ADB, partners review financial readiness for disaster response in Pakistan

ISLAMABAD: The Asian Development Bank (ADB), the Department for International Development (DFID) of the United Kingdom, and German development cooperation through KfW joined the government of Pakistan and other partners on Wednesday to discuss strategies for disaster risk financing.

The two-day workshop, titled “Disaster Risk Financing in Pakistan: Enhancing Synergies and Coordination of Initiatives” reviewed the enabling environment, and disaster financing instruments currently in place in the country and opportunities for enhanced financial preparedness.

Senior government officials, donors, and local and international experts who attended the event reiterated their commitment to continue supporting efforts to strengthen the country’s disaster risk financing capacity.

ADB Country Director for Pakistan Xiaohong Yang, DFID Pakistan Head of Economic Growth Patricia Seex, and KfW Senior Project Manager Christiane Schmidt opened the workshop.

National Disaster Risk Management Fund (NDRMF) Chief Executive Nadeem Ahmad highlighted the importance of existing and planned disaster risk financing instruments to enhance fiscal resilience to deal with disasters, and outlined the role of the NDRMF in close cooperation with the National Disaster Management Authority (NDMA).

NDMA Chairman Lieutenant General Omar Mahmood Hayat underscored the role of national and provincial disaster management authorities in risk management, and urged to enhance the effectiveness of disaster risk financing.

“ADB has been working with the government of Pakistan and other development partners to institute robust financing mechanisms and instruments to deal with future disasters, which resulted in the establishment of the multi-donor NDRMF with an initial contribution of $200 million to reduce socioeconomic and fiscal vulnerability to natural hazards,” said Yang. “ADB’s response to Pakistan’s disaster financing challenges is anchored in its experience in leading successful recovery efforts in recent years.”

Pakistan is vulnerable to natural hazards, which have resulted in major loss of life and damage to infrastructure and services with significant economic consequences in recent years.

More than 30 million people were affected by three major flood events in 2010, 2011, and 2014, resulting in damage and losses exceeding $14 billion.

Parts of the country also face significant seismic risk. A major earthquake in 2005 caused over 73,000 deaths and $5 billion in losses.

In addition, a major cyclone event in 2007 affected 2.5 million people, while a drought affected over three million people in 2014-2015.

The workshop discussed instruments to strengthen federal and provincial governments’ financing capacity to respond to disasters.

International experts, represented by the Insurance Development Forum and InsuResilience Global Partnership, presented various risk insurance modalities to provide timely and adequate humanitarian relief, early recovery, and reconstruction efforts.

Broader financial strategies to ensure the selection and implementation of the most cost-effective complement of instruments for different layers of risk were also discussed.