2015年-世界发展银行全球_Solomon_Islands___Disaster_Risk_Financing_and_Insurance_52页_9mb

Solomon Islands: Disaster Risk Financing and Insurance Summary

Core Content

The document provides an overview of disaster risk financing and insurance (DRFI) in the Solomon Islands, highlighting the country's vulnerability to natural disasters and the limitations of its current financial mechanisms for disaster response. It outlines key strategies and tools that could enhance financial resilience, emphasizing the need for better institutional preparedness and the integration of DRFI into national and regional frameworks.

Key Information

• Geographic and Environmental Context:
  The Solomon Islands is located in the Pacific Ring of Fire and is prone to both hydrometeorological (e.g., tropical cyclones, floods) and geophysical (e.g., earthquakes, tsunamis) disasters. The country has experienced frequent natural disasters, with over 111 events since 1980, affecting more than half a million people.

• Economic Impact:

  • Long-term average annual losses due to earthquakes or tropical cyclones are estimated at SI$145 million (US$20 million).
  • There is a 50% chance of experiencing a single event loss exceeding SI$1.7 billion (US$240 million) in the next 50 years.
  • A 10% chance of a single event loss exceeding SI$3.7 billion (US$520 million).
  • In 2014, flash flooding in Honiara and other regions caused estimated losses of SI$787.3 million (US$108.9 million), equivalent to 9.2% of GDP.

• Disaster Response Budgets:

  • The National Disaster Council (NDC) relief budget in 2013 was SI$2.2 million (US$305,250), and in 2014 it was SI$1.9 million (US$262,000).
  • These budgets are often quickly exhausted, as seen after the 2013 Santa Cruz earthquake and tsunami.
  • The probability of disaster losses exceeding the NDC budget is 77% annually, leading to reliance on donor support.

• Financial Tools and Mechanisms:

  • Ex-ante tools: Include the National Disaster Council Fund, Contingency Budget, and Contingent Credit.
  • Ex-post tools: Include Budget Reallocation, Donor Assistance (relief and reconstruction), Domestic Credit, and External Credit.
  • The National Disaster Council Fund, established in 1989, has not been appropriated since 2008 due to misuse and lack of oversight.
  • A contingency warrant was introduced in 2011 to manage unforeseen spending needs, but its allocation has decreased over time.

• Insurance Coverage:

  • The Solomon Islands participated in the Pacific Catastrophe Risk Insurance Pilot but discontinued it in the third season due to no payouts from the Santa Cruz earthquake and 2014 floods.
  • The pilot insurance is based on modeled outcomes rather than actual losses, allowing for quicker financial mobilization.
  • The country has limited domestic insurance coverage, and flood risk is not included in current insurance mechanisms.

• Post-Disaster Budget Execution:

  • The NDC is able to mobilize funds quickly, as demonstrated by its response to the 2013 Santa Cruz disaster, where it allocated SI$1 million (US$138,000) within a day.
  • However, delays in purchasing relief goods have occurred due to lack of awareness of the bid waiver process among MoFT staff.

• Recommendations and Options for Consideration:

  • Develop a post-disaster budget execution manual to improve awareness and efficiency.
  • Establish an integrated disaster risk financing and insurance strategy.
  • Explore the use of contingent credit and other DRFI instruments to ensure liquidity post-disaster.
  • Re-activate the National Disaster Council Fund or create a new mechanism to replace it.
  • Improve coordination with regional and international partners to enhance disaster preparedness and response.

Main Viewpoints

• The Solomon Islands faces significant exposure to natural disasters and requires more robust financial mechanisms to support disaster response and recovery.
• Current disaster response budgets are insufficient and can be quickly depleted, leading to increased reliance on donor support.
• The lack of awareness and understanding of post-disaster financial procedures, such as bid waivers, has caused delays in procurement.
• The use of modeled-based insurance mechanisms, such as the Pacific Catastrophe Risk Insurance Pilot, can provide faster financial support but is not yet widely utilized in the country.
• There is a need for institutional strengthening and the development of a comprehensive DRFI strategy to improve financial resilience.

Key Takeaways

• Vulnerability: High exposure to tropical cyclones and earthquakes, with significant economic and social impacts.
• Budget Limitations: Small and quickly exhausted disaster response budgets, leading to reliance on external funding.
• Institutional Gaps: Limited awareness of financial procedures, lack of a functioning National Disaster Council Fund, and insufficient use of insurance mechanisms.
• Recommendations: Strengthen financial preparedness through manuals, strategies, and the use of DRFI tools like contingent credit and parametric insurance.

Conclusion

The Solomon Islands needs to enhance its disaster risk financing and insurance systems to ensure timely and effective post-disaster financial support. This includes improving internal financial management, reactivating or creating new financial mechanisms, and fostering regional and international collaboration to build resilience against natural disasters.