GAR 2015 Main Report

169

insurance16 in place and that can rapidly buffer losses will recover far more quickly than those that do not. Such mechanisms may include insurance and reinsurance, catastrophe funds, contingency financing arrangements with multilateral finance institutions and market-based solutions such as catastrophe bonds (UNISDR, 2011a

UNISDR. 2011a,Global Assessment Report on Disaster Risk Reduction: Revealing Risk, Redefining Development, Geneva, Switzerland: UNISDR.. .

and 2013a). However, as the HFA draws to close, and as highlighted in Chapter 5, a financing gap remains in many low and middle-income countries, even when faced with less intensive disasters.

Financing recovery

Lack of finance is often cited as an obstacle to building back better (UNISDR, 2013b

UNISDR. 2013b,Implementation of the Hyogo Framework for Action, Summary of Reports 2007-2013. Geneva, Switzerland: UNISDR.. .

;

GFDRR, 2014c

GFDRR (Global Facility for Disaster Reduction and Recovery). 2014c,Resilient Recovery: An Imperative for Resilient Development, Background Paper prepared for the 2015 Global Assessment Report on Disaster Risk Reduction. Geneva, Switzerland: UNISDR..
Click here to view this GAR paper.

). Roughly a third of self-assessment reports submitted using the HFA Monitor list financing as the primary limitation to the integration of disaster reduction into recovery and reconstruction. However, as highlighted in GAR11, building back better normally has a very attractive benefit-cost ratio. It not only reduces future risk levels,

but also contributes to reducing the financing gap that countries would face to buffer future losses ( 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.

). In other words, it can increase a country’s economic and fiscal resilience and enable it to absorb losses from events with longer return periods. For example, Ecuador could shift the return period for a loss event in which it would experience a resource gap by more than 50 years (Figure 8.5). Similarly, by moving to a building back better approach, Pakistan would be able to shift a resource gap of more than US$3 billion for a 1-in-100 year loss event (see Figure 5.2 in Chapter 5) to a 1 in 143-157 year event..

At the same time, risk financing mechanisms are normally designed to protect public finances from intensive events. Often no protection is in place in the case of the multiple extensive disasters responsible for the vast majority of damage to housing, agriculture and local infrastructure. Therefore, while governments and large business can use insurance to protect themselves,

Box 8.9 Recovery in Chile and Haiti

In early 2010, two earthquakes of exceptionally high magnitude hit Haiti and Chile within two months of each other. The 7.0 magnitude earthquake in Haiti left the capital Port-au-Prince in ruins. Some 222,570 people were killed and the economy devastated. The 8.8 magnitude earthquake in Chile also caused major damage, although only 562 people were killed.

The narrative of each disaster, however, was completely different. Low mortality in Chile reflected a long history of enforced seismic building codes. In contrast, the last major earthquake in Haiti was in 1842, and disaster risk reduction efforts were focused on recurrent hurricanes rather than earthquakes. At US$30 billion, direct economic losses in Chile were around four times greater than those in Haiti, estimated at US$7.8 million, contrasting the value of exposed assets in one of the highest-income countries13 and in the lowestincome country in the Americas. However, whereas in Chile these losses represented only 15 per cent of the country’s GDP (CEPAL, 2010

CEPAL (Comisión Económica para América Latina y el Caribe). 2010,Terremoto en Chile: Una primera mirada al 10 de marzo de 2010. .

), the much lower losses in Haiti equalled 120 per cent of the country’s GDP from 2009.14

With most of its economy unaffected, high quality of governance15 and experience in managing earthquake disasters, Chile recovered relatively quickly. In contrast, five years after the disaster, with its economy devastated, weak governance and no recent experience in managing earthquake events, Haiti has been challenged to recover at all. Efforts to build back better quickly fell apart ( GAR 13 paper

GFDRR, 2014c

). These two narratives highlight how the potential for recovering quickly and in a way that prevents the generation of new risks is influenced by the level of economic development and quality of governance in a country.

