesting that a unique and Emphasized the need Session participants highlighted well-defined governmental to factor disaster risk the need to address risks in a organizational structure should management components more holistic manner, with due be adopted for future crises to into all government consideration of both stable and avoid the difficulties of making the programs, investments, or fragile countries. Humanitarian transition from one emergency developments and to involve and development actors have response structure to a different all sectors of government in the potential to design solutions one, each under a different the preparation and execution and make funding available ministry of the government. of disaster risk policies. for the innovative integrated 34 A portrait of Ebola survivors Mariatu Munu and her daughter on March 12, 2015 in Freetown Sierra Leone. Unimaginably 13 of 14 family members were infected with Ebola, 10 died, 7 of those were children. Photo © Dominic Chavez/World Bank risk management approaches The session confirmed the need Musa Ecweru, Minister of State for advocated during the session, and for and discussed challenges Relief, Disaster Preparedness and Refugees, Uganda the following tools presented at to such a holistic approach to the conference, among others, risk management at all levels of Anne Juepner, Director, Global Policy are currently being piloted: governance, from local authorities Centre for Resilient Ecosystems and Desertification, UNDP to international organizations. Early warning coupled with Sunkarie Kamara, Mayor, Makeni, Sierra Leone forecast-based financing The Understanding Risk community will continue tracking Mahboub Maalim, Executive Emergency response and Secretary, Intergovernmental contingency plans assigning good practices in Africa and Authority on Development (IGAD) responsibilities to different present progress at a side Florian Neutze, Disaster Risk stakeholders event at the upcoming Venice Management Focal Point, Federal Understanding Risk Forum. Longer-term land use Ministry for Economic Cooperation and Development (BMZ), Germany planning and building codes to Contributors to the Session limit the creation of new risks Alasan Senghore, Africa Regional Colin Bruce, Senior Advisor and Director, IFRC Insurance and risk transfers Designated IASC Principal, Office of to ensure more rapid the President, World Bank Group recovery Mukesh Kapila, Professor of Global Health and Humanitarian Affairs, University of Manchester 35 36 Building Resilience through Risk Financing: Cross-Sharing Experiences with Island States and Other Countries Animesh Kumar, Deputy Regional Coordinator (Africa), United Nations Office for Disaster Risk Reduction (UNISDR) A lthough risk transfer and exploring the introduction of financing are recognized as effective risk transfer and effective tools for disaster financing solutions. The session risk reduction, awareness and focused especially on the Island understanding of their potential States but brought together case for informing decisions on risk studies from other countries as financing for disasters are well to explore these experiences. limited among decision makers, including both those in disaster Case Studies risk reduction and disaster management and those in finance Representatives from Ethiopia, planning communities. The need Madagascar, Niger, and Saint is increasing for a conjoined Lucia shared country experiences, understanding of risk-informed lessons, and good practices on risk planning, development, and knowledge tools that have formed investments. the basis for risk financing. The sharing of experiences, Member states of the Indian challenges, and good practices Ocean Commission (IOC), including from across Africa on risk Madagascar, have benefited from management approaches provided the Islands Project, implemented insights from accumulated jointly in the region by the IOC, experience in this field to both the Global Facility for Disaster public and private sector entities, Reduction and Recovery (GFDRR), including those in less developed and the United Nations Office for countries that are currently Disaster Risk Reduction (UNISDR). 37 Highlighted by all these case studies is the need to and complementary fields, develop and implement a comprehensive risk knowledge like disaster risk reduction, package to make actors and stakeholders aware of the climate change adaptation, importance of ensuring investments in risk financing and social protection, are and to enhance awareness where it exists. limited. Countries’ technical expertise While Madagascar has developed and to enhance awareness to develop and apply risk through this project a model for where it exists. The package, as assessment tools is limited. risk knowledge to inform public implemented by these countries, Governments hesitate to investment strategies, Niger has includes disaster loss accounting invest in prevention. As developed hybrid risk profiles (comprising knowledge of past prevention is not visible, it and is in the process of using disasters), risk profiles and is increasingly difficult to these. Ethiopia has developed probabilistic risk models (to convince constituencies and multiple risk information tools, make projections about future budget holders of the need including local-level risk profiles, disasters), and the use of these for it. and has a functioning risk two tools to inform risk-sensitive financing mechanism linked to its planning and investment decisions. productive safety net mechanism. Recommendations All three countries have disaster Challenges The following recommendations loss