2015年-世界发展银行全球_Marshall_Islands___Disaster_Risk_Financing_and_Insurance_41页_4mb

Summary of the Marshall Islands Disaster Risk Financing and Insurance Note

Core Content

This document provides an overview of the disaster risk financing and insurance (DRFI) situation in the Marshall Islands, focusing on the country's vulnerability to natural disasters, existing financial tools, and the challenges faced in managing disaster-related expenditures. It also outlines options for improving the country's financial resilience against natural hazards.

Key Information

• Geography and Vulnerability
  The Marshall Islands consists of 29 atolls and five islands, with most of them having elevations less than 6 meters above sea level. The capital, Majuro, is particularly vulnerable to storm surges and tsunamis due to its low-lying nature.

  • The population is 53,158, with urban centers Majuro and Ebeye having populations of 28,000 and 9,614, respectively.
  • Ebeye has the highest population density in the Pacific, at 66,750 people per square mile.
  • In 2013, drought and flooding events demonstrated the country's extreme vulnerability to both slow-onset and sudden-onset disasters.

• Economic Impact

  • Between 1988 and 2008, 18 natural disasters affected around 12,700 people, with an estimated direct cost of $317 million.
  • Half of these were droughts, which have a significant impact on water security and food production.
  • The Marshall Islands is expected to face an average annual loss of $3 million due to earthquakes and tropical cyclones.
  • Over the next 50 years, there is a 50% chance of experiencing a loss exceeding $53 million and a 10% chance of exceeding $160 million.

• Financial Resilience and Tools

  • The government adopts an ex-ante approach to disaster financing, with limited resources available.
  • Contingency Budget: $200,000 annually.
  • Disaster Assistance Emergency Fund (DAEF): $100,000 annually, with the potential to be increased.
  • Pacific Catastrophe Risk Insurance Pilot: Provides up to $15.3 million in case of a disaster exceeding the attachment point, which is equivalent to over 500% of the contingency budget.
  • The total ex-ante funds available are $15.6 million, representing 44% of the 2013 recurrent budget.

• Post-Disaster Budget Mobilization

  • The Ministry of Finance plays a central role in post-disaster budget mobilization.
  • Ex-post financial measures such as budget reallocation and reprogramming take between one and two weeks, with cabinet approval required.
  • Interdepartmental reprogramming can occur within one or two days following disaster declaration.
  • Donor assistance is often used to supplement government resources, especially in cases where the contingency budget and DAEF are insufficient.

• Challenges

  • The government's financial response is constrained by limited staff and the need to manage multiple responsibilities.
  • The Compact of Free Association (CFA) provides annual economic assistance of around $45 million, but the funds are restricted to specific areas and cannot be reallocated.
  • Public debt stands at 55.9% of GDP, with 97% being external debt.

Main Views and Recommendations

• Current Practices

  • The government uses a combination of ex-ante and ex-post financial tools, including the DAEF and the Pacific Catastrophe Risk Insurance Pilot.
  • However, these tools are limited in scope and capacity, and the country is heavily reliant on donor support for post-disaster recovery.

• Options for Improvement

  • (a) Develop an integrated disaster risk financing and insurance strategy.
  • (b) Assess the domestic insurance market to understand the products available and their uptake.
  • (c) Conduct a quantitative analysis to evaluate the potential of contingent credit as a tool for post-disaster liquidity.
  • (d) Investigate the establishment of policies for financial assistance to disaster victims in remote communities.

Key Financial Instruments

Conclusion

The Marshall Islands is highly vulnerable to natural disasters, particularly tropical cyclones and droughts, due to its geographic and economic conditions. The current financial mechanisms are limited and often insufficient to meet the needs of post-disaster recovery. There is a clear need for an integrated disaster risk financing strategy and for exploring alternative financial instruments such as contingent credit and insurance to enhance financial resilience.