Jamaica needs to set aside US$121 million a year for hurricanes, floods

Wednesday, July 18, 2018

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Within the context of the fast-approaching peak of the hurricane season, the World Bank on Monday presented the Government of Jamaica with an assessment of the legislative, financial management, fiscal, and insurance market environment in Jamaica, and proposed a new road map to advance disaster risk finance in the country.

The analysis shows that the country needs to set aside some US$121 million each year to address the public sector impacts of hurricanes and floods.

According to the Ministry of Finance, the country has spent in excess of US$22 billion on recovery from 324 hurricanes and storms during the period 1950 to 2016.

The Atlantic hurricane season starts June 1 and stretches through November 30.

The World Bank report is titled Advancing Disaster Risk Financing in Jamaica, and was prepared with funding from the African, Caribbean, Pacific – European Union Natural Disaster Risk Reduction Program, through the Global Facility for Disaster Reduction and Recovery. It identifies several options for the development of cost-effective, affordable, and sustainable disaster risk financing and insurance strategies in the country.

Based on the analysis the Government of Jamaica is about to prepare, with assistance from the World Bank, a disaster risk management framework, with a suite of financing instruments for managing risk.

“The poor are disproportionately affected by disasters,” said World Bank Country Manager Galina Sotirova.

“Risk financing can also improve resilience of the most vulnerable by increasing the Government's response capacity in the aftermath of a disaster, while protecting long-term fiscal balance and development gains. The report aims at promoting a debate on managing risk and identifies tools to first quantify and assess risk; prepare the environment for financial solutions to operate efficiently; and then arrange the solutions,” she said Monday.

Noting that Jamaica has faced significant losses as a result of its exposure and vulnerability to natural disasters of varying intensity and severity, Sotirova said that reports from the Intergovernmental Panel on Climate Change have confirmed that the effects of climate change on countries like Jamaica will continue to intensify, making natural disasters one of the main risks to Jamaica's fiscal and macroeconomic outlook.

Monday's workshop was opened by Fayval Williams, minister of state in the Ministry of Finance and the Public Service, at the Jamaica Pegasus hotel.

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