ECONOMYNEXT – The World Bank has recommended that Sri Lanka develop a national disaster risk financing strategy and explore catastrophe risk insurance options for public assets given the damage caused by recent natural disasters whose frequency is increasing.
“It is of utmost importance for Sri Lanka to increase its physical resilience to reduce impact of disasters and financial resilience to deal with the impact when the disaster happens,” the World Bank said in its latest development update.
To improve Sri Lanka’s physical resilience to disasters, the World Bank is supporting the government’s Climate Resilience Improvement Project (CRIP).
It recommends that the government identify current climate risk, and implement immediate risk mitigation interventions, identify future drivers of risk and create basin-level long-term risk mitigation investment plans, followed by physical investments.
To improve financial resilience, the World Bank recommends several options to increase the government’s immediate financial response capacity against natural disasters and better protect its fiscal balance as well as to achieve timely response, relief and recovery.
In the short term it recommends Sri Lanka streamline damage-and-loss data collection and reporting system, develop a national disaster risk financing strategy, review the sustainability of the current catastrophe insurance program implemented by the government and enhance data sharing for insurance market development.
In the medium to long term the World Bank recommends Sri Lanka develop financial tools to support decision making, including a disaster risk model for Ministry of Finance and establish a National Disaster Reserve Fund as fast-disbursement mechanism for the financing of post-disaster operations.
The World Bank also said Sri Lanka should explore catastrophe risk insurance options for public assets and strengthen the agricultural insurance program.
(COLOMBO, July 03, 2017)