{ "title": "IMF Executive Board Discusses Building Resilience in Developing Countries Vulnerable to Large Natural Disasters", "publication": "IMF News, June 26, 2019", "sourceUrl": "https://www.imf.org/en/news/articles/2019/06/25/pr19241-exec-board-discusses-building-resilience-developing-countries-vulnerable-natural-disasters", "canonical": "https://www.imf.org/en/news/articles/2019/06/25/pr19241-exec-board-discusses-building-resilience-developing-countries-vulnerable-natural-disasters", "overlayPath": "/en/news/articles/2019/06/25/pr19241-exec-board-discusses-building-resilience-developing-countries-vulnerable-natural-disasters/index.md", "summary": "Press Release No. 19/241; published June 26, 2019.", "publishDate": "2019-06-26", "sections": [ { "heading": "Background and context", "content": "- Press Release No. 19/241; published June 26, 2019. \n- Media relations contact: PRESS OFFICER: Maria Candia; Phone: +1 202 623-7100; Email: MEDIA@IMF.org.\n- On May 1, 2019, the Executive Board discussed an IMF staff paper on building resilience to large natural disasters and options for managing associated risks in vulnerable developing countries.\n- Recent large disasters cited:\n - Cyclone Idai (March 2019) — caused significant loss of life and widespread economic disruption in Mozambique and neighboring countries.\n - Hurricane Maria (September 2017) — caused damage to property and infrastructure estimated at some 200 percent of GDP in Dominica.\n- Observations:\n - Frequency and intensity of natural disasters are projected to increase over time with climate change, increasing economic and social impacts.\n - Many disaster-vulnerable countries, particularly small states, underinvest in resilience due to capacity constraints, large upfront costs, and limited fiscal space.\n - International financial institutions and development partners provide support, but domestic institutional capacity often limits countries’ ability to leverage available resources." }, { "heading": "Staff recommendations and proposed framework", "content": "- IMF staff paper recommends development of comprehensive disaster resilience strategies (DRS) in consultation with development partners and other stakeholders.\n- Core elements of a DRS:\n - Grounded in a clear diagnostic of disaster vulnerabilities.\n - Rest on three pillars: building structural resilience, financial resilience, and post-disaster/social resilience.\n - Support ex-ante planning, coordinate partner actions before and after disasters, and help catalyze donor support.\n- Role of institutions:\n - IMF: leverage expertise in designing macroeconomic policies and frameworks; support resilience building in operational work and capacity development.\n - World Bank and other development banks: assist in identifying and assessing disaster vulnerabilities and prioritizing investment needs." }, { "heading": "Executive Board assessment — key findings", "content": "- Directors agreed natural disasters can have significant and long‑lasting effects on economic well‑being, particularly in small, fragile, and low‑income states.\n- Directors noted weather‑related shocks’ frequency and intensity are expected to increase with climate change.\n- Benefits of resilience policies:\n - Targeted infrastructure investments and effective use of financial instruments can mitigate social and economic impacts.\n- Incorporating disaster risk into macroeconomic management:\n - Directors agreed this is important where risks of large‑scale natural disasters are significant.\n - Fund can help assess trade‑offs between development needs, rising debt vulnerabilities, and benefits of ex ante resilience building.\n - Most Directors favored extending the Fund’s approach to include slower‑onset disasters.\n- Three‑pillar approach:\n - Welcomed as a useful framework informed by the Sendai Framework for Disaster Risk Reduction and World Bank work on disaster risk management and insurance strategies.\n- Capacity constraints:\n - Many small, fragile, and low‑income countries face significant capacity constraints that impair effective use of external support.\n - Fund and World Bank are well placed to assist in overcoming capacity gaps.\n - Government ownership is crucial.\n- National disaster resilience strategy (DRS):\n - Directors saw merit in countries developing a national DRS with international support.\n - IMF could lead on macroeconomic policy frameworks reflecting disaster costs and returns from resilient investment and identifying fiscal actions.\n - World Bank and development banks could lead on vulnerability assessment and investment prioritization.\n - Need for close IMF–World Bank collaboration; recognition of Bank’s core expertise in key areas.\n - A DRS would provide a roadmap for policy design and sequencing, facilitate donor coordination, and could catalyze higher levels of financial support from bilateral donors, climate funds, and other sources.\n - Development of DRS would benefit from peer learning and experience‑sharing.\n- Financial resilience instruments:\n - Directors emphasized greater use of risk‑transfer instruments in government measures while noting challenges in developing insurance markets with reasonable premium levels relative to expected annual payouts.\n - Welcomed donor support for insurance market development and risk pooling.\n - Broad support for further Fund–World Bank work on state‑contingent debt instruments’ role in resilience building.\n- Fund roles and tools:\n - Fund has a valuable role in surveillance and capacity building to support resilience.