IDA19: A vital tool for managing crisis risk

Countries are increasingly vulnerable to natural hazards, and when disasters strike millions of people are driven deeper into poverty. Between 1998 and 2017, climate-related and geophysical disasters killed 1.3 million people and affected 4.4 billion more. Those living in the 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. Climate change threatens to push an additional 100 million people into extreme poverty by 2030, and 720 million more by 2050 unless something is done. Half of those most affected by natural hazards live in fragile and conflict-affected states.

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. This report finds that the IDA could do this by taking the following steps: 

• Reset the incentives for client governments to invest in prevention and preparedness.
• Work with development insurers to deliver early and predictable finance to drive an early response.
• Reform the Crisis Response Window (CRW).
• Commission a review of IDA’s existing risk financing tools, drawing on independent expertise.