GAR 2013 Main Report

224 Part III - Chapter 15

15.1

How prospective is

prospective enough?

Without prospective risk management, countries will lose competitiveness and the inability to guarantee the infrastructure that business requires to be competitive itself. A number of nascent shifts in approach, however, are emerging from several countries that contribute to a move towards prospective disaster risk management—in the areas of legalisation, institutional arrangements and strategic programming.

More than ever, it is recognised that ultimately, disaster risk will be reduced only if mechanisms are implemented to avoid risk accumulation in new public and private investment (Heitzmann et al., 2002

Heitzmann, K., Canagarajah, S. and Siegel, P. 2002.,Guidelines for Assessing the Sources of Risk and Vulnerability., Social Protection Discussion Paper Series No 0218, World Bank.. .

; Blaikie et al., 2004

Blaikie, P., Cannon, T. Davis, I. and Wisner, B. 2004.,At Risk: Natural Hazards, People's Vulnerability and Disasters., London: Routledge.,. .

; UNDP, 2004

UNDP (United Nations Development Programme). 2004.,Reducing Disaster Risk, a Challenge for Development., Bureau for Crisis Prevention and Recovery., New York.,USA.. .

; UNISDR, 2007

UNISDR. 2007.,Hyogo Framework for Action 2005-2015. Building the Resilience of Nations and Communities to Disasters., Extract from the final report of the World Conference on Disaster Reduction (A/CONF.206/6). United Nations International Strategy for Disaster Reduction., Geneva,Switzerland: UNISDR.. .

; DFID, 2006

DFID (Department for International Development). 2006.,Reducing the Risk of Disasters – Helping to Achieve Sustainable Poverty Reduction in a Vulnerable World., A DFID policy paper’, DFID., London,UK.. .

; Thomalla et al., 2006; UNISDR, 2011

UNISDR. 2011.,Global Assessment Report on Disaster Risk Reduction: Revealing Risk, Redefining Development., United Nations International Strategy for Disaster Reduction., Geneva,Switzerland: UNISDR.. .

). Although the trend of growing investment in corrective risk management noted in the previous chapter is positive and encouraging, to be effective, it needs to be matched by prospective disaster risk management (UNISDR, 2011

; Lavell, 2003

Lavell, A. 2003.,Regional Programme for Risk Management in Central America. Ideas and notions relating to concept and practice., Panama:,CEPREDENAC and UNDP.. .

), which means employing a truly anticipatory rather than reactive or corrective approach to disaster risk. Without prospective risk management, countries will lose competitiveness and the inability to guarantee the infrastructure that business requires to be competitive itself.

The Hyogo Framework for Action (HFA) identified several key components that contribute to a truly prospective approach, including understanding

the risk footprint of a country; providing full access to risk information; and addressing the underlying drivers of risk. Prospectively managing risks related to business investment, however, has not yet been given full consideration in the HFA.

Progress in adopting a prospective approach to disaster risk reduction is still limited. Costa Rica, Panama and Peru (Bernal, 2012), for example, have now incorporated an analysis of disaster risk into public investment planning (UNISDR, 2009

UNISDR. 2009.,Global Assessment Report on Disaster Risk Reduction: Risk and poverty in a changing climate., United Nations International Strategy for Disaster Reduction., Geneva,Switzerland: UNISDR.. .

; UNISDR, 2011

These efforts, however, are still challenging. In Panama, disaster risk analysis applies only to large-scale projects and national investments. ⁱ This means that smaller-scale local level investment decisions are not included. And because most disaster losses in Panama are associated with damage to local infrastructure, this weakens the effectiveness of the measure.

Where political pressure exists in favour of investment in particular industries or regions of a country, these imperatives may override the risk and project analysis promoted by technical units of finance ministries ( GAR 13 paper

Orihuela, 2012

Orihuela, J.C. 2012.,Understanding Existing Methodologies for Allocating and Tracking DRR Resources in 6 Countries in the Americas: Colombia, Costa Rica, Guatemala, Mexico, Panama and Peru., Study commissioned by UNISDR., Geneva,Switzerland: UNISDR..
Click here to view this GAR paper.

). If systems of national investment planning are bypassed, disaster risk criteria lose their relevance, and investment projects may get the green light even without mandated risk assessments completed.

Land-use planning is another area with unresolved challenges. Few disaster risk management systems

Countries are yet to embrace a forward-looking and proactive approach to disaster risk management. A key component of such prospective risk management is the identification of appropriate risk management and financing strategies for different layers of risk. For events with low to medium-sized losses, it is more cost-effective to reduce risks than to rely on risk transfer strategies. And prospective risk management, involving factoring risk reduction into investment planning is more cost-effective than having to correct risk levels once the investment is made.

Many national risk-financing strategies still reflect a vision of disasters as exogenous shocks rather than of risk as an endogenous characteristic of investment flows. As such, the cost of risk financing is likely to grow except in countries that are making major investments in risk reduction.