Making the World Bank’s IDA19 a vital tool for managing crisis risk – Centre for Disaster Protection sets out recommendations

The World Bank’s International Development Association (IDA) must take a pioneering approach to crisis risk finance to further improve the way it safeguards the world’s poorest people against the worst impacts of disasters – according to a series of papers commissioned by the Centre for Disaster Protection.

The recommendations come as donors plan IDA’s focus for 2021-2024. As the World Bank’s main source of finance for low-income countries, IDA has been at the forefront in scaling up investment that has allowed some of the world’s poorest countries to build resilience against disasters and respond when they strike.

The latest round of talks on its 19th replenishment of resources will take place from June 17th-20th in Addis Ababa, Ethiopia.

New analysis for IDA19

The Centre for Disaster Protection’s IDA19: A vital tool for managing crisis risk offers succinct advice drawn from its new collection of papers by leading global experts.

“The World Bank’s International Development Association is playing a vital role in helping low-income countries to manage the risk of crises, but it needs to do much more,” says Daniel Clarke, Director of the Centre for Disaster Protection, which works with the financial, development and humanitarian sectors.

“Too much of its crisis financing treats crises like surprises. Yet many shocks, such as cyclones, floods, droughts, earthquakes, and epidemics, can and should be proactively managed beforehand through investments in prevention, preparedness, and development insurance, to reduce the cost of dealing with disasters, and stop them from devastating lives and vulnerable economies.”

Calls for Concrete Change

The series of papers recommends several key changes in the way IDA finances and helps some of the world’s poorest nations to manage the risk of crises.  Specifically, it asks IDA19 to:

  • Reset the incentives for governments of low-income countries to invest in preventing and preparing for disasters, by making finance for crisis preparedness available on the same terms or better as finance for crisis response.
  • Prioritise loans for development insurance – working with institutions that operate on insurance principles but deliver against development objectives – over loans for post-disaster response and recovery for predictable risks.
  • Reform IDA’s Crisis Response Window – which provides countries with additional resources to help them respond to severe economic crises and major disasters. This should be used for the most unpredictable emergencies, leaving other more predictable crises to be addressed by other instruments. And it should improve its operational performance – to date the average time from crisis to first disbursement from IDA’s Crisis Response Window has been 398 days. This is too slow.
  • Commission a review of the IDA’s existing financial tools for managing risk, drawing on independent expertise.

IDA is replenished every three years, with IDA18 (2017-2020) the largest so far in the World Bank’s history, mobilising US$75 billion.

Disaster risk for the world’s poorest people

Across the globe, 1.3 million people were killed – and 4.4 billion more affected – by climate-related and geophysical disasters between 1998 and 2017. People living in the world’s poorest countries are on average six times more likely than those in rich nations to be injured, lose their home, be displaced, or require emergency assistance. Unless action is taken, climate change threatens to push an additional 100 million people into extreme poverty by 2030, and 720 million more by 2050.

The Centre for Disaster Protection finds better ways to stop disasters devastating lives and economies, by supporting low and middle income countries to better manage disaster risk.  Informing global policy and helping to shape the way money is programmed for disaster and crisis risk management throughout the multilateral development and humanitarian system is central to its mission.

The full series of IDA19 papers is available at disasterprotection.org/IDA19

Follow the Centre for Disaster Protection on twitter @CentreForDP

                                                                                                                                                          Written by the Centre for Disaster Protection