accounting systems on a will help countries address these standard online platform (www. Key challenges to the use of risk challenges: desinventar.net), which provides transfer and financing as effective an insight into historical disaster tools for disaster risk reduction Countries at similar risk levels records and associated damages include the following: should develop as viable and losses. options joint strategies and Understanding of risk programs to share risks and Saint Lucia provided a diverse financing is limited across associated costs. example from a Caribbean Small countries by inadequate Financial institutions (such as Island Developing State (SIDS). knowledge about risk. insurance companies) should Through an integrated disaster Despite the proven efficacy be kept fully on board at risk management approach, Saint of risk prevention and every stage of development Lucia has implemented structural reduction, countries and of risk management and nonstructural measures to development partners frameworks. safeguard physical investments continue to pay more and reduce vulnerability, while A risk financing mechanism attention to disaster financing support for climate should be developed preparedness and response. adaptation at the private sector and implemented as a Financial protection and risk common vehicle to link and household levels. prevention require long-term social protection, disaster plans and steps. Authorities risk reduction, and climate Highlighted by all these case often prefer quick-result change adaptation programs, studies is the need to develop options, however (hence, the thus enhancing investment and implement a comprehensive inclination toward disaster coordination and community risk knowledge package to make actors and stakeholders aware response). ownership. of the importance of ensuring Policy and institutional Strategic program investments in risk financing linkages among related investment frameworks 38 should be developed to guide Conclusions Such an understanding will guide investments. structural and nonstructural Public and private investment measures while building and Institutional integration in disaster risk prevention leveraging community awareness. and coordination should be and reduction is essential to Coordination across sectors enhanced by the creation of a enhancing resilience. Such and institutions is vital for disaster risk reduction (DRR) measures are cost effective effective resource utilization, and coordination agency at the and instrumental to saving lives, government commitment to risk highest level of government. preventing and reducing losses, prevention and reduction is vital National platforms should be and ensuring effective recovery to enhancing resilience. strengthened as viable bases and rehabilitation. The Sendai for effective institutional coordination and partnerships. Framework calls for disaster Contributors to the Session risk management policies and Julio Serje, UNISDR Structural measures practices to be based on an Adesse Bekele, Advisor to the State should be integrated with understanding of disaster risk in Minister, Disaster Risk Management nonstructural measures all its dimensions of vulnerability, and Food Security Sector, Ethiopia (for example, community capacity, exposure of persons and Amina Bra, Technical Advisor, awareness) for effective risk assets, hazard characteristics, and Ministère de l’Hydraulique et de reduction and building of the environment. l’Assainissement, Niger resilience. Eugério de Almeida Moniz, General The range of options for Hence, attaining the right Directorate of Planning, Ministry of financing disaster risk should understanding of disaster risk Planning and Finance, Sao Tome and be expanded, and it should be through appropriate tools Principe contextualized to local and and technologies is essential Andrianaivo Rakotomanana, national needs. to developing and effectively Ministry of Finances and Budget implementing risk financing tools. Focal Point, Madagascar 39 40 in a community hard hit by drought in Kenya. Photo credit: Flore de Preneuf / World Bank Women farmers Protecting Development Gains: The Power of Risk Pooling and the G7’s InsuResilience Initiative Simon Young, CEO, African Risk Capacity Insurance Company Ltd R egional risk pools in Africa, Facility (CCRIF) has been insuring This enables a swift response and the Caribbean, and the Caribbean countries against avoids the loss of development Pacific are growing. In earthquakes, hurricanes, and, gains that result from delayed addition to providing affordable more recently, excessive rainfall, relief interventions. Pooling risk and fast-paying insurance and it is now expanding to cover regionally reduces the price of coverage for countries, these Central America. The Pacific such insurance significantly for pools create a platform for better Catastrophe Risk Assessment and each country as the pools benefit risk information, risk management, Financing Initiative (PCRAFI) has from the natural diversification and regional collaboration. They facilitated insurance for Pacific of weather risk, and a bigger can be instrumental in achieving Island states against tropical portfolio of risk attracts better the recent G7 target of covering cyclones and earthquakes starting pricing in the international risk up to 400 million more people by in 2012. And, since 2014, the markets. climate risk insurance by 2020. African Risk Capacity (ARC) has provided insurance cover for Risk pooling can, furthermore, Climate change is already having African Union member states have an impact on a country’s an impact on the poor, many of against