Back to basics: why investing in disaster risk management is crucial for global development

On May 8th, 1947, the World Bank approved its first loan of $250 million (about $3.5 billion in 2025 dollars) to the French government to help reconstruct its economy after the destruction wrought by the Second World War.

"The entire emphasis of the Bank at that time was on the problem of reconstruction. Very little was thought of the developmental side of things.”

Martin Rosen, Assistant Director of the Department of Operations for Europe, Africa, and Australasia, World Bank (Interview, 1961)

Seventy-eight years later, the World Bank is still helping countries to rebuild and recover from disasters. And over that time, our mission has expanded—from a unique focus on post-conflict reconstruction to an integrated approach combining long-term development with disaster preparedness.

Here's how the World Bank is getting back to basics by scaling up our investments in disaster risk management—and why that's crucial for global development.

The World Bank’s role in resilience

Championing a more resilient future

The World Bank is the world’s leading source of financing, knowledge, and support for disaster risk management.

Between 2010 and 2020, the World Bank tripled our disaster risk reduction efforts, strongly supported by our trust fund, the Global Facility for Disaster Reduction and Recovery (GFDRR). Today, we invest around $7.5 billion each year in disaster risk management.

Our disaster risk management portfolio delivers real value: resilient infrastructure investments can generate a $4 return on each dollar invested. These efforts also support safer cities, stronger emergency systems, year-round access to jobs and markets, and risk-informed planning. And flexible financing instruments—including those offered through the International Development Association (IDA)—ensure that even the most vulnerable countries can act before disasters strike.

From strengthening flood defenses and early warning systems to improving emergency response and building safer infrastructure, the World Bank helps countries anticipate shocks and bounce back more effectively. In addition to projects that build communities' resilience, we provide technical advice, operational guidance, and financial tools tailored to national priorities.

The Triple Dividend of Resilience

Disaster risk management pays dividends. Below are three of the biggest benefits of investing in resilience.

The benefits of protection

Preparedness saves lives. In Poland, flood protection measures helped prevent widespread flooding in 2024. In Japan, strong building codes and early warning systems have long protected millions.

Even smaller, more frequent shocks can slow down economic progress. In Kinshasa, flooding and landslides during the rainy season costs the economy $1.2 million a day due to delays and disruptions. In Tanzania, indirect losses from disrupted electricity and transport due to floods exceed $250 million annually.

At the heart of prevention is resilient infrastructure. When roads stay open, hospitals remain functional, and water systems continue to operate during droughts, the impacts of disasters are far less severe. From drainage systems to reinforced schools and clinics, these investments protect both people and services they rely on.

They don’t just absorb shocks —they keep communities connected, reduce recovery time, and protect what matters most.

The benefits of confidence

Disasters undermine confidence. When risks aren’t addressed, people and businesses hesitate to invest in homes, equipment, or long-term investment plans. But when countries show they are prepared, the picture changes.

Confidence grows when resilience is built into how countries plan, build, and govern. Strong institutions, stable infrastructure and service delivery systems, and clear land use policies help reduce risk—and reassure investors.

In Dar es Salaam, flood-prone properties are worth 30% less than those in safer areas. In Buenos Aires, flood protection has raised land values enough to offset infrastructure costs. In the Caribbean, tourism developers are more likely to invest when disaster risks are actively managed.

Investment projects that build resilience also create jobs. In Tanzania, 10,000 jobs are expected to be created through a transport project in Dodoma by 2030, and 2,000 jobs are expected to be created by 2027 through Msimbazi Basin Development Project.

Resilience also makes cities more livable. Green infrastructure, better drainage, and accessible public spaces not only reduce disaster impacts: they improve quality of life. Cities that are safer, cleaner, and easier to move through attract talent, boost productivity, and support long-term growth.

The same holds true in fragile and conflict-affected settings. In places with weak institutions and recurring shocks, even small disasters can set back years of progress. Yet when governments invest in risk reduction, through early warning systems, community preparedness, and inclusive governance, they help restore trust, reduce vulnerability, and lay the groundwork for recovery.

Resilience creates the confidence people and economies need to grow.