	169 insurance16 in place and that can rapidly buffer losses will recover far more quickly than those that do not. Such mechanisms may include insurance and reinsurance, catastrophe funds, contingency financing arrangements with multilateral finance institutions and market-based solutions such as catastrophe bonds (UNISDR, 2011a x UNISDR. 2011a,Global Assessment Report on Disaster Risk Reduction: Revealing Risk, Redefining Development, Geneva, Switzerland: UNISDR.. . and 2013a). However, as the HFA draws to close, and as highlighted in Chapter 5, a financing gap remains in many low and middle-income countries, even when faced with less intensive disasters. Financing recovery Lack of finance is often cited as an obstacle to building back better (UNISDR, 2013b x UNISDR. 2013b,Implementation of the Hyogo Framework for Action, Summary of Reports 2007-2013. Geneva, Switzerland: UNISDR.. . ; GFDRR, 2014c x GFDRR (Global Facility for Disaster Reduction and Recovery). 2014c,Resilient Recovery: An Imperative for Resilient Development, Background Paper prepared for the 2015 Global Assessment Report on Disaster Risk Reduction. Geneva, Switzerland: UNISDR.. Click here to view this GAR paper. ). Roughly a third of self-assessment reports submitted using the HFA Monitor list financing as the primary limitation to the integration of disaster reduction into recovery and reconstruction. However, as highlighted in GAR11, building back better normally has a very attractive benefit-cost ratio. It not only reduces future risk levels, but also contributes to reducing the financing gap that countries would face to buffer future losses (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. ). In other words, it can increase a country’s economic and fiscal resilience and enable it to absorb losses from events with longer return periods. For example, Ecuador could shift the return period for a loss event in which it would experience a resource gap by more than 50 years (Figure 8.5). Similarly, by moving to a building back better approach, Pakistan would be able to shift a resource gap of more than US$3 billion for a 1-in-100 year loss event (see Figure 5.2 in Chapter 5) to a 1 in 143-157 year event.. At the same time, risk financing mechanisms are normally designed to protect public finances from intensive events. Often no protection is in place in the case of the multiple extensive disasters responsible for the vast majority of damage to housing, agriculture and local infrastructure. Therefore, while governments and large business can use insurance to protect themselves, Box 8.9 Recovery in Chile and Haiti In early 2010, two earthquakes of exceptionally high magnitude hit Haiti and Chile within two months of each other. The 7.0 magnitude earthquake in Haiti left the capital Port-au-Prince in ruins. Some 222,570 people were killed and the economy devastated. The 8.8 magnitude earthquake in Chile also caused major damage, although only 562 people were killed. The narrative of each disaster, however, was completely different. Low mortality in Chile reflected a long history of enforced seismic building codes. In contrast, the last major earthquake in Haiti was in 1842, and disaster risk reduction efforts were focused on recurrent hurricanes rather than earthquakes. At US$30 billion, direct economic losses in Chile were around four times greater than those in Haiti, estimated at US$7.8 million, contrasting the value of exposed assets in one of the highest-income countries13 and in the lowestincome country in the Americas. However, whereas in Chile these losses represented only 15 per cent of the country’s GDP (CEPAL, 2010 x CEPAL (Comisión Económica para América Latina y el Caribe). 2010,Terremoto en Chile: Una primera mirada al 10 de marzo de 2010. . ), the much lower losses in Haiti equalled 120 per cent of the country’s GDP from 2009.14 With most of its economy unaffected, high quality of governance15 and experience in managing earthquake disasters, Chile recovered relatively quickly. In contrast, five years after the disaster, with its economy devastated, weak governance and no recent experience in managing earthquake events, Haiti has been challenged to recover at all. Efforts to build back better quickly fell apart (GFDRR, 2014c x GFDRR (Global Facility for Disaster Reduction and Recovery). 2014c,Resilient Recovery: An Imperative for Resilient Development, Background Paper prepared for the 2015 Global Assessment Report on Disaster Risk Reduction. Geneva, Switzerland: UNISDR.. Click here to view this GAR paper. ). These two narratives highlight how the potential for recovering quickly and in a way that prevents the generation of new risks is influenced by the level of economic development and quality of governance in a country.	Page 1 Page 10 Page 20 Page 30 Page 40 Page 50 Page 60 Page 70 Page 80 Page 90 Page 100 Page 110 Page 120 Page 130 Page 140 Page 150 Page 159 Page 160 Page 161 Page 162 Page 163 Page 164 Page 165 Page 166 Page 167 Page 168 Page 169 Page 170 ->Page 171 Page 172 Page 173 Page 174 Page 175 Page 176 Page 177 Page 178 Page 179 Page 180 Page 181 Page 182 Page 183 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