Scope of Disaster Risk Financing Should be Expanded – Ambassador Shirley


Jamaica’s Ambassador to the United States, Professor Gordon Shirley, has said that while Caribbean States have exercised considerable political will in jointly developing instruments for financing disaster risk mitigation, there is an urgent need for more to be done.
Addressing a seminar on ‘Financial Instruments in Disaster Risk Management’, in Washington on May 4, Professor Shirley called for a partnership with the international donor community and Caribbean civil society, to improve the scope and relevance of catastrophe risk management and financing in the region. Mr. Shirley emphasized the need to expand risk financing arrangements to cover sectoral vulnerabilities.
“In the specific context of Caribbean countries, crop insurance is of particular importance. The regional risk pooling and access to international reinsurance markets, possibly under the Caribbean Catastrophic Risk Insurance Facility, make this facility an ideal candidate to pursue the establishment of a viable crop insurance programme in the region. This is a special case for expanding the risk coverage of the facility to account for climate volatility, which is of particular relevance for Caribbean territories exposed to severe periods of drought and/or severe flooding,” he said.
The Ambassador stressed that Caribbean states needed to step up their efforts at legislative and institutional reforms, aimed at strengthening the incentive structure for risk mitigation.
He lauded the recent establishment of the Caribbean Catastrophic Risk Insurance Facility (CCRIF). “This instrument, developed by the countries of the Caribbean under the leadership of the Minister of Finance in Jamaica, Dr. Omar Davies, working in association with the World Bank, is designed to provide client governments in the region with immediate financial liquidity in case they are hit by an adverse natural event,” the Ambassador said.
“Created with the assistance of donor countries that have contributed to the initial capitalization, the facility allows the small states of the region to pool their risk in order to lower the cost of coverage,” he added. According to the Ambassador, “even if the basic risks were reduced to zero, the current Caribbean Catastrophic Risk Insurance Facility proposal suffers from another important drawback, which is that high-impact natural disasters do not necessarily come solely in the form of severe hurricanes and earthquakes. Rather, as we have seen in our region, floods and droughts can have as great a negative impact as a hurricane or an earthquake.” He expressed the hope that multi-lateral partners would continue to provide the technical, analytical and financial resources necessary to assist Caribbean constituents in identifying and implementing workable solutions to specific problems.
The seminar was organized by the Inter-American Development Bank (IDB) at its headquarters in Washington.

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