Promoting Better Understanding on Sustainable Disaster Risk Management Strategies

Abstract

Over the past 20 years, natural disaster losses have been steadily climbing in both advanced and developing countries. Disaster-related economic losses exceeded US$400 bn in 2011 worldwide, the highest ever recorded in history. The Great East Japan Earthquake alone resulted in more than US$210 bn in damages. Insured losses of over US$55 bn (out of US$177 bn total natural disaster losses) made 2012 the third most expensive year on record for the insurance industry. The upward trend in natural disaster losses is exacerbated by growing urbanisation, environmental degradation and expected increases in the frequency and severity of hydro-meteorological events. Developing countries are particularly vulnerable, as their regulatory systems often cannot keep pace with the rapidly growing asset bases at risk and do not have adequate resources to dedicate to reducing exposure or to effectively respond to an emergency. There is an urgent need for governments to better understand, manage and reduce the financial and fiscal impacts of natural disasters. Many governments are increasingly recognising the need for comprehensive disaster risk management strategies, including robust disaster risk financing strategies, to achieve sustainable development. In parallel to the increasing attention to disaster risk management, the international community has been working to shift the paradigm of disaster mitigation from response to prevention. The World Bank has developed an integrated, long-term approach to supporting proactive risk reduction and climate change adaptation in developing countries. In 2006, a consortium of governments together with the World Bank established the Global Facility for Disaster Reduction and Recovery (GFDRR) to better channel global support towards mainstreaming disaster risk management integrated into national development planning. The World Bank/GFDRR helps governments institutionalise sustainable and cost-effective disaster risk financing strategies, within the overall disaster risk management framework, to increase financial resilience to natural disasters through four key pillars: sovereign disaster risk financing, property