Disaster Risk Management in Asia and the Pacific

The Asia-Pacific region leads the world in a wide range of categories, including projected economic growth,1 mobile cellular subscriptions,2 steel production,3 and beer consumption.4 Unfortunately, the region also leads in disaster losses.

Risk Profile: Asia and the Pacific Region

Asia-Pacific countries experience roughly 30-35% of the world's disaster events in any given year. Yet, they typically account for up to half of the world's total deaths, damage, and loss from disasters and up to 90% of the total number of people affected.

Figure 1 shows a model of the mortality risk facing countries around the world from multiple disaster risks. The preponderance of countries from Asia and the Pacific in the upper right-hand corner demonstrates the high risk these countries face compared to other parts of the world.

Figure 1. UN-ISDR Mortality Risk Index for Multiple Risks

Source: Global Risk Data Platform

Figure 2 shows from which hazards this risk comes—from droughts to floods, earthquakes to wildfires, and more. In the last 5 years alone, the region faced 884 disasters, which affected 1.03 billion people—over two hundred thousand of them fatally—and incurred damage estimated at roughly $229 billion.

Figure 2. Overview of Impact of Different Types of Disaster Events in DMCs in Asia and the Pacific, 2005-2010

Source: Centre for Research on the Epidemiology of Disasters EM-DAT database; Asian Development Bank

The first four columns of Figure 2 show events recorded by the Centre for Research on the Epidemiology of Disasters in Belgium. The fifth column shows types of hazards the Asian Development Bank's projects have targeted in the last five years, with the projects totaling $7.43 billion.

Strengthening Country Capabilities for Managing Disaster Risk

Traditionally, governments in the region have reacted to disaster risks after the fact rather than focusing on preventive measures to reduce vulnerability and impacts in the first place. This reliance on post-disaster response carries substantial opportunity costs and exposes hard-won development gains to unnecessary and short-sighted risks.

Recently, however, the region has begun making progress in strengthening its disaster capacities. Some 168 countries around the world have made commitments to disaster risk reduction under the 2005-2015 Hyogo Framework for Action.5 The framework's 5 priorities for action are:

  1. Ensure that disaster risk reduction is a national and a local priority with a strong institutional basis for implementation.
  2. Identify, assess and monitor disaster risks and enhance early warning.
  3. Use knowledge, innovation and education to build a culture of safety and resilience at all levels.
  4. Reduce the underlying risk factors.
  5. Strengthen disaster preparedness for effective response at all levels.

Together with the progress, though, are the gaps in meeting the Framework's priorities. Figure 3 shows the average results (on a scale of 1 to 5) across all five priorities for action for the countries that have reported data for 2011. For ADB, these gaps fall into three main categories—policy, financing, and capacity.

Figure 3. HFA Progress Data for Countries in Asia and the Pacific

Source: UN-ISDR, HFA Progress Viewer Tool

An Integrated Approach for ADB

Since 1987, ADB has implemented more than $12.3 billion6 in projects related to disasters, with much of the investment done in the context of supporting post-disaster recovery activities.

In 2004, ADB approved its Disaster and Emergency Assistance Policy, which promotes an integrated disaster risk management model that addresses the three-fold gaps of policy, financing, and capacity. Likewise, the model guides developing member countries not just to fulfill their commitments under the Hyogo Framework but also to strengthen their capacities for effective disaster risk management.

The model has three pillars:

  • disaster risk reduction
  • climate change adaptation
  • disaster risk financing

The first two pillars intertwine to maximize the co-benefits for investments in resilience measures that could potentially protect against multiple hazards. The third pillar ensures that member countries can reduce their financial exposure to disaster events and undertake disaster risk reduction and climate change adaptation measures that otherwise might not have been taken.

To implement the integrated disaster risk model, ADB developed a range of solutions applicable in multiple conditions. These are:

Strengthened Regional Networks on Disaster Risk Management

ADB supported a range of project with regional institutions in Asia-Pacific to enhance capacities for regional collaboration on disaster risk management. These include:

  • A Disaster Risk Reduction Projects Portal to share information on progress in implementing disaster risk reduction projects in the region and collectively identify gaps and areas of cooperation among development partners.
  • An inventory of regional disaster risk management investments currently being expanded into a broader finance tracking mechanism.

Access to Flexible Financing

In collaboration with various development partners, ADB is working to establish a multi-donor trust fund for integrated disaster risk management. The trust fund aims to increase the flow of funding to regional initiatives and catalyze greater national and local investment within DMCs. Grants from the trust fund would provide a mechanism for funding innovative ideas as well as for responding to member country requests for small-scale ADB assistance on risk assessment, capacity development, and scoping studies.

Disaster Risk Financing Tools

ADB's developing member countries face a significant gap in accessing mechanisms for transferring risk to reduce financial exposure within individual countries, cities, or communities. To address this gap, ADB is currently working toward the establishment of

  • a contingent credit capability to provide them with stronger post-disaster borrowing options; and
  • a suite of disaster risk financing tools to enable them to more effectively reduce their financial exposure to disaster events through the transfer of risks to international insurance and capital markets.

The Regional and Sustainable Development Department in ADB is initiating two new regional technical assistance projects that will develop disaster risk financing solutions for cities in Indonesia, the Philippines, and Viet Nam. The projects will support work with the participating member countries to formulate risk profiles, develop risk models for priority hazards, explore the feasibility of various risk transfer solutions (including insurance, contingent credit, catastrophe bonds, innovative loan/insurance hybrids products, and other tools), and develop specific risk transfer solutions to take to market. Within 3 years, ADB hopes that this will provide a set of disaster risk financing models that could be applied in other parts of Asia.

Urban Risk Reduction Tools

As of 2008, more than half the world's population lives in cities. The Asia-Pacific region passed this milestone even earlier. The tremendous pace of urbanization has meant that cities are increasingly being built and expanded in risk prone areas, using building technologies that were not developed to address urban risk exposures, underinsuring infrastructure investments, and continuing to grow cities without adequate governance mechanisms to address the needs of informal settlers and the poor.

To address these issues, urban risk reduction now figures prominently in the new ADB Urban Operations Plan that is currently being finalized. In addition, ADB is using technical assistance projects to develop guidebooks on risk-sensitive land-use planning, an urban risk reduction toolkit for local authorities, and the models for urban disaster risk financing.

Environmental Governance Guidance and Tools

ADB is also exploring a potentially new initiative on risk management and environmental governance to promote and better manage the interaction of political, social, and economic systems with the natural environment, within the context of disaster and climate risks. Planning is very preliminary at this stage but will be developed over the coming year.

1 ADB. 2011. 'Asia 2050: Realizing the Asian Century'
2 ITU. 2010. 'Key Global Telecom Indicators for the World Telecommunication Service Sector'
3 World Steel Association. 2009. 'Steel Statistical Yearbook 2009'
4 The Economist. 2010. 'All pints east: Asia overtakes Europe, in beer terms'. Aug 17, 2010.
5 The Hyogo Framework for Action is a 10-year plan to make the world safer from natural hazards. It was adopted by 168 Member States of the United Nations in 2005 at the World Disaster Reduction Conference.
6 As of May 2011.