PROGRAM OF INDICATORS OF DISASTER RISK AND RISK MANAGEMENT IN THE AMERICAS. Review and Update. Omar D. Cardona

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1 PROGRAM OF INDICATORS OF DISASTER RISK AND RISK MANAGEMENT IN THE AMERICAS Review and Update Omar D. Cardona IRDR SC Member National University of Colombia ERN Evaluación de Riesgos Naturales - América Latina -

2 INDICATORS OF DISASTER RISK and RISK MANAGEMENT Program for the Americas IDB IDEA ERN

3 SYSTEM OF NATIONAL INDICATORS (IDB IDEA ERN ) DDI LDI PVI RMI : DISASTER DEFICIT INDEX : LOCAL DISASTER INDEX : PREVALENT VULNERABILITY INDEX : RISK MANAGEMENT INDEX

4 Disaster Risk Management needs of risk assessment, and this means to take into account not only the expected physical damage (such as victims and economic losses), but also social, and governance aggravating factors. we need to consider both comprehensive hard and soft aspects, from a multidisciplinary perspective, related to the potential impact of the events and the capacity of society to cope with that impact.

5 Why a System of Indicators? It is necessary to reveal risk indifferentways to the decision makers and stake holders. The drivers of risk must be identified to be able assessing the effectiveness of both corrective and prospective mitigation measures. The follow up of risk is an unavoidable step to evaluate the performance ofrisk reduction.

6 OBJECTIVES Depiction of risk and risk management at national scale, allowing the identification of essential economic and social characteristics and a comparison of these aspects among different countries. Access to information to national decisionmakers to understand risk and propose adequate disaster risk management policies and actions.

7 DISASTER DEFICIT INDEX -DDI- Represents country risk from a macroeconomic and financial perspective in case of possible catastrophic events. This requires an estimation of the critical impact during a given exposure time and the financial ability to cope such situation. 7

8 Hazard Daño 100% Vulnerability 90% 80% 70% 60% TIPO 1 50% TIPO 2 40% TIPO 3 30% TIPO 4 20% TIPO 5 10% 0% Intensidad = Risk Expected intensity for the MCE Damage funtions for exposed assets Potencial damages x Economic value DDI MCE loss Economic Resilience Description Insurance and reinsurance payments Reserve funds for disasters Aid and donations New taxes Budgetary reallocation External credit Internal credit Indicators F P 1 F P 2 F P 3 F P 4 F P 5 F P 6 F P 7 8

9 DISASTER DEFICIT INDEX -DDI- 16% 14% PML [%] 12% 10% 8% 6% 4% Return period (years) Periodo de retorno [años] Deducible 0% Deducible 5% Deducible 3%

10 DISASTER DEFICIT INDEX DDI PML

11 DISASTER DEFICIT INDEX DDI CE - DDI IS DDI ' Expected annual loss Capital expenditure DDI' L E P y P C DDI '' Expected annual loss Intertemporal Surplus DDI '' L I P y P S As higher the DDI lower the capacity of a country to cope with future disasters. It implies inevitable increasing of the debt. 11

12 DISASTER DEFICIT INDEX DDI CE - Pure premium L y, 2008 ($USD millions) 12

13 Reflections Extreme disasters involve a high potential deficit or non explicit contingent liabilities which can mean a high potential impact to the fiscal sustainability due to the insufficiency of funds. The lack of probabilistic risk evaluations due to disasters have implications: The reconstruction cost is not assessed in advance. The main motivation to promote risk mitigation and reduction is missing 13

14 Recommendations Economic, financial and planning analysts can evaluate the budget problem and the need to take into account these figures in the financial planning. It is evident the need to invest in the physical vulnerability reduction to reduce the potential losses. Property insurance, reserve funds strengthening and the need to negotiate contingent credits are supported to improve resilience. 14

15 LOCAL DISASTER INDEX -LDI - It attempts to capture the social and environmental risk problems as result from frequent small scale events that affects in a chronic way the sub national and local levels, particularly the lower income and fragile socio economic income groups and generating a detriment effect to the country development. 15

16 DesInventar (La RED) Database with records of events and effects at municipal level. They were grouped in four types of events, that colloquially are termed: Landslides and debris flows, seismo tectonic, floods and storms, and other events. 16

17 Estimation of LDI Type of event Relative concentration of effects Effects incidence Índex for each effect in the country Landslides and debris flows By type of event By type of event seismo-tectonic floods and storms Location Coefficient Deaths Deaths LDI Deaths Persistence Index People affected People affected LDI Affected LDI Losses Losses LDI Losses other In each municipality For all the country 17

18 LOCAL DISASTER INDEX -LDI - LDI LDI Deaths LDI Affected LDI Losses A higher relative value of the index, a greater uniformity of the magnitude and distribution of the effects of various hazards among municipalities. Dispersion and persistence of effects at local level, reflects increasing of vulnerability and environmental degradation LDI reflects the persistency of the effects caused by the different types of events on livelihoods and local development, perpetuating the poverty. 18

