Publication: Mitigating the Adverse Financial Effects of Natural Hazards on the Economies of South Eastern Europe: A Study of Disaster Risk Financing Options
Loading...
Date
2008-02
ISSN
Published
2008-02
Author(s)
Editor(s)
Abstract
Over the last few decades, the frequency of major disasters caused by the impact of natural hazards has increased significantly, causing an increase in losses, both total economic and insured. This considerable increase can be fully attributed to weather-related events, which are inherently linked to climate change. The European Union (EU) community, and particularly the countries of South Eastern Europe (SEE), is prone to natural hazards such as earthquakes, floods and forest fires. In the SEE countries, the adverse effects of natural calamities, most of which can be assigned to climate change, are already being felt in many sectors of economy and at the macro level. The main objectives of this study have been two-fold. On the one hand, the study has attempted to establish the extent of financial vulnerability of governments and households to natural hazards in ten countries of South Eastern Europe. On the other hand, the study aims to outline a range of practical solutions and policy recommendations for the problem of the growing financial exposure from disasters caused by the impact of natural hazards for governments, businesses and individuals.This study is intended for four principal audiences: government officials in SEE countries; World Bank staff involved in disaster risk financing and reconstruction projects; the international development community; and the private insurance and reinsurance industry. The structure of the report is as follows: Chapter I is an Introduction. Chapter II reviews the EU regional financial safety net mechanisms that can be mobilized in case of major disasters caused by the impact of natural hazards, focusing mainly on the EU Solidarity Fund. Chapter III examines the fiscal capacity of SEE countries to cope on their own with large disaster events. Chapter IV reviews the existing diverse experience in covering the losses from disasters caused by the impact of natural hazards in disaster risk insurance in France, Spain and Germany. Chapter V presents an overview of the state of disaster insurance markets in SEE countries. Chapter VI presents the main findings and policy recommendations.
Link to Data Set
Citation
“Gurenko, Eugene N.; Zakout, Wael. 2008. Mitigating the Adverse Financial Effects of Natural Hazards on the Economies of South Eastern Europe: A Study of Disaster Risk Financing Options. © World Bank. http://hdl.handle.net/10986/26564 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Citations
Collections
Related items
Showing items related by metadata.
Publication Review of Public and Private Disaster Risk Financing Mechanisms in Central Europe(World Bank, Washington, DC, 2009-08-08)This study comprises a review of government post-disaster safety nets as well as those provided by the private insurance market in four countries of Central Europe, namely the Czech Republic, Hungary, Poland, and Slovakia. The study attempts to establish the extent of financial vulnerability of governments and households to natural hazards in four countries of Central Europe by examining: 1) the fiscal policy of four Central European countries in the areas of post-disaster relief and reconstruction; and 2) the extent of catastrophe insurance coverage provided by the private insurance industry in the region as well as the technical capacity of national insurance markets to manage catastrophe insurance risk. The study is intended for four principal audiences: government officials in Central European countries; World Bank staff involved in disaster risk financing and reconstruction projects; the international development community as well as the private insurance and reinsurance industry. This report was prepared based on a series of written surveys followed by interviews with key government officials, government experts and insurers in four countries of the study. The field work has been supplemented by a review of the pertinent literature. The structure of the report is as follows. chapter one reviews the level of catastrophe insurance penetration in the four countries of Central Europe. It also provides an overview of fiscal policies and mechanisms currently in place for dealing with national emergencies. Chapter two presents the main findings and policy recommendations of the study.Publication Rapid Onset Natural Disasters: The Role of Financing in Effective Risk Management(World Bank, Washington, D.C., 2004-04)The authors provide a conceptual framework for designing a comprehensive risk management strategy for rapid onset natural disasters at the country level, with a particular emphasis on the role of catastrophe loss funding. The authors discuss the key policy and technical issues involved in building financially sustainable catastrophe risk transfer and funding programs in disaster prone countries and their links to risk mitigation. They also deal with the cognitive and political economy issues that are likely to arise and ways to accommodate them.Publication The Macro Financing of Natural Hazards in Developing Countries(World Bank, Washington, DC, 2006-12)The