KINGSTON, Jamaica, Tuesday July 17, 2018 – A new World Bank Report is suggesting that, on average, Jamaica would need about J$16 billion (US$121 million) annually to cover losses from natural disasters.
Of this amount, it is estimated that J$9 billion (US$67 million) would be required to address hurricane damage to public and private buildings.
Titled, ‘Advancing Disaster Risk Finance in Jamaica’, the report, which outlines proposals for the formulation of a country-specific comprehensive disaster risk finance (DRF) strategy, was officially launched during a ceremony at The Jamaica Pegasus hotel yesterday.
According to the World Bank, the document is envisioned to be used as a planning tool for the potential development of a comprehensive DRF strategy that would equip the Ministry of Finance and the Public Service with information and instruments to manage contingent liabilities posed by natural disasters.
Minister without Portfolio in the Ministry of Finance and the Public Service, Fayval Williams, welcomed the report, noting that it has laid out in great detail, a roadmap for Jamaica to follow.
“I greatly appreciate the work that went into the analysis. It was rigorous, it was practical and the roadmap is straightforward in its suggested implementation,” she said.
Williams further noted that the report would help the Government to put in place those mechanisms and processes that will support the budget needed for disaster risk financing.
“It would also help us to evaluate the various capital market options that can allow us as a Government to transfer that risk that we cannot and should not try to absorb,” she said.
The Minister noted that over the years, the capital market for disaster risk has been developing financial instruments to help countries deal with disaster.
She contended that the country is now “at that point where we seriously need to evaluate and implement a set of financial instruments that suit our needs and will provide resources for us to call on to assist with swift recovery”.
Williams argued that access to these resources is critical given the fact that hurricanes rob Jamaica of economic vitality and set the country back, on average, about 2.5 per cent gross domestic product (GDP) annually.
Citing research findings from the International Monetary Fund (IMF), she further pointed out that since 1950, more than 12,000 natural disasters have been registered globally. During that same period, the Caribbean has been hit by 324 natural disasters.
“Research shows that the economic impact of these 324 natural disasters in the Caribbean has been substantial, exceeding US$22 billion in cost over the period 1950 to 2016. We suffer about 38 per cent of the global damage from natural disasters,” she pointed out.
Williams thanked the World Bank team for helping to build the Government’s capacity in terms of knowledge base and in terms of the mechanism and systems that need to be put in place for disaster risk financing.
In the meantime, World Bank Country Manager for Jamaica, Galina Sotirova, said the report is the first building block for the development of this framework for disaster risk financing.
“The report is a result of three years of very close collaboration of the (World Bank Team) and the Ministry of Finance to analyse the gaps in mitigating natural disasters and related risks, and to develop customised solutions based on the priorities in the economic context in Jamaica,” she said.
She informed that this is the first in a series of reports that the World Bank will be preparing after last year’s hurricane season. Similar reports are being prepared for other countries in the Caribbean.