Publication: Indonesia: Advancing a National Disaster Risk Financing Strategy--Options for Consideration
Loading...
Date
2011-10
ISSN
Published
2011-10
Author(s)
Editor(s)
Abstract
This study presents options for a national disaster risk financing strategy in Indonesia, drawing heavily on international experience. The study discusses a series of complementary options for a national disaster risk financing strategy, based on a preliminary fiscal risk analysis and a review of the current budget management of natural disasters in Indonesia. It benefits from the international experience of the World Bank, which has assisted several countries in the design and implementation of sovereign catastrophe risk financing strategies. The rehabilitation and reconstruction fund is the main budget instrument for the Government of Indonesia (GoI) to finance public post-disaster expenditures, but it is under-capitalized. This study presents an optimal combination of risk-retention and risk transfer instruments that could help the GoI increase its immediate financial response capacity against natural disasters and better protect its fiscal balance. Building on the three-tier risk layering approach promoted by the World Bank and the preliminary fiscal risk assessment analysis, the following financial strategy could be considered by the GoI. This strategy would provide the GoI with access to immediate liquidity in the aftermath of a disaster at a competitive cost. The strategy would allow the GoI to access up to US$1.8 billion liquidity in the aftermath of a disaster in order to finance immediate post-disaster expenditures, such as grants for livelihood and low income housing reconstruction. Preliminary disaster fiscal risk assessment analysis shows that this would protect the GoI against disasters occurring every 100 years. The implementation of a national disaster risk financing strategy would require significant institutional capacity building.
Link to Data Set
Citation
“World Bank. 2011. Indonesia: Advancing a National Disaster Risk Financing Strategy--Options for Consideration. © World Bank. http://hdl.handle.net/10986/22421 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Advancing Disaster Risk Financing and Insurance in ASEAN Member States : Framework and Options for Implementation, Volume 2. Technical Appendices(Washington, DC, 2012-04)This report is part of a project being jointly conducted by the World Bank, the Global Facility for Disaster Reduction and Recovery (GFDRR), the Association of Southeast Asian Nations (ASEAN) Secretariat, and United Nations International Strategy for Disaster Reduction (UNISDR). It aims to provide capacity building on disaster risk financing and insurance (DRFI) in ASEAN Member States. DRFI is a relatively new topic and, therefore, training and capacity building of local stakeholders is essential. Governments must understand the benefits and the limitations of disaster risk financing and insurance as part of their comprehensive Disaster Risk Management (DRM) strategies. This report presents main findings and recommendations on DRFI in the ASEAN region. Following the World Bank disaster risk financing and insurance framework, it consists of five chapters, including this introduction. Chapter two presents a preliminary economic and fiscal risk assessment of natural disasters in ASEAN Member States. Chapter three provides an overview of the fiscal management of natural disasters currently implemented by ASEAN Member States. Chapter four reviews the state of the private catastrophe insurance markets, including property catastrophe risk insurance, agricultural insurance, and disaster micro-insurance. Chapter five identifies five main recommendations for strengthening the long-term financial and fiscal resilience of ASEAN Member States against natural disasters, as part of their broader disaster risk management and climate change adaptation agendas.Publication Fiscal Disaster Risk Assessment and Risk Financing Options(World Bank, Washington, DC, 2016-06-01)The objective of the report is to raise awareness of the fiscal impacts that natural disasters have on the budget of the Government of Sri Lanka. It is envisioned to be used as a planning tool for the potential development of a comprehensive disaster risk financing and insurance strategy that would equip the Ministry of Finance with additional instruments to manage the contingent liability posed by disasters. Its recommendations are a starting point for a collaborative discussion with the government on the potential development of a broad program.Publication Catastrophe Risk Assessment Methodology(Washington, DC, 2013)The Pacific Region is one of the most natural disaster prone regions on earth. The Pacific Island Countries (PICs) are highly exposed to the adverse effects of climate change and natural hazards, which can result in disasters affecting their entire economic, human, and physical environment and impact their long-term development agenda. The average annual direct losses caused by natural disasters are estimated at US$284 million. Since 1950 natural disasters have affected approximately 9.2 million people in the Pacific Region, causing 9,811 reported deaths. This has cost the PICs around US$3.2 billion (in nominal terms) in associated damage costs. This report focuses on the development of the country catastrophe risk profiles, the information collected, how it was catalogued and processed, and now being used for a variety of applications in Climate and Disaster Risk Management. The country risk profiles integrate data collected and produced through risk modeling and include maps showing the geographic distribution of assets and people at risk (section one), hazards assessed (section two) and potential monetary losses and casualties (section three). The profiles also include an analysis of the possible direct losses (in absolute terms and normalized by GDP) caused by tropical cyclones and earthquakes, and their impact though severe winds, rainfall, coastal storm surge, ground shaking and tsunami waves. The expected return period indicates the likelihood of a certain specified loss amount to be exceeded in any one year.Publication The Sendai Report(World Bank, Washington, DC, 2012)This report argues that the practice of disaster risk management (DRM) is a defining characteristic of resilient societies, and should therefore be integrated, or 'mainstreamed', into all aspects of development. The report will inform the Development Committee at the annual meetings 2012, and support discussion at the Sendai dialogue, a special event co-organized by the Government of Japan and the World Bank as part of the Annual Meetings program. This event will engage delegates on the importance of mainstreaming DRM, drawing upon the lessons from the great East Japan earthquake and tsunami of 2011, and other disasters. This paper includes the following headings: disasters and development: an alarming trend; disaster risk management in action; national policies and planning; International Development Cooperation; disaster risk management at the World Bank; the way forward: priorities and opportunities; and glossary and references.Publication Natural Disaster Risk Management in the Philippines : Enhancing Poverty Alleviation Through Disaster