19 LOCAL DISASTER INDEX LDI 19

20 Reflection Impact of small and recurrent disasters is notable in all the countries. This represents accumulative dramatic effects on more socially and economically vulnerable populations. 20

21 PREVALENT VULNERABILITY INDEX -PVI - This index characterizes predominating vulnerability conditions reflected in exposure in prone areas, socioeconomic fragility and lack of social resilience; aspects that favor the direct impact and the indirect and intangible impact in case of the occurrence of a hazard event. 21

22 PREVALENT VULNERABILITY INDEX -PVI - PVI PVI Exposure PVI Fragility PVI Lack of Resilience / 3 PVI reflects: Susceptibility due to the level of physical exposition of goods and people that favors direct impact in case of hazard events. Social and economic conditions that favor indirect and intangible impact. Lack of capacity to anticipate, to absorb consequences, to efficiently respond and to recover. It allows to identify aspects to address the development actions. 22

23 Indicators of exposure/susceptibility ES1. Population growth, average annual rate, % ES2. Urban growth, average annual rate, % ES3. Population density, people (5 Km 2 ) ES4. Poverty population below US$ 1 per day PPP ES5. Capital stock, million US$ dollar/1000 km 2 ES6. Imports and exports of goods and services, % GDP ES7. Gross domestic fixed investment, % of GDP ES8. Arable land and permanent crops, % land area. 23

24 Indicators of socio-economic and environmental fragility SF1. Human Poverty Index, HPI 1. SF2. Dependents as proportion of working age population SF3. Social disparity, concentration of income measured using Gini index. SF4. Unemployment, as % of total labour force. SF5. Inflation, food prices, annual % SF6. Dependency of GDP growth of agriculture, annual % SF7. Debt servicing, % of GDP. SF8. Human induced Soil Degradation (GLASOD). 24

25 Indicators of resilience (lack of) LR1. Human Development Index, HDI [Inv] LR2. Gender related Development Index, GDI [Inv] LR3. Social expenditure; on pensions, health, and education, % of GDP [Inv] LR4. Governance Index (Kaufmann) [Inv] LR5. Insurance of infrastructure and housing, % of GD [Inv] LR6. Television sets per 1000 people [Inv] LR7. Hospital beds per 1000 people [Inv] LR8. Environmental Sustainability Index, ESI [Inv] 25

26 PREVALENT VULNERABILITY INDEX PVI

27 PREVALENT VULNERABILITY INDEX PVI 27

28 Reflections The PVI allows to identify the aspects which express situations, causes, susceptibilities, weaknesses or relative absences affecting the country, region or locality under study, and which would benefit from risk reduction actions. The risk management policy should be put in the context of planning and priorities of each country and link it with development planning, land use planning and budget execution. 28

29 RISK MANAGEMENT INDEX -RMI - The RMI brings together a group of indicators that measures a country s risk management performance. These indicators reflect the organizational, development, capacity and institutional actions taken to reduce vulnerability and losses, to prepare for crisis and to recover efficiently from disasters. 29

30 RISK MANAGEMENT INDEX -RMI - RMI RMI RI RMI RR RMI DM RMI FP / 4 Risk identification (RI) (individual perceptions, social representation and objective assessment of risk); Risk reduction (RR) (prevention mitigation); Disaster management (DM) (response and recovery); and, Governance and financial protection (FP), (institutionalization and risk transfer). 30

31 Indicators of risk identification RI1. Systematic disaster and loss inventory. RI2. Hazard monitoring and forecasting. RI3. Hazard evaluation and mapping. RI4. Vulnerability and risk assessment. RI5. Public information and community participation. RI6. Training and education on risk management. 31

32 Indicators of risk reduction RR1. Risk consideration in land use and urban planning. RR2. Hydrographical basin intervention and environmental protection. RR3. Implementation of hazard event control and protection techniques. RR4. Housing improvement and human settlement relocation from prone areas. RR5. Updating and enforcement of safety standards and construction codes. RR6. Reinforcement and retrofitting of public and private assets. 32

33 Indicators of disaster management DM1. Organization and coordination of emergency operations. DM2. Emergency response planning and implementation of warning systems. DM3. Endowment of equipments, tools and infrastructure. DM4. Simulation, updating and test of inter institutional response. DM5. Community preparedness and training. DM6. Rehabilitation and reconstruction planning. 33

34 Indicators of governability and financial protection FP1. Interinstitutional, multisectoral and decentralizing organization. FP2. Reserve funds for institutional strengthening. FP3. Budget allocation and mobilization. FP4. Implementation of social safety nets and funds response. FP5. Insurance coverage and loss transfer strategies of public assets. FP6. Housing and private sector insurance and reinsurance coverage. 34

35 RISK MANAGEMENT INDEX RMI

36 RISK MANAGEMENT INDEX -RMI - 36

37 Reflection A notable difference can be observed between the countries that present greatest risk management performance with respect to those that have not achieved significant advances. Nevertheless, even in the case of the countries with greatest RMI values, it is concluded that risk management is only incipient or starts to be significant in the best cases. 37

38 Program of Indicators of Disaster Risk and Risk Management for the Americas IDB IDEA ERN ERN

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