Facing the Challenge of Natural Disasters in Latin America and the Caribbean: An IDB Action Plan
By Caroline Clarke, Disaster Mitigation and Urban Development Specialist, IDB

In the last 4 years alone, the Inter-American Development Bank has approved $1.5 billion in new financing to help affected countries in the region recover from disasters. This is a ten-fold increase in its average annual disaster-related lending compared to the previous 15 years. Recent events have more than taught us that after-the-fact approaches to address disasters are unsustainable – and that prevention and risk management are central to the development agenda in our region. In the wake of devastating hurricanes, earthquakes, and floods, there is often a call for better emergency preparedness to be ready to respond to the next event. However, to break the destruction-reconstruction-destruction cycle that too many communities suffer, countries and the IDB must put risk management at the forefront of their development agenda.

This is the message that the Bank brought to its Annual Meeting of Governors this March in New Orleans through the Seminar, “Confronting Natural Disasters: A Matter of Development.” For a day and a half, representatives from government ministries and civil society organizations, disaster experts and risk managers, bilateral and multilateral agencies discussed the challenges of promoting development in one of the most hazard-prone regions of the world. IDB president, Enrique Iglesias, stressed the importance of bringing prevention and integrated risk management to the heart of development policies and investments. In the presence of three Heads of State and other dignitaries and experts from the region, he presented the Bank’s Plan of Action for mainstreaming risk management in its operations and actions. The Plan of Action offers a response to government and society demands for improving their ability to confront and combat natural hazards.

The discussions in the plenary and workshops of the seminar underscored a number of common points that will enrich the Bank’s action plan. Among them are the following: factors associated with low level of development in the region – environmental degradation, persistent poverty, uncontrolled urban growth, poor development policies, and weak disaster prevention systems. All of them increase countries’ vulnerability and amplify the consequences of natural hazards. Understanding and addressing the social, environmental, policy and institutional vulnerability is essential. More attention to understanding the needs of potential victims of disasters will help design appropriate incentives for stimulating prevention measures and safety. Better risk information can stimulate mitigation investment in new areas and discourage risky behavior. Throughout the region, national systems for disaster prevention need to be strengthened, with planning and development agencies assuming a more explicit role in risk reduction. National agencies, local governments, private sector and civil society can join forces to establish a common risk reduction strategy.

From the region, there is a clear demand for the Bank to do more. At the presentation of the IDB Plan of Action, Prime Minister Said Musa of Belize argued for a clear national strategy for reducing risk. He underscored that new IDB loans should finance both preparedness investments and institutional strengthening of the disaster management organizations. President Flores of Honduras supported a comprehensive Central American action plan for disaster prevention and mitigation. He also stressed Honduras’s intention to capitalize on its experience with Hurricane Mitch in order to include prevention measures in the reconstruction investments. Prime Minister Owen Arthur of Barbados noted that for the small states, disaster prevention is a matter of life and death. The financial burden due to past and potential disasters may be too great to be carried only by the public sector. Therefore, much more work needs to be done with market instruments – insurance against disasters, and other financial instruments for hedging risk and to pay for reconstruction.

These are all areas the Bank is prepared to help with technical assistance and investment lending. As part of the Action Plan (summarized in Box X), the IDB proposes to put risk management at the forefront of the region’s development agenda. The challenges are two-fold: assisting the countries in adopting comprehensive risk management schemes, and mainstreaming risk management within the Bank’s own operations and actions.
The implementation of this Action Plan is under way. Focal Points for Disaster Management are being established within the Bank and countries interested in operations in this area may contact the Bank directly through the Representations in each borrowing member country (see Box Y for contact information). New projects currently under preparation are incorporating disaster reduction and risk management components. More information is available on the IDB web-page (www.iadb.org). Recent studies on the topic are available from the Bank (to order, contact mariak@iadb.org) and opportunities for regional dialogue are being programmed.

Today the governments of Latin America and the Caribbean are taking important steps toward a more secure future. In the Hemispheric Meeting of the International Decade for Natural Disaster Reduction in Costa Rica in June of 1999, the representatives of the countries in the region made a comprehensive call for the adoption of policies and investments aimed at reducing vulnerability as an integral part of development planning. The Inter-American Development Bank emphasizes the importance of making this call a reality, and pledges to support the countries of the region to meet the challenge.

Copies of “Facing the Challenge of Natural Disasters in Latin America and the Caribbean: An IDB Action Plan” are available directly through the IDB Representations in member countries, as well as directly from the Sustainable Development Department of the IDB in Washington (mariak@iadb.org; fax 202-623-1786).