authors propose a financial model to address the design of efficient risk financing strategies against natural disasters at the country level. It is simple enough to shed analytical light on some of the key issues but flexible and realistic enough to provide some quantitative guidance on the ex ante financing of catastrophic losses. The risk financing problem is decomposed into two steps. First, the resource gap, defined as the difference between losses and available ex-post resources (such as post-disaster aid), is identified. It determines the losses to be financed by ex ante financial instruments (reserves, catastrophe insurance, and contingent debt). Second, the cost-minimizing financial arrangements are derived from the marginal costs of the financial instruments. The model is solved through a series of graphical analyses that make this complex financial problem easier to apprehend. This model captures and explains the main impacts of financial parameters (such as insurance premium, cost of capital) on efficient risk financing structures.Publication Assessing the Financial Vulnerability to Climate-Related Natural Hazards(2010-03-01)National governments are key actors in managing the impacts of extreme weather events, yet many highly exposed developing countries -- faced with exhausted tax bases, high levels of indebtedness, and limited donor assistance -- have been unable to raise sufficient and timely capital to replace or repair damaged infrastructure and restore livelihoods after major disasters. Such financial vulnerability hampers development and exacerbates poverty. Based on the record of the past 30 years, this paper finds many developing countries, in particular small island states, to be highly financially vulnerable, and experiencing a resource gap (net disaster losses exceed all available financing sources) for events that occur with a probability of 2 percent or higher. This has three main implications. First, efforts to reduce risk need to be ramped-up to lessen the serious human and financial burdens. Second, contrary to the well-known Arrow-Lind theorem, there is a case for country risk aversion implying that disaster risks faced by some governments cannot be absorbed without major difficulty. Risk aversion entails the ex ante financing of losses and relief expenditure through calamity funds, regional insurance pools, or contingent credit arrangements. Third, financially vulnerable (and generally poor) countries are unlikely to be able to implement pre-disaster risk financing instruments themselves, and thus require technical and financial assistance from the donor community. The cost estimates of financial vulnerability -- based on today's climate -- inform the design of "climate insurance funds" to absorb high levels of sovereign risk and are found to be in the lower billions of dollars annually, which represents a baseline for the incremental costs arising from future climate change.Publication Preparing to Manage Natural Hazards and Climate Change Risks in Dakar, Senegal : A Spatial and Institutional Approach(World Bank, Washington, DC, 2009-06-30)This report describes a pilot study of natural risk hazards in the peri-urban extension areas of the Dakar Metropolitan Area, Senegal. The area subject of this study stretches across 580 square kilometers, covering less than 1 percent of the national territory, but housing about 50 percent of Senegal's urban population. Much of the rapid population growth of the Dakar Metropolitan Area is taking place beyond the boundaries of the Department of Dakar (the city center), in peri-urban areas that combine two disquieting features: they present significant vulnerability to some natural hazards, and they have unclear administrative and governance arrangements, often being out of the direct oversight of established urban and rural local governments. Situations like this are not unusual in developing countries, and call for more systematic attention to hazard risk management in peri-urban areas, including a better understanding and awareness of the nature of the hazards that they face as well as of the institutional capacities and measures that would be necessary to manage them better. The objective of this pilot study is, therefore, two-pronged. First, the study intends to propose a new methodology for quick assessment of natural hazard risks at a metropolitan region scale, using new tools of spatial analysis based on geographic information systems (GIS) data. Second, the study aims to apply the principles and diagnostic questionnaire of the climate change city primer developed by the East Asia region of the World Bank to get a comprehensive view of the institutional framework for climate change-related hazard risk management existing in the city at this time. Bringing the spatial and the institutional analyses together, the study proposes and starts to develop a number of dissemination and awareness-raising tools that can help to inform different stakeholders about the general parameters of the natural hazard risks facing the Dakar Metropolitan area. The pilot study concludes with a broad action plan for Dakar, to ramp up disaster management practices, as motivation for a stakeholder debate to define subsequently a set of specific and viable actions.
