## Small States Confront Big Challenges with Natural Disasters and Climate Change

_IMF Blog, December 22, 2016_

## Source details

**Canonical URL:** [Small States Confront Big Challenges with Natural Disasters and Climate Change](https://www.imf.org/en/blogs/articles/2016/12/22/small-states-confront-big-challenges-with-natural-disasters-and-climate-change)

## Other formats

- [Markdown version](/en/blogs/articles/2016/12/22/small-states-confront-big-challenges-with-natural-disasters-and-climate-change/index.md)
- [Structured JSON version](/en/blogs/articles/2016/12/22/small-states-confront-big-challenges-with-natural-disasters-and-climate-change/index.json)
- [Bundle manifest](/en/blogs/articles/2016/12/22/small-states-confront-big-challenges-with-natural-disasters-and-climate-change/bundle-manifest.json)

## Bibliographic details
- Authors: Tao Zhang
- Published: December 22, 2016

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### Exposure and vulnerabilities
- Small states (economies with a population of less than 1.5 million) are far more vulnerable than other countries to natural disasters and climate change.
- Many small states are located in high risk locations—zones subject to hurricanes, cyclones, and earthquakes (examples cited: Vanuatu, Samoa, Dominica, St. Lucia, St. Vincent and the Grenadines).
- Three out of four small states are islands or widely dispersed multi-island states and are highly vulnerable to the rising sea levels associated with climate change.
- Administrative capacity constraints: small countries tend to have less income and fewer public employees for risk management programs.
- For large land-area countries, a disaster can severely impact one region but leave large parts of the economy untouched; for small islands, virtually all crops, housing, and other infrastructure can be destroyed, magnifying the disaster relative to the size of the economy and its resources.

### Quantified impacts and fiscal consequences
- On average, the annual cost of disasters for small states is more than four times that for larger countries, in relation to GDP.
- The average annual cost of disasters for small states is nearly 2 percent of GDP.
- Nearly one in ten disasters causes damage amounting to more than 30 percent of GDP, compared to fewer than one in a hundred for larger states.
- The greater exposure to natural disasters worsens public finances, reduces investment and growth prospects, and increases poverty.
- One-third of small states will be highly vulnerable to climate change within a generation.
- Historical use of IMF disaster-related financing by small states: Dominica accessed these facilities four times over the period 2008-2015; Vanuatu tapped funds in 2015 following Cyclone Pam; Samoa borrowed from both the Rapid Credit Facility and Rapid Financing Instrument in 2009 and in 2013.

### Building resilience: proactive steps and investments
- Recommended country-level actions:
  - Identify and quantify key aspects that make them vulnerable.
  - Invest in risk reduction infrastructure and projects.
  - Develop contingency action plans and financing arrangements for risks they cannot avoid.
- Macroeconomic policy roles:
  - Design frameworks for managing the budget, public investments, and public borrowing related to disaster risk management.
  - Mitigate carbon emissions through carbon taxation and energy subsidy reforms.
  - Efficiently manage costly public risk reduction investments to adjust to climate change.
- The IMF can share best practices and build policymakers’ capacity in these areas (example: Pacific Financial Technical Assistance Center work in Suva, Fiji).

### IMF financing instruments and institutional support
- When disaster strikes, countries have recourse to IMF financing: the Rapid Credit Facility and Rapid Financing Instrument provide quick access to financing following disasters; small states have already used these facilities.
- The IMF is looking to further strengthen support to small states through these financing instruments.
- Current annual borrowing limits for these facilities are small in relation to the disasters these countries can potentially face.
- The IMF Executive Board recently indicated that it would consider higher access limits for countries subject to particularly large disasters starting in early 2017.
- The IMF is ready to conduct pilot assessments of the macroeconomic aspects of climate change policies of small states to showcase policy efforts and improve access to global climate funding.
- The IMF will continue to communicate and collaborate closely with the World Bank and other organizations with critical expertise on natural disasters and climate change.

### Commitment and outlook
- Given the utter unpredictability of natural disasters, the IMF is committed to be agile in its response to members’ changing needs.

*Tao Zhang — December 22, 2016*

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## Content in this bundle

- **小型国家面临自然灾害和气候变化的重大挑战; IMF博客**
  - [小型国家面临自然灾害和气候变化的重大挑战; IMF博客 (Markdown version)](/external/chinese/np/blog/2016/122216c.pdf.md){rel="alternate" type="text/markdown"}
  - [小型国家面临自然灾害和气候变化的重大挑战; IMF博客 (PDF)](/external/chinese/np/blog/2016/122216c.pdf){rel="external" type="application/pdf"}

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## References

- [new study](http://www.imf.org/external/pp/longres.aspx?id=5079)
- [Rapid Credit Facility](http://www.imf.org/external/np/exr/facts/rcf.htm)
- [Rapid Financing Instrument](http://www.imf.org/external/np/exr/facts/rfi.htm)

_Source: https://www.imf.org/en/blogs/articles/2016/12/22/small-states-confront-big-challenges-with-natural-disasters-and-climate-change_