Reduction(Washington, DC, 2005-10)The Philippines by virtue of its geographic circumstances is highly prone to natural disasters, such as earthquakes, volcanic eruptions, tropical cyclones and floods, making it one of the most disaster prone countries in the world. This report seeks to document the impacts of natural disasters on the social and economic development of the Philippines; assess the country's current capacity to reduce and manage disaster risk; and identify options for more effective management of that risk. The Philippine institutional arrangements and disaster management systems tend to rely on a response, or reactive approach, in contrast to a more effective proactive approach, in which disasters are avoided, by appropriate land-use planning, construction and other pre-event measures which avoid the creation of disaster-prone conditions. To evolve to a more proactive role, it is important that a national framework for comprehensive disaster risk management be prepared and implemented. The framework should incorporate the essential steps of integrated risk management, which include risk identification, risk reduction, and risk sharing/financing. The study identified some specific areas under these key themes that would need to be addressed to improve the current system, discussed through the study. The study also found that currently, the Government and individual households bear the majority of costs caused by natural disasters. More effective options for financing disaster risk, and relieving the burden of disasters from the public sector should be explored, including the idea of a catastrophe insurance pool, and/or contingent credit facilities. Also found was that, despite the high hazard risk in the Philippines, the insurance coverage for residential dwellings' catastrophes is almost non-existent. It is stipulated the Bank should examine the ongoing portfolio to identify how its projects can support the goal of disaster risk reduction. In addition, the Bank should consider more direct support to the development of an integrated disaster management risk approach, through the provision of technical assistance and lending.
Users also downloaded
Showing related downloaded files
Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Remarks to the Annual Meetings 2020 Development Committee(World Bank, Washington, DC, 2020-10-16)David Malpass, President of the World Bank Group, announced that the Board approved a fast track approach to emergency health support programs that now covers 111 countries. Most projects are well advanced, with average disbursement upward of 40 percent. The goal is to take broad, fast action early. The operational framework presented back in June has positioned the Bank to help countries address immediate health threats and social and economic impacts and maintain our focus on long-term development. The Bank is making good progress toward the 15-month target of 160 billion dollars in surge financing. Much of it is for the poorest countries and will take the form of grants or low-rate, long-maturity loans. IFC, through the Global Health Platform, will be providing financing to vaccine manufacturers to foster expanded production of COVID-19 vaccines in both part 1 and 2 countries, providing production is reserved for emerging markets. The Development Committee holds a unique place in the international architecture. It is the only global forum in which the Governments of developed countries and the Governments of developing countries, creditor countries and borrower countries, come together to discuss development and the ‘net transfer of resources to developing countries.’ The current International Financial Architecture system is skewed in favor of the rich and creditor countries. It is important that all voices are heard, so Malpass urged the Ministers of developing countries to use their voice and speak their minds today. Malpass urged consideration of how we can build a new approach to debt restructuring that allows for a fair relationship and balance between creditors and debtors. This will be critical in restoring growth in developing countries; and helping reverse the inequality.Publication World Development Report 2011(World Bank, 2011)The 2011 World development report looks across disciplines and experiences drawn from around the world to offer some ideas and practical recommendations on how to move beyond conflict and fragility and secure development. The key messages are important for all countries-low, middle, and high income-as well as for regional and global institutions: first, institutional legitimacy is the key to stability. When state institutions do not adequately protect citizens, guard against corruption, or provide access to justice; when markets do not provide job opportunities; or when communities have lost social cohesion-the likelihood of violent conflict increases. Second, investing in citizen security, justice, and jobs is essential to reducing violence. But there are major structural gaps in our collective capabilities to support these areas. Third, confronting this challenge effectively means that institutions need to change. International agencies and partners from other countries must adapt procedures so they can respond with agility and speed, a longer-term perspective, and greater staying power. Fourth, need to adopt a layered approach. Some problems can be addressed at the country level, but others need to be addressed at a regional level, such as developing markets that integrate insecure areas and pooling resources for building capacity Fifth, in adopting these approaches, need to be aware that the global landscape is changing. Regional institutions and middle income countries are playing a larger role. This means should pay more attention to south-south and south-north exchanges, and to the recent transition experiences of middle income countries.Publication Doing Business 2014 : Understanding Regulations for Small and Medium-Size Enterprises(Washington, DC: World Bank Group, 2013-10-28)Eleventh in a series of annual reports comparing business regulation in 185 economies, Doing Business 2014 measures regulations affecting 11 areas of everyday business activity: Starting a business, Dealing with construction permits, Getting electricity, Registering property, Getting credit, Protecting investors, Paying taxes, Trading across borders, Enforcing contracts, Closing a business, Employing workers. The report updates all indicators as of June 1, 2013, ranks economies on their overall “ease of doing business”, and analyzes reforms to business regulation – identifying which economies are strengthening their business environment the most. The Doing Business reports illustrate how reforms in business regulations are being used to analyze economic outcomes for domestic entrepreneurs and for the wider economy. Doing Business is a flagship product by the World Bank and IFC that garners worldwide attention on regulatory barriers to entrepreneurship. More than 60 economies use the Doing Business indicators to shape reform agendas and monitor improvements on the ground. In addition, the Doing Business data has generated over 870 articles in peer-reviewed academic journals since its inception.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.