Results in resilience: Enhancing institutional capacities for a more comprehensive and inclusive DRM in Panama

Panama is highly exposed to a variety of shocks, including earthquakes, tsunamis, epidemics, wildfires, landslides, and urban riverine and coastal floods. These catastrophic events are increasing in severity due to climate change, and they affect Panama’s economy and its capacity to finance disaster preparedness and response. This particularly impacts the poor and vulnerable, who have very limited capacity to cope with the loss of housing, livelihoods, and access to basic services.

In response to these increasing threats, Panama has steadily shifted its focus from a centralized disaster response approach toward more comprehensive and inclusive disaster risk management (DRM) by integrating disaster risk reduction (DRR) in its development and planning policies. Since 2010, after more than 10 years of engagement with the World Bank, Panama has consolidated policy and institutional reform processes. Through support from two Development Policy Loans (DPL) with a Catastrophe Deferred Drawdown Option (Cat DDO), it continues to enhance better governance conditions, filling the existing gaps of high-level political decision-making capacity and comprehensive DRM coordination, reorganizing and strengthening National Civil Protection System (SINAPROC) and its operational capacity, and ensuring its DRM emergency response and recovery efforts are best informed.

An important law reform enacted in 2005 provided SINAPROC with the authority to coordinate measures implemented by multiple agencies to prevent, reduce, and respond to the impacts of climate- and multi-hazard-induced disasters. In 2010, in alignment with the Central American Policy on Comprehensive Disaster Risk Management (PCGIR), Panama approved its Comprehensive Disaster Risk Management National Policy (PNGIRD). This clarified the DRM responsibilities of line ministries and provided a legal framework for the Ministry of Economy and Finance, including the creation of a Directorate of Investment, Concessions and Risks in 2011; the development of a comprehensive Disaster Risk Financing (DRF) Strategy framework and implementation plan; and the diversification of DRF instruments.

Building on PNGIRD, the World Bank financed the first $66 million Cat DDO in Panama, in 2012. In addition to providing contingency financing, it focused on increasing the country’s technical and institutional DRM capacity by implementing DRM priority actions by relevant line ministries and government agencies and adopting a framework for the financial management of disaster risk. All these measures have made Panama the first country to approve and adopt a DRF strategy (2014) and a five-year implementation plan (2016–2020). Panama also has a layered strategy that includes contingency financing, insurance products, and a national emergency fund.

In 2022, a second $100 million DPL with Cat DDO was approved to enhance Panama’s technical and institutional capacity to manage the disaster risk from natural and health-related hazards. It builds on the consolidation of the policy and institutional reform process in which the government has engaged since 2010.

GFDRR’s support aimed to enhance the development impacts of the operation by providing technical assistance to the government to ensure the policy reforms included gender equality considerations and risk-informed territorial development. Activities to identify best international practices to embed in simulation exercises will be conducted to test protocols to address disasters linked to floods, earthquakes, and pandemics. GFDRR supported the creation of a National Hydrometeorological Service (NMHS) Institute, which is expected to provide reliable, time-sensitive hydromet data and information, to improve the effectiveness of the agencies for DRR and climate change adaptation (CCA), and inform the government’s investment planning process. Additionally, it is supporting the Ministry of Finance’s Directorate for Territorial Development in prioritizing the country’s most vulnerable provinces for implementing capacity-building activities and transferring knowledge in developing risk-informed territorial development plans.

GFDRR will also support the implementation of the Career Law, focusing on bridging gender gaps within the Civil Protection System. This law will enable SINAPROC to certify qualified civil protection professionals and promote an agenda that bridges existing gender gaps in the civil protection and DRM system by substantially increasing women’s participation in the organization, including in disaster response and recovery operations.

Lessons Learned

Comprehensive and inclusive DRM requires integrating DRR into development and planning policies, supporting the poorest and most vulnerable, and ensuring gender-equitable participation in disaster prevention and recovery. Developing a DRF Strategy framework is key for financial protection against disasters triggered by natural hazards and other shocks; it will allow the country to maintain a sound national fiscal position, develop cost-effective and accessible financing mechanisms for immediate liquidity that can be rapidly channeled to priority institutions and sectors, and reduce the impact of disasters at the individual, community and national levels.