catastrophic drought, sovereign credit rating, whom are heavily dependent on and it will soon cover flood and which determines the cost of agriculture for their livelihood. The tropical cyclone risk. international borrowing. In a expected rise in the frequency recent report, Standard & Poor’s and intensity of extreme weather indicated it intends to include a events will, therefore, become vulnerability index in its sovereign a major issue for developing The power of risk risk assessments in the short to countries. Their vulnerable pooling: Experience medium terms. A lack of robust populations will require the better from the Caribbean and disaster risk financing mechanisms protection risk pooling could help the Pacific to manage vulnerability could lead provide. to a downgrade of up to two and a The benefits of catastrophic risk half notches for some countries.9 insurance pools have been clearly In recent years, regional Financial protection tools such as demonstrated. Participating insurance pools have developed countries that are exposed to worldwide to protect countries 9 recurrent climate shocks can gain Standard & Poor’s Ratings Services, against climate variability and, Storm Alert: Natural Disasters Can access to liquidity quickly in the Damage Sovereign Credit Worthiness, in some cases, geophysical risks. aftermath of disasters in the form McGraw Hill Financial, September 2015, Since 2007, the Caribbean http://unepfi.org/pdc/wp-content/ of index-based insurance payouts. Catastrophe Risk Insurance uploads/StormAlert.pdf. 41 risk pools could mitigate potential Risk pooling for Africa: In ARC’s first year of operation, negative effects. The African Risk covering the 2014–15 agricultural Capacity seasons, three out of four insured The idea of risk pooling led to countries were affected by the establishment of CCRIF and Building on experience with risk drought in the Sahel. The drought PCRAFI. In both the Caribbean pools globally and the use of index triggered three payouts, requiring and the Pacific Islands regions, products to manage drought risk, ARC Ltd. to disburse $26 million the exposure to tropical storms ARC Ltd. was established as an to the affected states: Mauritania, and earthquakes is high. For insurance facility that provides Niger, and Senegal. ARC’s second example, the annual probability coverage against drought and pool, for the 2015–16 policy year, of a hurricane striking Jamaica other natural catastrophes to includes eight countries. is over 20 percent. And ten African Union member states countries in the Pacific are under the umbrella of the African Some of ARC’s challenges include among the top thirty worldwide Risk Capacity, a Specialized Agency the need to work with African considered most vulnerable to of the African Union. ARC’s Union member states to assess natural disasters.10 objective is to provide funding and address their disaster risk directly to African governments adequately, to improve early While risk pools do not mitigate in the event of a shock more warning systems in place, and the physical impact of disasters, reliably and quickly than traditional to build contingency plans that they can soften the blow humanitarian aid. will allow countries to respond financially and can do so quickly. quickly to disasters. The ARC Since 2008, CCRIF countries A member state that takes Agency therefore focuses on have received thirteen disaster- out insurance from ARC Ltd. is working jointly with member linked payouts totaling more required to have a predefined states to improve their capacity than US$37 million, and PCRAFI contingency plan identifying for disaster risk management. countries have received two how the funds would be used in An additional, ongoing challenge payouts of more than $3 million case of payout. In the event a is the ability of member states since 2013. As the payout payout is triggered, ARC funds to set aside dedicated premium triggers are based on objective, are delivered to the insured payment resources when faced quantitative data available country’s government within with competing demands on immediately after an event, the two to four weeks of the end government budgets. ARC’s aim payments have been among of the season. Taking ownership is for governments to embed the first to provide liquidity for of the implementation process, premium payments in their disaster response, arriving within the government is required national budgets and national a few days to a couple of weeks to spend the funds according strategies to ensure long- after the catastrophes. to the contingency plan that term ownership of disaster ideally is implemented within management. 120 days of an ARC payout, and/ or on activities that prompt or ARC is actively expanding its enable other activities ensuring a portfolio of financial products. faster and more effective overall Responding to member state response. Mali’s plan, for example, demand, it has announced the 10 specifies that an ARC payout after launch of flood and tropical United Nations University, WorldRiskReport 2014, Alliance a drought would be spent on food cyclone coverage as well as Development Works, Bonn, Germany, distribution, cash transfers, and insurance for pandemic risks, such 2014, http://ehs.unu.edu/news/news/ world-risk-report-2014.html#files. livestock feed. as Ebola In addition, ARC has 42 A member state that takes out insurance from ARC to natural disasters. Even non- Ltd. is required to have a predefined contingency plan PCRAFI members have used the identifying how the funds would be used in case of data. One example is New Zealand payout. Aid, which used the information to