The benefits of preparedness

Preparedness is more than a plan. It’s what allows countries to save lives, protect services, and respond with speed and clarity. Early warning systems, reliable logistics, and trained emergency responders all help reduce the toll of disasters. But being ready also means having the right policies and resources in place before a crisis begins.

The World Bank works with countries to improve coordination, update institutional frameworks, and make emergency systems more effective.

Planning ahead to act fast

When disaster strikes, every hour matters. Countries that plan ahead and have funding ready can act faster, avoid delays and reduce long-term damage.

The World Bank helps countries access flexible tools from its Crisis Preparedness and Response Toolkit, including:

• Emergency financing that releases funds immediately after a disaster;
• Flexible budgets that allow funds to be shifted quickly;
• Insurance products that trigger payouts without adding debt;
• Debt pause clauses that let countries redirect payments during emergencies.

More than 65 countries are now using these tools to stay ahead of crisis. In response to the emergency declared due to the impact of Tropical Storm Sara in Honduras in November 2024, the World Bank, through its new Rapid Response Option under the toolkit, disbursed $50.8 million to the Ministry of Finance of Honduras to support the response efforts.

Keeping health systems working when it matters most

Hospitals and clinics often feel the shock of disasters first. Whether it’s a flood, heatwave, or disease outbreak, health services must continue to operate. In fragile settings, where systems are already strained, this becomes even more urgent.

The World Bank helps countries strengthen health systems through better infrastructure and emergency continuity planning. Keeping health services going during crises saves lives and helps maintain public trust.

Nature-based solutions for safer communities

The environment plays a vital role in preparedness. Trees, wetlands, and green spaces reduce urban flooding, cool overheated cities, and protect against extreme weather.

In Viet Nam, mangrove forests buffer coastal communities from storms. In Bangladesh, reforested embankments help manage floodwaters and reduce disease risks. These solutions not only reduce hazards—they also support livelihoods and biodiversity, improve public health, and create local jobs.

Results in Resilience

• In Romania, World Bank support helped reconstruct and upgrade fire stations in five municipalities to meet seismic and building codes, enabling more than 600 emergency personnel to provide fire services for more than 920,000 people. Learn more
• In Honduras, World Bank financial and technical assistance enabled the construction of 37 disaster-resilient, accessible schools in vulnerable communities, with 30 additional schools under construction. Learn more
• In Tonga, World Bank emergency financing of $8 million supported urgent humanitarian relief, cleanup, and infrastructure rehabilitation following the January 2022 volcanic eruption and tsunami. Learn more
• In Mozambique, World Bank support enabled the creation of an urban green park along the Chiveve River in Beira—restoring mangroves and native flora to improve stormwater drainage and retention—to protect an estimated 50,000 residents from flooding, including during Cyclone Idai. Learn more

Innovation for action

The future of disaster risk management

Digital tools are playing a bigger role in disaster preparedness and response. AI-powered risk models, drone-based damage assessments, and satellite monitoring are helping governments detect, prepare for, and respond to disasters in real time. Open-source platforms and predictive analytics are making risk more transparent and response more targeted.

The World Bank is at the forefront, using cutting-edge technology and analytics expertise to enhance resilience. One such tool is the Global Rapid Post-Disaster Damage Estimation (GRADE) approach, which provides swift, sector-specific assessments of disaster impacts. GRADE has been instrumental in informing recovery efforts, such as after the 2023 Türkiye-Syria earthquake.

The World Bank also supports efforts to tackle urban heat across regions such as East Asia and the Pacific and South Asia, and in countries like Albania, Bosnia and Herzegovina, and South Africa, as well as in cities like Bangkok. The heat mapping exercises combine satellite data with community input to identify heat-prone areas, guiding interventions like urban greening and infrastructure improvements.

Furthermore, through the Digital Earth Partnership, the World Bank and GFDRR collaborate with the European Space Agency to harness Earth observation technologies. This partnership aids countries in accessing real-time data for risk assessment and decision-making.

These tools support policymakers to make faster and more informed decisions, better target aid, and plan in a more inclusive manner. The World Bank is helping countries adopt innovations that make disaster risk management more effective and accessible.

By investing in resilience, countries can:

• Safeguard livelihoods
• Create employment
• Build inclusive, stable economies.

Because in today’s world, resilience isn’t optional. It’s essential for global development and job creation.