2012年-世界发展银行全球_Fiscal_Risk_Assessment_of_Contingent_Liabilities_Associated_with_Natural_Disasters___The_Colombian_Experience_11页_1mb

Summary of the Fiscal Risk Assessment of Contingent Liabilities Associated with Natural Disasters: The Colombian Experience

Core Content

This document outlines the fiscal risk assessment and management of contingent liabilities in Colombia, with a particular focus on natural disasters. It highlights the legal and institutional frameworks, the evolution of policies, and the financial implications of natural disaster-related contingencies. The assessment is part of a broader initiative to develop a sovereign disaster risk financing strategy, supported by the World Bank and Switzerland's State Secretariat for Economic Affairs (SECO).

Main Points and Key Information

Legal and Institutional Framework

• Law 448 of 1998 mandates that the Colombian government, including territorial and decentralized entities, must include funds in their budgets to cover potential losses from contingent liabilities.
• The Ministry of Finance and Public Credit (MHCP) is responsible for developing and enforcing methodologies for estimating contingent liabilities.
• The General Directorate of Public Credit and the National Treasury oversees the estimation and management of contingencies.
• The "Fund for Contingencies of Government Entities" was established to manage risks faced by local governments.
• The National Plan for Disaster Prevention and Assistance (PNPAD), enacted in 1998, outlines four strategic lines: risk identification and monitoring, risk reduction, institutional strengthening, and outreach and training.
• In 2003, Law 819 was passed, reinforcing budgeting, fiscal discipline, and transparency.

Contingent Liabilities from Different Sources

• Legal actions are the largest source of contingent liabilities, with an annual expected value of US$18.6 billion (7.46% of GDP) for the period 2011–2021.
• Public credit operations contribute US$56 million annually (0.02% of GDP).
• Infrastructure development projects under PPP contribute US$26 million annually (0.01% of GDP).
• Natural disasters are the second most important source, with an annual expected liability of US$490 million (0.20% of GDP), representing COP$1.07 trillion.

Fiscal Exposure and Risk Metrics

• Total estimated fiscal exposure from natural disasters in Colombia from 1970–2000 was US$4.5 billion, with 28,258 deaths and 395,347 structures affected.
• Probable Maximum Losses (PMLs) for natural disasters are calculated for different return periods:
  • 100-year PML: US$2.976 billion (1.19% of GDP)
  • 250-year PML: US$4.417 billion (1.77% of GDP)
  • 500-year PML: US$5.655 billion (2.26% of GDP)
• The Disaster Deficit Index (DDI), which measures the gap between fiscal exposure and economic resilience, indicates that Colombia has insufficient economic resilience to adequately respond to major disasters, especially for 100-year events (DDI = 1.28).

Policy Reforms and Initiatives

• A paradigm shift from ex-post disaster assistance to ex-ante disaster risk management has been initiated.
• The Government has contracted studies on risk transfer, insurance, and fiscal discipline.
• A CONPES document (2004) facilitated the implementation of a 10-year program to reduce fiscal vulnerability to natural disasters, with an external credit line of US$260 million authorized.
• The Government has made progress in the fiscal accounting and management of contingent liabilities, although the formal accounting of natural disaster-related liabilities is still in development.

Future Steps

• A formal agenda for a sovereign disaster risk financing and insurance strategy has been developed, with support from the World Bank, GFDRR, and SECO.
• Key activities include:
  • Further assessing the contingent liability of the Government using catastrophe risk modeling tools.
  • Designing a sovereign disaster risk financing strategy based on risk retention and transfer.
  • Developing a catastrophe risk insurance program for public assets.
  • Promoting property catastrophe risk insurance for private dwellings.
• Outputs are expected by 2015, including the expansion of risk pooling mechanisms to private assets.

Conclusion

Colombia has made significant strides in institutionalizing the management of contingent liabilities, particularly those from public credit operations, infrastructure development projects, and legal actions. However, natural disasters remain a major fiscal risk, with a second-largest contingent liability and a DDI indicating insufficient economic resilience. The Government is working on a comprehensive strategy to improve disaster risk financing and insurance, with a focus on risk transfer mechanisms and the development of a robust fiscal framework to manage these risks proactively.