1. 1 The Poor Suffer the Most: Dual Challenge of Poverty and Disaster Reduction in Latin America and the Caribbean Presentation at the VI Meeting of the Natural Disasters Network Joint Session with the Poverty Network, April 25 th 2005 IDB Headquarters, Washington D.C. Kari Keipi, Senior Specialist, IDB

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3. 3 Poverty and Disasters People in low-income countries are four times as likely to die in a natural disaster as people in high-income countries The poor are more vulnerable to natural hazards because poor people tend to: –have less savings and lack financial flexibility (impedes investing in disaster prevention and financing of disaster recovery) –live on marginal lands (urban and rural) –lack land titles (no incentives to invest in mitigating) –have no means to built safe infrastructure –not be warned of impeding disasters –lack means of evacuation (when warned)

4. 4 Diagnosis: Risk Profile for the Region Average of 40 important disasters annually in the region. 4 million people affected 5,000 deaths US$3.2 billion in direct losses and an estimated similar or larger amount of indirect losses.

5. 5 GNP and Disasters FEN Terremoto

6. 6 Life and death effects of disasters

7. 7 Development trends and future disasters “Losses per event will rise in the future, particularly in rapidly growing urban areas, unless systematic efforts are made to reduce vulnerability.” Jeffrey Sachs (2006), Investing in Development: A practical plan to achieve the Millennium Development Goals, p. 179. “...poverty and population pressure force growing numbers of poor people to live in harm’s way—on flood plains, in earthquake-prone zones and on unstable hillsides.” UN Secretary General Kofi Annan (2004).

8. 8 The Cycle of Vulnerability POVERTY MICRO- LEVEL VULNER- ABILITY DISASTER ECONOMIC IMPACTS NATURAL HAZARD MACRO-LEVEL VULNERABILITY

9. 9 Inadequate capacity for risk management AGRAVATING FACTORS OF VULNERABILITY Inadequate development model Underestimation of hazards Population incapable of assessing its vulnerability and confronting emergencies Obsolete risk management legislation Decision makers lack awareness and willingness Inadequate territorial management Inadequate management of natural resources Weak risk management institutions Poor construction quality More vulnerable constructions and productive activities Population and productive activities over- exposed to hazards Random urban growth Natural resources and environmental deterioration Reactive and centralist disaster attention paradigms still prevail

10. 10 Land use planning (know risk, avoid settlements in hazard prone areas, provide alternatives) Construct to reasonable standards (raise awareness, build in accordance with the hazard environment) Increase savings opportunities Establish viable contingency plans at community level Consider (small) business continuity needs Sustainable poverty reduction must address disaster risk

11. 11 Sustainable poverty reduction must address practices to decrease vulnerability Hillside farming, slash and burn techniques in rural areas which remove soil cover could cause mudslides and flooding from heavy rains Clogging of urban drainage or natural run-off leads to flooding.

12. 12 The Indicators Program Indicators have on a pilot basis been developed for 12 countries. Consists of four major measures (comprised of composite indicators) –The Disaster Deficit Index (DDI) –The Local Disaster Index (LDI) –The Prevalent Vulnerability Index (PVI) –The Risk Management Index (RMI)

13. 13 PVI The Prevalent Vulnerability Index is made up of a series of indicators that characterize prevalent vulnerability conditions reflected in exposure in prone areas, socioeconomic weaknesses and lack of social resilience in general. –Indicators of Exposure and Susceptibility (PVI es ) –Indicators of Socioeconomic Fragility(PVI sf ) –Indicators of (Lack of) Resilience (PVI lr )

14. 14 PVI for Selected IDB Member Countries

15. 15 BEFORE EMERGENCYAFTER IDB Financial Instruments Immediate Emergency Response Facilty: $20 million Disaster Prevention Facility: $5 million Re-orientaction of loans under execution Emergency Technical Cooperation to the Country Offices’ discretion: $200,000 Reconstruction Operations with risk reduction components or activities Disaster Prevention Fund Bank Instruments Re-orientation of loans under execution Technical Cooperations

16. 16 The IDB Disaster Prevention Fund This fund has been created by the Bank to facilitate investments by countries in disaster prevention Fund to finance individual non-reimbursable operations, including studies concerning the preparation and design of prevention projects and components of loans in high- risk areas and sectors. Each individual grant is capped at US$ 1 million. The fund can be used to finance strategic interventions to improve disaster prevention at local, national and regional level.

17. 17 Meeting the dual challenge People’s vulnerability to natural hazards has a strong influence on poverty in its multiple dimensions, and vice versa.  Poverty reduction strategies must address the risk to natural hazards and integrate vulnerability reduction.  Action is needed now. Current demographic trends (with uncontrolled urban settlement) will lead to much increased vulnerability in the future, unless systematic efforts are made to reduce vulnerability.  Collaboration is needed between urban and rural planners, civil defense, and professionals responsible for social services and investments.