2005 World Disaster Reduction awareness campaign focuses on reducing risk using microfinance tools and safety nets

This year, the theme of the ISDR International Day for Disaster Reduction and campaign aims at increasing disaster resilience using micro-finance and safety nets. Our objective is twofold: to raise   awareness among the social and financial communities and institutions on their potential role in reducing disaster risk, and to raise awareness in the disaster and risk management community on the use of existing financial tools and safety nets to reduce the vulnerability of hazard-prone populations.

Hazards are a major risk for the poor and marginalized, who are already the most vulnerable in society; the destruction of property and livelihoods furthers their downward cycle of poverty. The recent tsunami and earthquakes in the Indian Ocean are a tragic example of disaster vulnerability and how communities can be reduced to extreme poverty in a matter of hours.

Investing in disaster risk reduction reduces the vulnerability of people to hazards and helps break the vicious cycle of poverty.

"The Hyogo Framework for Action 2005-2015: Building the Resilience of Nations and Communities to Disasters" recognises in its priority areas the reduction of the underlying risk factors to build a safer world and identifies a number of measures that will help reduce the impact of hazards on poor populations

The Hyogo Framework for Action recommends to:

  · Strengthen the Implementation of social safety

    net mechanisms to assist the poor and other

    populations affected by disasters.

  · Promote diversified income options for

    populations in high risks areas to reduce their

    vulnerability to hazards.

  · Promote the development of financial risk sharing

    mechanisms particularly insurance and

    reinsurance against disasters.

  · Promote the establishment of public private

    partnerships to better engage the private sector in

   disaster risk reduction activities.

To achieve the Millenium Developments Goals and reduce poverty before 2015, we must find mechanisms that work and actively implement them.

Microcredit has proven its value in many countries as a weapon against poverty and hunger. With access to microcredit, people with low incomes can earn more and better protect themselves against unexpected setbacks and losses. Microcredit and microfinance in general are not yet fully utilized as tools for reducing disaster impacts, but some concrete experiences in India and Bangladesh have shown their potential and highlight the need to further explore these opportunities. The use of microfinance for disaster risk management is still some what experimental, but communities should explore its various flexible approaches and impacts for poverty reduction.

The UN General Assembly designated the year 2005 as the International Year of Microcredit (resolution 53/197), stating that the Year will provide an important opportunity to give impetus to microfinance programmes throughout the world.

The International Year of Microcredit

The UN General Assembly designated the year 2005 as the International   Year of Micro credit (resolution 53/197), stating that the Year   will provide an important opportunity to give impetus to microfinance programmes   throughout the world.

The United Nations Capital Development Fund (UNCDF) and the United Nations Department of Economic and Social Affairs (UNDESA) are coordinating the Year and organizing a series of events throughout the world. For more information about the campaign, please see: http://www.yearofmicrocredit.org

The five key objectives for the Year are designed to unite Member States, UN Agencies and Microfinance Partners. To ultimately achieve the Millennium Development Goals (MDGs), the Year aims to:

   1. Assess and promote the contribution of microfinance and microcredit to the

       MDGs;

   2. Increase public awareness and understanding of microfinance and microcredit    

       as vital parts of the development equation;

   3. Promote inclusive financial sectors;

   4. Support sustainable access to financial services, and

   5. Encourage innovation and new partnerships by promoting and supporting

       strategic partnerships to build and expand the outreach and success of

       microcredit and microfinance.

Within the International Year of Microcredit 2005, the ISDR secretariat and partners would like to stimulate a debate and promote dialogue on how safety nets, micro credit and micro insurance can contribute to disaster risk reduction.

Salvano Briceño, director of the UN/ISDR secretariat

"Investing in disaster risk reduction reduces the vulnerability of people to hazards and helps break the vicious cycle of poverty. We need to engage the

microfinance community into a dialogue on reducing the impact of natural hazards on populations and livelihoods. "

"Microfinance is a successful tool to empower women to help reduce their poverty and therefore, their vulnerability to disasters."

In contributing to the campaign, ISDR will:

  · Encourage partners and experts to review the

    available safety nets to address vulnerability and

    poverty reduction, and look for potential new

    mechanisms that can reduce the impact of hazards.

  · Promote national and local roundtables with micro-

    finance institutions, commercial banks, insurance

    companies, NGOs, CBOs and disaster reduction

    experts.

  · Invite national platforms for disaster reduction and  

    other local and national counterparts to discuss and  

    develop programmes of social and economic safety

    nets for the poor to increase their resilience and

    recovery capacity to disasters.

  · Collect good practice and experiences: you are  

    invited to send us your case studies and

    experiences to be included in our information

    products and media briefs.

  · Invite decision-makers and NGOs involved in

    recovery efforts for the Indian Ocean tsunami and

    earthquakes to develop capacities for long-term

    disaster risk reduction. Please share with us your

    views on how microfinance and safety nets could

    be useful tools in the recovery process.

To broaden the basis of knowledge and innovation, we encourage nominations of candidates with relevant experience and good practice related to microfinance, poverty reduction, safety nets and disaster reduction to apply for the 2005-nomination process of the Sasakawa Award for Disaster Reduction.

The ISDR secretariat, in collaboration with other UN agencies and NGOs working on microfinance, will contribute to the International Year of Microcredit, organising events throughout the world that will culminate with the International day for Disaster Reduction on the 12TH of October 2005.