2014年-世界发展银行全球_Coping_with_Losses___Options_for_Disaster_Risk_Financing_in_Brazil_86页_2mb

Summary of Coping with Losses: Options for Disaster Risk Financing in Brazil

Core Content

This report explores options for improving disaster risk financing (DRF) and insurance (DRI) in Brazil, drawing on international experiences and conducting a preliminary fiscal risk assessment. It emphasizes the need for a more integrated and strategic approach to managing the financial impacts of natural disasters, particularly in the context of Brazil's exposure to recurrent small-scale hydro-meteorological events.

Main Objectives

The study aims to:

• Stimulate dialogue on the fiscal impacts of natural disasters in Brazil
• Propose options for developing a broader DRFI strategy
• Strengthen the financial resilience of both Federal and local governments

Key Findings

Natural Hazard Exposure

• Brazil is frequently affected by hydro-meteorological disasters such as droughts, severe rainfall, and landslides.
• Urban areas, due to high population density and poor land use planning, are particularly vulnerable.
• Catastrophic events are less common but can have significant impacts when they occur in succession.

Fiscal Risk Assessment

• The total Average Annual Loss (AAL) is estimated at US$3.9 billion (R$8.9 billion).
• Assuming government liability is 30% to 40% of total costs, the public AAL is between US$1.2 billion (R$2.7 billion) and US$1.7 billion (R$3.9 billion).
• A 10-year return period event could result in public losses of up to US$3.7 billion (R$8.7 billion).
• A 15-year return period event may lead to total losses of up to US$12.8 billion (R$29.4 billion), with public costs reaching US$5.1 billion (R$11.7 billion).

Funding Gaps

• From 2006 to 2010, the average annual funding gap was R$1.4 billion, or 30% of the estimated government liability.
• These gaps exacerbate the socioeconomic impacts of disasters and hinder timely recovery.

Current Financial Management Practices

Federal Government

• Relies primarily on ex-post disaster financing mechanisms.
• Budget reallocation is the most common practice due to the insufficiency of annual budgeting.
• Multi-year reserves are not used at the national level.
• International assistance and contingent loans are occasionally used.
• Taxation and public spending are key sources of disaster financing.

State and Local Governments

• Some states have established their own disaster funds.
• Budgetary execution is often cumbersome, especially at the local level.
• Funding gaps for recovery and reconstruction are recurrent.

Disaster Insurance Market Overview

Agricultural Insurance

• The Federal Government of Brazil (GoB) has a subsidy program (PSR) to support private agricultural insurance.
• Penetration rates have increased significantly since 2003.
• Temporary cash transfers are used to support vulnerable populations, especially in agriculture and housing sectors.

Property and Microinsurance

• Property insurance is underdeveloped in Brazil.
• Microinsurance is not well established, limiting financial protection for low-income populations.
• Temporary cash transfers are a critical tool but require better understanding of contingent liabilities (AAL and PML) to improve cost-effectiveness.

Proposed Options for DRFI Strategy

1. Implementing a National Disaster Fund

   • This would help consolidate resources and improve financial preparedness.

2. Optimizing Subsidies and Temporary Cash Transfer Programs

   • Enhancing the PSR and other programs to ensure broader coverage and cost efficiency.

3. Improving Financial Risk Assessment and Catastrophe Risk Models

   • Conducting a more detailed fiscal risk assessment and developing catastrophe models to better inform budgetary planning.

4. Enhancing Disaster Data Management Systems

   • Strengthening damage and loss assessment procedures to provide accurate and timely data for informed decision-making.

Recommendations

• The Ministry of Planning should lead the operationalization of FUNCAP by finalizing standard operating procedures and funding flow arrangements.
• The Ministry of Finance should coordinate an assessment of subsidy programs for natural hazard insurance, particularly for agriculture.
• Temporary cash transfers should be better integrated into a risk pool to improve cost-effectiveness and financial resilience.
• Planning and finance institutions should consider state-level fiscal risk assessments and use risk metrics to guide transfers to local governments.
• The Ministry of National Integration should adopt a standardized damage and loss assessment methodology to support disaster response fund allocation and data collection for DRFI strategy development.

Conclusion

The report highlights the urgent need for a comprehensive DRFI strategy in Brazil to address the systematic underestimation of disaster impacts and improve financial resilience. It suggests that integrating disaster insurance, fiscal risk assessment, and improved data systems could significantly enhance the country's ability to respond to and recover from natural disasters.