Crises deepen poverty and threaten development investments. For that reason, crisis prevention and preparedness are a crucial part of poverty eradication. Estimates for 89 countries find that if all natural disasters could have been prevented in 2017, the number of people in extreme poverty—that is, those living on less than US$1.90 a day—would have fallen by 26 million (Hallegatte et al. 2017). In the same year, climate shocks were one of the leading causes of acute food crises and malnutrition, affecting 59 million people in 24 countries in Africa alone (FAO et al. 2018).

The International Development Association (IDA) is playing a vital role in helping low-income countries manage the risk of crises. The forthcoming IDA replenishment (IDA19) is an opportunity to increase the impact and efficiency of IDA’s contribution to crisis risk financing and management.

Securing value from investments in international development means protecting them from the effects of natural hazards. Millions of dollars of investment in schools, hospitals, and roads can be wiped out in hours by floods and earthquakes if development planning does not take disaster risk into account. The impact of extreme natural disasters is equivalent to a global US$520 billion loss in annual consumption.

The growing recognition of the intersection between poverty and crisis risk has been reflected in the evolution of IDA, which has developed a sophisticated set of instruments to finance and manage crisis risk (see Table 1). IDA18 was particularly ambitious in this regard, with a significant increase in the volume of funds allocated to key risk financing solutions, such as the Crisis Response Window (CRW), leaving the World Bank with a wide range of funding sources and delivery mechanisms to address crisis across a spectrum, from preparedness and prevention through response and recovery.


The Policy Brief written and published by The Centre for Disaster Protection

The full Policy Brief IDA19: A VITAL TOOL FOR MANAGING CRISIS RISK can be read here