Users also downloaded
Showing related downloaded files
Publication Stolen Asset Recovery : A Good Practices Guide for Non-conviction Based Asset Forfeiture(World Bank, 2009)The guide is organized into three major parts: Part A first provides an overview of the problem of stolen assets and the problem of recovering the assets once they are transferred abroad. Second, it describes how the international community has taken steps to respond to the problem through United Nations Convention against Corruption (UNCAC) and the Stolen Asset Recovery (StAR) Initiative. UNCAC introduced a new framework to facilitate the tracing, freezing, seizing, forfeiture, and return of assets stolen through corrupt practices and hidden in foreign jurisdictions. The StAR Initiative developed an action plan to support the domestication and implementation of asset recovery provisions under UNCAC, to facilitate countries' efforts to recover stolen assets that have been hidden in foreign jurisdictions, and ultimately, to help deter such flows and eliminate safe havens for hiding corruption proceeds. Third and finally, Part A introduces non-conviction based (NCB) asset forfeiture as one of the critical tools to combat corruption, describing the situations when it is useful, how it differs from criminal forfeiture, its usefulness in civil and common law jurisdictions, and the support it has gained internationally. Part B contains the 36 key concepts. The concepts have been grouped together by topic area, including prime imperatives, definitions of assets and offenses subject to NCB asset forfeiture, measures for investigation and preservation of assets, procedural and evidentiary concepts, determining parties and ensuring proper notice, judgment proceedings, organizational considerations and asset management, and international cooperation and asset recovery. The concepts are illustrated through examples from cases and excerpts from different jurisdictions' NCB asset forfeiture legislation. Part C contains a number of special contributions written by individual practitioners. The contributions focus on the general practice of NCB asset forfeiture and international cooperation in specific jurisdictions, namely Colombia, Guernsey, Ireland, Kuwait, Switzerland, Thailand, and the United Kingdom. In addition, some contributions illustrate a selection of NCB asset forfeiture practices, such as asset management, delegating certain roles to the executive branch, and pursuing forfeiture based on illicit enrichment.Publication Macroeconomic and Fiscal Implications of Population Aging in Bulgaria(World Bank, Washington, DC, 2014-02)Bulgaria is in the midst of a serious demographic transition that will shrink its population at one of the highest rates in the world within the next few decades. This study analyzes the macroeconomic and fiscal implications of this demographic transition by using a long-term model, which integrates the demographic projections with social security, fiscal and real economy dimensions in a consistent manner. The simulations suggest that, even under fairly optimistic assumptions, Bulgaria's demographic transition will exert significant fiscal pressures and depress the economic growth in the medium and long term. However, the results also demonstrate that the Government of Bulgaria can play a significant role in mitigating some of these effects. Policies that induce higher labor force participation, promote productivity and technological improvement, and provide better education outcomes are found to counteract the negative consequences of the demographic shift.Publication Environmental Flows in Water Resources Policies, Plans, and Projects : Findings and Recommendations(World Bank, 2009)The overall goal of the analysis presented in this report is to advance the understanding and integration in operational terms of environmental water allocation into integrated water resources management. The specific objectives of this report are the following: 1) document the changing understanding of environmental flows, by both water resources practitioners and by environmental experts within the Bank and in borrowing countries; 2) draw lessons from experience in implementing environmental flows by the Bank, other international development organizations with experience in this area, and a small number of developed and developing countries; 3) develop an analytical framework to support more effective integration of environmental flow considerations for informing and guiding: (a) the planning, design, and operations decision making of water resources infrastructure projects; (b) the legal, policy, institutional, and capacity development related to environmental flows; and (c) restoration programs; and 4) provide recommendations for improvements in technical guidance to better incorporate environmental flow considerations into the preparation and implementation of lending operations.Publication Opportunity Assessment to Strengthen Collective Land Tenure Rights in FCPF Countries(World Bank, Washington, DC, 2021-10)Governments, development institutions, and the private sector are increasingly turning to nature-based solutions to address the world’s climate and biodiversity crisis. Countries, corporations, and investors are increasingly looking to forest- and land-based emission reduction programs (ERPs) to achieve early mitigation gains while they develop longer-term strategies and solutions to cut their greenhouse gas emissions. Central to emerging natural climate solutions are efforts to reduce deforestation and forest degradation while encouraging restoration, conservation, and sustainable use of forests in developing countries. The Forest Carbon Partnership Facility (FCPF), which became operational in June 2008, is a global partnership focused on reducing emissions from deforestation and forest degradation, forest carbon stock conservation, the sustainable management of forests and enhancement of forest carbon stocks (REDD+). Communal land and forest tenure rights for Indigenous Peoples and local communities (IPLCs) is critical for the success of emission reduction program (ERP) implementation. The remainder of this report is structured as follows. Section 2 provides an overview of the analytical and methodological approach of the study. Section 3 discusses core findings about the nature and range of emergent opportunities associated with efforts to advance, strengthen, and leverage rights and presents the main opportunities in six selected countries. Section 4 discusses lessons learned and cross-cutting areas for further development of rights recognition as a global process. Section 5 provides a summary of the country profiles.Publication World Development Indicators 2010(World Bank, 2010-04-01)The 1998 edition of world development indicators initiated a series of annual reports on progress toward the International development goals. In the foreword then, World Bank President James D. Wolfensohn recognized that 'by reporting regularly and systematically on progress toward the targets the international community has set for itself, the author will focus attention on the task ahead and make those responsible for advancing the development agenda accountable for results.' The same vision inspired world leaders to commit themselves to the millennium development goals. On this, the 10th anniversary of the millennium declaration, world development indicators 2010 focuses on progress toward the millennium development goals and the challenges of meeting them.