target its development policies in the Pacific region. launched the Extreme Climate some risk, with 2 percent of Facility (XCF), which will issue the national budget allocation In conclusion, as witnessed in catastrophe bonds to provide scheduled by law for unforeseen Africa, the Caribbean and the adaptation financing to member expenditures, including those Pacific, regional risk pooling can states affected by longer-term linked to disasters, while other be a cost-effective mechanism to climate events in Africa. Still in the risk is transferred. As early as provide timely and reliable funding development phase, these bonds 2005, Malawi experimented for emergency relief efforts to will crowd in investor financing with weather-based index crop disaster-affected countries. In and pay out to member states insurance that was to pay out addition, such pools can provide based on objective weather-based to farmers when rainfall was a platform for related capacity indices. less than anticipated. This was building measures and also followed by a weather derivative improve the availability of risk An Effective Mix of in 2008–9 that would provide information that can be employed Risk Retention and Risk funding to the government for other purposes beyond climate Transfer Is Needed in case low rainfall led to low risk insurance. maize production. Finally, Malawi Effective risk management is purchased drought insurance Contributors to the Session more than just risk financing. through ARC Ltd. in 2015. When risk is transferred, it is Simon Young, CEO, African Risk Capacity Insurance Company Limited not the end of the story, as Benefits beyond governments must still absorb Ronald Mangani, Secretary to Climate Risk Insurance the Treasury, Ministry of Finance, risk and shocks, as well as provide Economic Planning and Development, effective disaster response Through risk transfer solutions, Malawi measures in light of the severe valuable risk information is Florian Neutze, Focal Point for impacts of the shocks. Therefore, collected that can also be used Disaster Risk Management, Federal in addition to creating good for other purposes. In the case Ministry for Economic Cooperation disaster response capacity, of PCRAFI, a risk information and Development (BMZ), Germany a financial risk management database was created which Malcolm Buamah, Chief Risk Officer, framework is necessary to define informed urban planning in Caribbean Development Bank (CDB) which risks will be transferred and Vanuatu. It was also used by Samantha Cook, DRFI Specialist, which will be retained. domestic insurance providers to Disaster Risk Financing and Insurance improve their standard insurance Program, World Bank The need for such a framework products to include disaster Hideki Watanabe, Assistant Director, is exemplified by Malawi, which risks and by macroeconomists Planning and TICAD Process Division, is exposed both to drought and to determine the accuracy of Africa Department, JICA floods. The government retains their stress testing with regard 43 Innovations in Risk Mapping | Urban Resilience in Africa: Perspectives from Experts and City Officials | What Risks? A Sample Set of Risk Assessments from across Africa and How to Use Them | Crisis Complexity: Partnering to Improve Resilience in the Face of Rising Humanitarian Needs | The Power of Insurance: Driving Financial Resilience for Governments and People | Governments in the Lead on Financial Preparedness: Lessons from around the World | Scaling Up Social Safety Nets in Response to Disasters: The critical role of national programs | After Ebola: The Future of Pandemic Risk Management | Rethinking Risk Management Approaches and Practices in Africa | Building Resilience through Risk Financing: Cross-Sharing Experiences with Island States and Other Countries | Protecting Development Gains: The Power of Risk Pooling and the G7’s InsuResilience Initiative | Innovations in Risk Mapping | Urban Resilience in Africa: Perspectives from Experts and City Officials | What Risks? A Sample Set of Risk Assessments from across Africa and How to Use Them | Crisis Complexity: Partnering to Improve Resilience in the Face of Rising Humanitarian Needs | The Power of Insurance: Driving Financial Resilience for Governments and People | Governments in the Lead on Financial Preparedness: Lessons from around the World | Scaling Up Social Safety Nets in Response to Disasters: The critical role of national programs | After Ebola: The Future of Pandemic Risk Management | Rethinking Risk Management Approaches and Practices in Africa | Building Resilience through Risk Financing: Cross-Sharing Experiences with Island States and Other Countries | Protecting Development Gains: The Power of Risk Pooling and the G7’s InsuResilience Initiative |Innovations in Risk Mapping | Urban Resilience in Africa: Perspectives from Experts and City Officials | What Risks? A Sample Set of Risk Assessments from across Africa and How to Use Them | Crisis Complexity: Partnering to Improve Resilience in the Face of Rising Humanitarian Needs | The Power of Insurance: Driving Financial Resilience for Governments and People | Governments in the Lead on Financial Preparedness: Lessons from around the World | Scaling Up Social Safety Nets in Response to Disasters: The critical role of national programs | After Ebola: The Future of Pandemic Risk Management | Rethinking Risk Management Approaches and Practices in Africa | Building Resilience through Risk Financing: Cross-Sharing Experiences with Island States and Other Countries | Protecting Development Gains: The Power of Risk Pooling and the G7’s InsuResilience Initiative |