Hazard Risk Management in EAP

East Asia and the Pacific (EAP) is extremely vulnerable to the impacts of natural disasters. Over the past two decades, floods, typhoons and earthquakes have affected two million people in the region, killing nearly 90,000, and causing damages totaling more that US$151 billion. The Asia tsunami that occurred in 2004 devastated coastal areas of Indonesia and Thailand, killing more than 120,000 people and wiping out livelihoods, infrastructure systems, and economic assets.

The World Bank has lent more than $26 billion for disaster-related projects worldwide since 1984. Since 1988, there have been six emergency reconstruction loans for China alone, costing over $400 million. These disasters have an immediate, devastating impact upon a country, and sidetrack long-term poverty reduction programs already in progress.

The Bank is taking a more strategic approach to support its clients to manage natural disasters. Instead of diverting financing from ongoing projects in order to finance recovery and reconstruction efforts, the Bank now provides investment lending for specific emergency response, as well as disaster mitigation, prevention, and vulnerability reduction projects.

Many developing countries have begun to take proactive measures to minimize the effects of natural disasters through a number of actions, including:

Institutional strengthening: An important factor in each disaster mitigation project is the strengthening of local and national disaster management groups, training of disaster management officials, support for institutionalizing building codes and land use planning, and the development of internal competencies to identify and mitigate risks. 

Risk identification: A thorough understanding of existing vulnerabilities, including their location and severity, is critical for the development and prioritization of investment programs in risk management. A broad range of activities contributes to the identification and understanding of natural hazard risks including hazard data collection and mapping, vulnerability assessments, risk assessments and post disaster assessments.

Risk reduction: Risk reduction activities are designed to mitigate damage from hazard events. Activities addressing existing vulnerabilities can take the form of retrofit, strengthening and relocation. Activities to reduce future vulnerabilities would typically include the development and enforcement of building standards, environmental protection measures, land use planning that recognizes hazard zones, and resource management practice, etc.

Risk transfer: It is not always possible to completely eliminate the vulnerability of key assets. In many cases, there may be critical components of a nation's infrastructure that remain at risk. Insurance mechanisms are used to transfer risks that cannot be mitigated through structural or ex-ante damage reduction measures, and against events that have the potential to cause large economic losses. These include standard insurance and reinsurance contracts as well as the creation of contingency funds to build up economic and fiscal resilience in the face of natural hazards.

The aim of these measures is to identify and reduce vulnerability before disasters occur. Risks are identified via mapping, technical studies and participatory workshops. Risk reduction entails financing vulnerability reduction investments and mainstreaming non-structural interventions such as enforceable building codes and land use planning techniques into municipal norms, standards and planning processes.

How is EAP Addressing Disaster Management Issues?  The Urban Unit in the Sustainable Development Department houses a disaster risk management team that coordinates and supports disaster management work across the region. This team sponsors a virtual network of professionals working throughout the region on related issues. This virtual network has been instrumental in identifying key regional priorities where the Bank might be most effective in assisting governments and allows for networking and knowledge sharing with regard to disaster management across country teams.

The region has also begun to identify technical specialists who have experience working on disaster management projects and programs in order to create a callable roster of staff who could provide rapid assistance to country teams and governments of disaster-affected nations. The teams will also assist the Bank in ensuring that their post-disaster project formulation (including reformulation of loans, ERLs, and additional regular lending) is done in an appropriate, timely manner.

The Global Facility for Disaster Reduction and Recovery (GFDRR) was launched in September 2006, and is designed to foster and strengthen global and regional cooperation among various stakeholders under the ISDR system such as low-as well as middle income country governments, international financial institutions, UN agencies, academic institutions, civil society organizations, and the private sector to leverage country systems and programs in ex ante disaster risk reduction.

In EAP, the GFDRR and its donors have allocated about US$7.2 million to support disaster risk reduction and recovery activities at the regional level and in the following priority countries from FY07/FY08 to FY10: Cambodia, Fiji, Indonesia, Kiribati, Marshall Islands, Papua New Guinea, Philippines, Solomon Islands, and Vietnam.