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22 December 2021
The ongoing policy discussions about climate change resilience and the role of prevention and insurance, including the recent blog by Matthew Kahn and Somik Lall, reminded me of the 1985 science fiction movie “Back to the Future,” where a teenager is accidentally sent three decades back in a time-traveling automobile built by his eccentric scientist friend “Doc” Brown . It may be indeed worthwhile to go back to the future and return to the foundations of the economics of risk and insurance... Keep reading
22 December 2021
On September 10, 2004, Hurricane Ivan devastated Jamaica with its Category 4 winds and rain causing more than US$350 million in damages and taking the lives of 14 people. The scene is far too common, not only in Jamaica but more broadly in the Caribbean, a region notorious for its vulnerability to natural disasters. While governments are getting better at preparing for the economic and human impact of these storms, the ever more serious effects of climate change are making these threats... Keep reading
10 December 2021
With disasters a growing threat, insurance for countries trying to manage climate and disaster risk is becoming increasingly critical. While insight on what works – and what doesn’t – to build resilience is still limited, the experience of the Philippines shows how countries can improve their protection to disasters by working with international insurance markets. The Philippines is expected to incur, on average, $3.5 billion in asset losses each year from typhoons and earthquakes alone, and 74... Keep reading
16 November 2021
Disasters by their nature present a shock but nonetheless their occurrence can be estimated, as has been done by the insurance industry for years. That is to say the consequences are not so unexpected. However, when trying to account for the implicit contingent liabilities, such as those generated by natural disasters, the impact of the shocks are often not quantified in the government balance sheet. Yet, when they materialize, they place pressure on government finances that may raise interest... Keep reading
11 November 2021
Kur ndodh një fatkeqësi natyrore ose një krizë, burimet e brendshme të financave publike shpesh janë porti i parë të cilit i drejtohen qeveritë për t'iu përgjigjur me shpejtësi nevojave urgjente. Qeveritë përdorin kontigjencën ose fondet rezervë, akumulojnë borxhe ose kryejnë rialokime të fondeve të buxhetit duke i zhvendosur burimet nga qëllimi i tyre fillestar për të financuar reagimin ndaj katastrofave 1 . Në mungesë të alternativave të transferimit të riskut apo edhe në prani të tyre,... Keep reading
10 November 2021
When a disaster or a crisis hits, domestic public finance is often the first port of call for governments to respond to urgent needs quickly. Governments draw down on a contingency budget or reserve funds, accumulate debt or reallocate the budget by shifting resources away from their original purpose, towards financing disaster response 1 . In the absence of risk transfer options or even with such options available, domestic public finance is an important source to mitigate disaster because it... Keep reading
28 October 2021
Natural disasters cost about US$18 billion a year in emerging markets and developing economies through damage to power generation and transport infrastructure alone. They also trigger wider disruptions for households and firms costing at least US$390 billion a year ( World Bank, 2019 ). Ensuring reliable, sustainable, and resilient critical infrastructure is a core part of national economic security and climate change adaptation and resilience . Governments should secure the continuity of... Keep reading