## Opening Remarks by Christine Lagarde at the 2018 High-Level Caribbean Conference _IMF News, November 26, 2018_ ## Source details **Canonical URL:** [Opening Remarks by Christine Lagarde at the 2018 High-Level Caribbean Conference](https://www.imf.org/en/news/articles/2018/11/26/sp112618-opening-remarks-by-christine-lagarde) ## Other formats - [Markdown version](/en/news/articles/2018/11/26/sp112618-opening-remarks-by-christine-lagarde/index.md) - [Structured JSON version](/en/news/articles/2018/11/26/sp112618-opening-remarks-by-christine-lagarde/index.json) - [Bundle manifest](/en/news/articles/2018/11/26/sp112618-opening-remarks-by-christine-lagarde/bundle-manifest.json) ## Bibliographic details - Published: November 26, 2018 --- ### Context and urgency - Recent disasters highlighted: - a massive earthquake and tsunami in Sulawesi, killing 2,000 people, injuring more, and destroying more than 70,000 homes. - Hurricanes Irma and Maria (2017) devastated parts of the Caribbean. - Hurricane Michael wreaked havoc on Florida. - Climate change described as “surely the greatest existential threat of our time,” with the UN Intergovernmental Panel on Climate Change indicating the threat is “more grave than we thought.” - Observations on vulnerability and scale of losses: - Caribbean islands are among the top-25 most vulnerable nations. - Disaster damage in the Caribbean is six times more than in larger states. - Hurricane Katrina generated losses of US$160 billion in 2005—about one percent of GDP. - In Dominica in 2017 damages after Hurricane Maria exceeded 200 percent of GDP. - Framing: “Building resilience to natural disasters and climate change in this region is a necessity, not a luxury.” ### Three pillars for building resilience - The speech identifies three complementary pillars: - Securing structural protection, through resilient infrastructure; adequate land use, zoning rules, and building codes; and early warning systems. - Financial protection, through insurance or other risk-sharing mechanisms to reduce the cost of damage done by disasters when they occur. - Emergency response, by ensuring rapid access to financing and contingency plans to help with recovery after a disaster. ### Potential gains from resilience investment - IMF research on ECCU countries estimates that investing in public capital resilient to natural disasters can increase potential GDP by 3-11 percent. ### Barriers to scaling resilience investment - Domestic constraints: - Many countries in the Caribbean have high public debt and limited fiscal space. - Cumbersome administrative procedures combined with capacity constraints complicate access to financing from climate funds. - Political economy challenges: governments sometimes shy away from long-term strategies that involve significant up-front costs with benefits that come much later. - International constraints: - The lion’s share of funding is for disaster assistance, not financing for adaptation. ### Proposed “Alliance for Resilience Building” - Core elements: - A collective effort to shift focus from post-disaster recovery to longer-term resilience building. - An alliance of all stakeholders, domestic and international, to mobilize needed resources based on credible strategies. - Countries take the lead: get their fiscal houses in order and develop an umbrella Disaster Resilience Strategy with input and support from the international financial institutions. - The strategy should be a well-designed and fully-costed resilience building plan, including for risk transfer, embedded in a sustainable multi-year macro-fiscal framework. - Such a strategy aims to generate credibility to entice low-cost and grant financing from development partners, climate funds, and international financial institutions. - Operational step proposed: - Use two pilot countries for which supporting work is already underway, including a Climate Change Policy Assessment (or CCPA), and deliberate on this approach during the conference. ### IMF role and ongoing initiatives - The IMF positions itself as “a reliable friend and partner” and lists initiatives to support resilience efforts: - (i) Helping build capacity and strengthen public financial management, to better manage fiscal resources and address disaster risks. The IMF’s Technical Assistance center in the Caribbean — CARTAC — has played a pivotal role in this effort. “And I want to thank Marie-Claude and her government for Canada’s recent pledge to support the IMF’s capacity development globally, and especially through its support for the Caribbean, including for CARTAC;” - (ii) Launched, together with the World Bank, the Climate Change Policy Assessments to assess country preparedness and identify needed reforms; - (iii) Working with the World Bank on the technical design of state contingent debt instruments, which could help ease short-term financing burdens on countries hit by natural disasters. “A note summarizing staff’s analysis has been distributed. I am also pleased that draft term sheets from the International Capital Markets Association for various instrument structures are now available for interested sovereigns and investors.” - (iv) Increased the annual access limits under our rapid credit facilities for countries hit by disasters. - The IMF remains open to hearing ideas on what more can be done, including in its lending toolkit. ### Closing message - A call for concrete proposals and collective action: “For when it comes to natural disasters and climate change, we are all in this together.” *Opening Remarks by Christine Lagarde at the 2018 High-Level Caribbean Conference* --- ## References - [Christine Lagarde](https://www.imf.org/en/About/senior-officials/Bios/christine-lagarde) - [United States and the IMF](http://www.imf.org/external/country/USA/index.htm) - [Speeches](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2018/11/26/sp112618-opening-remarks-by-christine-lagarde_