GAR 2015 Main Report

103

Coupled with the limited availability of reserve funds, contingent credit agreements, insurance and access to emergency financing options, the limited investments in reducing existing risk and avoiding the creation of new risk mean that many SIDS in particular are characterized by high risks and low economic resilience. In the Indian Ocean, calculating risk in Madagascar, Mauritius, Comoros and Zanzibar (Figure 5.3) has been a first step in identifying the threshold of loss levels where countries would struggle to finance a recovery. In these countries, losses with return periods of 500 years would require resources equal to 7 to 18 per cent of GDP ( GAR 13 paper

Williges et al., 2014

Williges, Keith, Stefan Hochrainer-Stigler, Junko Mochizuki and Reinhard Mechler. 2014,Modeling the indirect and fiscal risks from natural disasters: Emphasizing resilience and “building back better”, Background Paper prepared for the 2015 Global Assessment Report on Disaster Risk Reduction. Geneva, Switzerland: UNISDR..
Click here to view this GAR paper.

Countries with large budget deficits are usually unable to divert funding from revenues to absorb disaster losses and therefore need to use other mechanisms, including taxation, national and international credit, foreign reserves, domestic bonds, aid and risk financing instruments. Using all these financing mechanisms, Mauritius would still face a resource gap for any losses from

cyclone wind and earthquake with a return period of 62 years or over (Figure 5.4). The corresponding return period is only 24 years for Madagascar and 28 years for Comoros (Mochizuki et al., 2014

Mochizuki, Junko, Stefan Hochrainer, Keith Wil-liges and Reinhard Mechler. 2014,Fiscal and Economic Risk of Natural Disasters in Comoros, Mauritius, Seychelles and Zanzibar, CATSIM Assessment (Preliminary Result). Risk Policy and Vulnerability Program, International Institute for Applied Systems Analysis (IIASA).. .

A limited ability to absorb losses can increase the indirect economic costs of a disaster and can slow recovery (UNISDR, 2013a

UNISDR. 2013a,Global Assessment Report on Disaster Risk Reduction: From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction, Geneva, Switzerland: UNISDR.. .

). For example, disruptions in the transport sector due to post-disaster reconstruction delays can impact on a range of other sectors, such as manufacturing and retail trade. However, access to ex-ante financing arrangements can prevent this problem ( GAR 13 paper

Williges et al., 2014

). For example, assuming that post-disaster reconstruction financing were available in Cambodia 6 months to 1 year after a disaster,3 access to ex-ante financing, such as contingent credit to facilitate more rapid recovery, would help stem the decline in economic output across a range of sectors, ranging from more than US$1 million in retail trade to almost US$6 million in the transport sector and US$7.5 million in manufacturing (ibid.).

(Source: UNISDR with data from CIMNE.)

Figure 5.3 Disaster risk in Zanzibar, Mauritius, Madagascar, and Comoros

	103 Coupled with the limited availability of reserve funds, contingent credit agreements, insurance and access to emergency financing options, the limited investments in reducing existing risk and avoiding the creation of new risk mean that many SIDS in particular are characterized by high risks and low economic resilience. In the Indian Ocean, calculating risk in Madagascar, Mauritius, Comoros and Zanzibar (Figure 5.3) has been a first step in identifying the threshold of loss levels where countries would struggle to finance a recovery. In these countries, losses with return periods of 500 years would require resources equal to 7 to 18 per cent of GDP (Williges et al., 2014 x Williges, Keith, Stefan Hochrainer-Stigler, Junko Mochizuki and Reinhard Mechler. 2014,Modeling the indirect and fiscal risks from natural disasters: Emphasizing resilience and “building back better”, Background Paper prepared for the 2015 Global Assessment Report on Disaster Risk Reduction. Geneva, Switzerland: UNISDR.. Click here to view this GAR paper. ). Countries with large budget deficits are usually unable to divert funding from revenues to absorb disaster losses and therefore need to use other mechanisms, including taxation, national and international credit, foreign reserves, domestic bonds, aid and risk financing instruments. Using all these financing mechanisms, Mauritius would still face a resource gap for any losses from cyclone wind and earthquake with a return period of 62 years or over (Figure 5.4). The corresponding return period is only 24 years for Madagascar and 28 years for Comoros (Mochizuki et al., 2014 x Mochizuki, Junko, Stefan Hochrainer, Keith Wil-liges and Reinhard Mechler. 2014,Fiscal and Economic Risk of Natural Disasters in Comoros, Mauritius, Seychelles and Zanzibar, CATSIM Assessment (Preliminary Result). Risk Policy and Vulnerability Program, International Institute for Applied Systems Analysis (IIASA).. . ). A limited ability to absorb losses can increase the indirect economic costs of a disaster and can slow recovery (UNISDR, 2013a x UNISDR. 2013a,Global Assessment Report on Disaster Risk Reduction: From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction, Geneva, Switzerland: UNISDR.. . ). For example, disruptions in the transport sector due to post-disaster reconstruction delays can impact on a range of other sectors, such as manufacturing and retail trade. However, access to ex-ante financing arrangements can prevent this problem (Williges et al., 2014 x Williges, Keith, Stefan Hochrainer-Stigler, Junko Mochizuki and Reinhard Mechler. 2014,Modeling the indirect and fiscal risks from natural disasters: Emphasizing resilience and “building back better”, Background Paper prepared for the 2015 Global Assessment Report on Disaster Risk Reduction. Geneva, Switzerland: UNISDR.. Click here to view this GAR paper. ). For example, assuming that post-disaster reconstruction financing were available in Cambodia 6 months to 1 year after a disaster,3 access to ex-ante financing, such as contingent credit to facilitate more rapid recovery, would help stem the decline in economic output across a range of sectors, ranging from more than US$1 million in retail trade to almost US$6 million in the transport sector and US$7.5 million in manufacturing (ibid.). (Source: UNISDR with data from CIMNE.) Figure 5.3 Disaster risk in Zanzibar, Mauritius, Madagascar, and Comoros	Page 1 Page 10 Page 20 Page 30 Page 40 Page 50 Page 60 Page 70 Page 80 Page 90 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 ->Page 105 Page 106 Page 107 Page 108 Page 109 Page 110 Page 111 Page 112 Page 113 Page 114 Page 115 Page 116 Page 117 Page 120 Page 130 Page 140 Page 150 Page 160 Page 170 Page 180 Page 190 Page 200 Page 210 Page 220 Page 230 Page 240 Page 250 Page 260 Page 270 Page 280 Page 290 Page 300 Page 310