Developing countries could boost their economies by US$100 billion by investing in disaster resilience, early warning systems, access to personal banking, disaster insurance policies and cash transfer programmes, a new World Bank and Global Facility for Disaster Reduction and Recovery report argues.
The Unbreakable: Building the Resilience of the Poor in the Face of Natural Disasters paper warns that the impact of natural disasters on impoverished populations may have been underestimated by as much as 60 percent, leaving around 26 million people in countries exposed to natural disaster at risk of poverty, with the cost to the global economy estimated at US$520 billion per year.
Jim Yong Kim, president of the World Bank Group, said “severe climate shocks threaten to roll back decades of progress against poverty [as] storms, floods, and droughts [continue to] have dire human and economic consequences”.
Kim added: “Poor people often pay the heaviest price [and] building resilience to disasters not only makes economic sense – it is a moral imperative.”
With climate talks at COP22 in their second week Marrakech, the bank’s report underscores the need for climate-smart policies that protect the world’s most vulnerable populations.
It also shows the positive impact recent efforts to build resilience to extreme weather conditions in vulnerable countries have had. In 2015, a social protection system used in Kenya provided farmers with financial resources to prepare for and mitigate the impacts of severe drought.
Stephane Hallegatte, a lead economist at the Global Facility for Disaster Reduction and Recovery responsible for preparing the report, said that “with risk policies in places that we know to be effective, we have the opportunity to prevent millions of people from falling into poverty”.
After record-breaking floods struck Pakistan in 2010, a rapid-response cash grant programme was also used to stop an estimated 8 million people – the majority of those effected – avoid slipping into poverty.
By measuring disaster damages that highlight the unequal burden of natural disasters on the poor, the report shows that in all of the 117 countries studied lost consumption was found to have a greater impact on well-being of victims than asset losses.