During the 10th replenishment of the Asian Development Fund (ADF XI), the Asian Development Bank (ADB) and ADF donors agreed to pilot the Disaster Response Facility (DRF) in the ADF XI period, 2013–2016. ADB will report on the implementation progress of the DRF at the ADF XI midterm review, and discuss the future of the DRF with the ADB Board of Directors and ADF donors at the ADF XII negotiations.
Natural disasters affect Asia and the Pacific more than any other part of the world. They can cause major economic and social damage, undo development gains, and threaten a country’s ability to reduce poverty. Natural disasters disproportionately harm poor countries and people. ADF countries are particularly vulnerable to natural disasters.
As the disaster–poverty nexus demonstrates, supporting disaster responses of developing member countries is an integral part of the poverty reduction missions of ADB and other multilateral development banks. Since the 1980s, ADB has been an active partner to its developing member countries in responding to natural disasters. However, ADB’s disaster responses are constrained by the availability of, and difficulty in accessing, resources. Resource constraints are especially acute for ADF-only countries, which have limited access to resources beyond their performance-based allocation (PBA). The PBA system does not take into consideration vulnerability to natural disasters. Nor does it allocate additional resources to assist countries affected by natural disasters.
In the absence of dedicated funding mechanisms to respond to disasters, ADB’s assistance to ADF countries has been provided through an ad hoc approach of reprogramming existing development assistance. This has led to delays, large gaps between assistance needed and provided, and the diversion of resources from development projects to disaster responses, putting at risk long-term development goals. The piloting of the DRF is one step toward a more flexible, predictable, and systematic approach to responding to disasters in ADF countries.
The DRF will require ADF countries to forgo a small fraction of their PBA for the benefit of accessing the DRF in case of a natural disaster. The DRF will have the following key features:
(i) DRF will be for natural disasters.
(ii) DRF will support emergency responses, and rehabilitation and reconstruction needs.
(iii) The size of the DRF will be 3% of the PBA.
(iv) In case of a disaster, an ADF-only country can get up to 100% of its annual PBA allocation, or $1 million per disaster, whichever is higher, from the DRF.
(v) A blend country affected by a natural disaster can receive up to 3% of its annual PBA allocation from the DRF.
(vi) ADB will coordinate with the World Bank’s CRW and other relevant development agencies in carrying out the DRF operations as appropriate, e.g., in information sharing or deciding on the nature of support for a disaster.
The design and implementation of DRF operations will follow ADB’s existing policy frameworks, such as the Disaster and Emergency Assistance Policy (2004) and the Additional Financing Policy (2011).