Three devastating natural disasters struck countries bordering the Indian Ocean within a year: the December 2004 tsunami with its epicenter off the Indonesian coast, the October 2005 earthquake in northern Pakistan, and the May 2006 Yogyakarta earthquake in Indonesia. The Bank was closely involved in damage and loss assessments following all three events and has been supporting reconstruction efforts in affected countries.

In Indonesia, the country hardest hit by the tsunami, the Bank is the trustee of the Indonesia Multi-Donor Fund for Aceh and Nias, with grant pledges of $526 million from 15 donors. The Bank is supervising 6 of the fund’s 12 projects, which provide assistance for housing, roads, water supply, health, livelihood support, and capacity building in housing reconstruction as well as coastal management and project implementation. Indonesia also received a $25 million grant from IBRD’s surplus. An additional $39 million in IDA financing for recovery and peace building in Aceh was also allocated. For South Asian countries affected by the tsunami, the Bank has committed more than $835 million to reconstruction.

The October 2005 earthquake killed some 73,000 people, primarily in northern Pakistan. Parts of India and Afghanistan were also affected. Just two weeks after the tragedy, the Bank provided $470 million to support reconstruction and safeguard ongoing reform and poverty reduction programs. In December, an additional $400 million was approved. In all, the Bank has pledged $1 billion for earthquake recovery, mostly in the form of IDA credits. Since 1984, Bank lending for natural disasters has totaled more than $26 billion. A recent Independent Evaluation Group (IEG) evaluation, Hazards of Nature, Risks to Development, points out that these events should be seen as risk factors in development rather than interruptions to it. The evaluation concluded that the Bank needs to factor natural disasters into project and country program design and develop more effective financing mechanisms for emergency assistance.

Besides its work in response to natural disasters, the Bank supported some 35 countries affected by violent conflict. Such support targets the reintegration of ex-combatants into society, reconstruction of infrastructure, rebuilding institutional capacity and governance, and establishing community-driven development. Where regular Bank assistance is not possible, a Post-Conflict Fund provides flexible and innovative grants to countries (13 currently), in addition to regional and global grants. The fund has made 166 grants totaling $83 million since 1998.