\n - A coherent resilience strategy should fit within a medium‑term macroeconomic policy framework consistent with maintaining debt sustainability, including under adverse shocks.\n - Staff could analyze economic impacts of disasters and trade‑offs between public investment and debt accumulation.\n - Directors saw the Fund’s lending toolkit as sufficiently flexible to provide support for disaster‑vulnerable countries facing a BoP need, but most saw scope to increase access limits and to use the toolkit in non‑traditional ways to support resilience‑building.\n - Encouraged giving special attention to disaster‑prone countries in the upcoming FSAP Review and Comprehensive Surveillance Review.\n- Diagnostics and assessments:\n - DRS should be based on a robust diagnostic of risks and vulnerabilities, with a pragmatic approach in coordination with the World Bank.\n - Directors asked for a full assessment of the Climate Change Policy Assessments being piloted in a handful of small countries, in collaboration with the World Bank.\n- Division of labor and coordination:\n - Building resilience extends to areas where the Fund lacks in‑house expertise; effective support requires close collaboration with other institutions.\n - Directors called for a clear division of labor based on respective mandates among the Fund, multilateral development banks, and other agencies." }, { "heading": "Implications and next steps highlighted by Directors", "content": "- Promote country ownership of DRS and facilitate coordination of donor support.\n- Strengthen IMF–World Bank collaboration on diagnostics, capacity building, and policy sequencing.\n- Analyze and expand appropriate financial instruments, including risk‑transfer mechanisms and state‑contingent debt instruments.\n- Assess and pilot Climate Change Policy Assessments as potential diagnostics for national authorities.\n- Consider adjustments to Fund lending access limits and non‑traditional uses of the lending toolkit to support resilience-building.\n\nIMF Executive Board Discusses Building Resilience in Developing Countries Vulnerable to Large Natural Disasters (Press Release No. 19/241), June 26, 2019.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Dominica and the IMF\n- Republic of Mozambique and the IMF\n- Press Releases\n- PRESS CENTER\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2019/06/25/pr19241-exec-board-discusses-building-resilience-developing-countries-vulnerable-natural-disasters" } ], "bullets": [ "[Markdown version](/en/news/articles/2019/06/25/pr19241-exec-board-discusses-building-resilience-developing-countries-vulnerable-natural-disasters/index.md)", "[Structured JSON version](/en/news/articles/2019/06/25/pr19241-exec-board-discusses-building-resilience-developing-countries-vulnerable-natural-disasters/index.json)", "[Bundle manifest](/en/news/articles/2019/06/25/pr19241-exec-board-discusses-building-resilience-developing-countries-vulnerable-natural-disasters/bundle-manifest.json)", "Published: June 26, 2019", "Press Release No. 19/241; published June 26, 2019.", "Media relations contact: PRESS OFFICER: Maria Candia; Phone: +1 202 623-7100; Email: MEDIA@IMF.org.", "On May 1, 2019, the Executive Board discussed an IMF staff paper on building resilience to large natural disasters and options for managing associated risks in vulnerable developing countries.", "Recent large disasters cited:", "Observations:", "IMF staff paper recommends development of comprehensive disaster resilience strategies (DRS) in consultation with development partners and other stakeholders.", "Core elements of a DRS:", "Role of institutions:", "Directors agreed natural disasters can have significant and long‑lasting effects on economic well‑being, particularly in small, fragile, and low‑income states.", "Directors noted weather‑related shocks’ frequency and intensity are expected to increase with climate change.", "Benefits of resilience policies:", "Incorporating disaster risk into macroeconomic management:", "Three‑pillar approach:", "Capacity constraints:", "National disaster resilience strategy (DRS):", "Financial resilience instruments:", "Fund roles and tools:", "Diagnostics and assessments:", "Division of labor and coordination:", "Promote country ownership of DRS and facilitate coordination of donor support.", "Strengthen IMF–World Bank collaboration on diagnostics, capacity building, and policy sequencing.", "Analyze and expand appropriate financial instruments, including risk‑transfer mechanisms and state‑contingent debt instruments.", "Assess and pilot Climate Change Policy Assessments as potential diagnostics for national authorities.", "Consider adjustments to Fund lending access limits and non‑traditional uses of the lending toolkit to support resilience-building.", "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)", "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)", "[Dominica and the IMF](http://www.imf.org/external/country/DMA/index.htm)", "[Republic of Mozambique and the IMF](http://www.imf.org/external/country/MOZ/index.htm)", "[Press Releases](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2019/06/25/pr19241-exec-board-discusses-building-resilience-developing-countries-vulnerable-natural-disasters/index.md", "json": "/en/news/articles/2019/06/25/pr19241-exec-board-discusses-building-resilience-developing-countries-vulnerable-natural-disasters/index.json", "bundleManifest": "/en/news/articles/2019/06/25/pr19241-exec-board-discusses-building-resilience-developing-countries-vulnerable-natural-disasters/bundle-manifest.json" }, "generatedAtUtc": "2026-09-25T22:54:30.369Z" }