Why Asia and the Pacific Need Disaster Risk Financing

Video | 31 January 2013

A new ADB report says human and financial losses from natural disasters are rising fast in Asia and the Pacific. The report, Investing in Resilience recommends regional governments find ways to offer disaster risk financing such as insurance and catastrophe bonds to strengthen resilience and offset the impacts. Bindu Lohani, ADB's Vice President for Knowledge Management and Sustainable Development discusses the cost of disasters to the region and how preparedness is key.

Transcript

Title: Why Asia and the Pacific Need Disaster Risk Financing

Description: A new ADB report says human and financial losses from natural disasters are rising fast in Asia and the Pacific. The report, Investing in Resilience recommends regional governments find ways to offer disaster risk financing such as insurance and catastrophe bonds to strengthen resilience and offset the impacts. Bindu Lohani, ADB's Vice President for Knowledge Management and Sustainable Development discusses the cost of disasters to the region and how preparedness is key.

Bindu Lohani
Vice President
Knowledge Management and Sustainable Development
Asian Development Bank

Let’s take a look from the period 1970 to 2010 a span of 40 years, it was reported that almost 1.7 million people have died due to natural disaster related events, and that is about more than 50% than the global average that is very significant for Asia. The other thing, which is also striking – the losses over the period of time, is increasing and if you compare the losses due to natural disaster with the GDP increase, the losses seem to be more rapidly increasing than the growth of the GDP. This is scary.

Q: What is the key message of ADB’s Report called Investing in Resilience?
A: With the kind of natural disaster that we are expecting in Asia, we need to be a bit more serious. The governments need to start making a plan on it. They need to make this as part of the development both as individual development and as a longer term plan. Currently, when you at it there’s a lot of room to do. There’s another  dimension that we put in the report, which I think is relatively new on the financing instruments. We are assessing that the governments need to look into these various instruments  such as insurance, which is already happening in well developed countries; the catastrophe bond; the calamity fund and there are many other instruments available and explained in the report. To me, what is very striking is also the fact that in the developed countries about 40% of the losses are insured while in Asia it’s only 5%, I think this is something we could improved a lot.