Suva – Pacific island countries are seeking to broaden and strengthen their disaster risk financing strategies as a key element of addressing the ongoing Climate Emergency.
With climate change remaining the biggest threat – even in the era of a pandemic – there is a pressing need for countries to invest in financial protection measures to enable quicker and more effective response. It is an approach that represents an investment, not a cost, to save lives, protect livelihoods and reduce poverty in a time of escalating climate risk.
This stronger approach to risk management, based on greater financial resilience, was the theme of the third webinar of Pacific Resilience Partnership (PRP): ‘Expect the Unexpected: Saving for a Rainy Day.’
Five panelists emphasised the importance of strengthening the financial resilience of Pacific countries to reduce disaster risk.
Ms. Litea Biukoto, Team Leader of Disaster Risk Reduction for the Disaster Community Risk Programme in the Geoscience, Energy and Maritime Division at the Pacific Community (SPC), underscored the importance of data for better decisions based on evidence.
She recalled her first disaster risk assessment ten years ago under the Pacific Catastrophe Risk Assessment and Finance Initiative (PCRAFI) – an open, online and accessible risk data set of hazards, exposure (building, infrastructure, people and crops), damage and loss – and the lack of a methodology to understand the value of assets.
Mr. Aholotu Palu, CEO of the Pacific Catastrophe Risk Insurance Company (PCRIC), a regional catastrophe risk pool, said the initiative was set up four years ago, at the request of 14 Pacific countries, to provide rapid access to cash for relief efforts. PCRIC also finances the PCRAFI.
He said that countries need a layered or coordinated approach to disaster risk financing in order to be prepared for low frequency/high risk disasters. “Countries need to develop an inclusive and comprehensive disaster risk financing strategy as well as investing in more access to data systems,” Mr. Palu said.
The PCRAFI provides a mechanism through which Pacific countries can address post-disaster funding needs. Tonga, for example, received $US 4.5 million under the PCRAFI after Tropical Cyclone Harold struck in April 2020. This payment was provided through PCRIC funds.
Mr. Sam Ieremia, Assistant CEO Planning at the Ministry of Finance, Samoa, explained that they are evolving the Samoa Disaster Risk Financing Strategy based on government priorities and complementing existing mechanisms.
After the measles outbreak in 2019, the government mandated that procurement rules be relaxed when an emergency was declared to enable rapid mobilisation of resources. The ministry has kept adapting and strengthening its financial system, based on experiences. Mr Ieremia emphasised the importance of having a robust Public Finance Management system.
Mr. Daniel Lund, Special Adviser on climate change issues within Fiji’s Ministry of Economy, outlined products and instruments available in the Pacific, such as Discretionary aid, National reserve funds, Sovereign parametric insurance, Flexible financing arrangements from domestically derived revenue. Each country would require a mix of approaches depending on their context. As part of this, he underscored the importance of social protection.
Mr. John Plevin, Financial Sector Specialist at the World Bank, said: “Disaster risk financing is more important than it has ever been.” He referenced the example of Vanuatu, where goods and services could not enter because of COVID-19 restrictions. He stressed the importance of transparency in planning.
Ms. Audrey Aumua, Deputy Director General of the Pacific Community (SPC), and chair of the webinar, said the discussions had highlighted the need to build financial resilience through varied and appropriate approaches.
This ‘Expect the Unexpected: The Rainy-Day-Saving Approach’ webinar is a part of a PRP series which showcases resilience initiatives within the context of multiple hazards. It shares collective and innovative resilience efforts at the regional, national and community levels, to facilitate peer-learning and improve resilience-building actions.
The webinar was co-organised by the PCRIC, Pacific Community and Pacific Islands Forum Secretariat with support of the PRP through its Risk Finance Technical Working Group.
The PRP, whose governance arrangements are guided by inclusivity, partnership, and leadership, was established by Pacific governments to support national implementation of the Framework for Resilient Development in the Pacific (FRDP).
A video recording of the webinar can be accessed here
Webinar information can be obtained from here