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disaster recovery

Cat DDOs: More than emergency lending for disaster relief

Ede Ijjasz-Vasquez's picture
Disasters can strike anywhere and anytime. As climate change intensifies, extreme weather events, for example, are on the rise around the world, and countries are increasingly seeking to improve both their physical and financial resilience to all kind of disasters. An important dimension of sustainability in urban and rural areas is resilience–resilience for the natural disasters of today and those of tomorrow.   

One way to better prepare for disasters is securing access to financial resources before a disaster strikes through financial instruments such as the Cat DDO. 

Cat DDO stands for “Catastrophe Deferred Drawdown Option.” It is an innovative contingent line of credit that can provide immediate liquidity to countries in the aftermath of a disaster resulting from an adverse natural event. The World Bank has made it available to countries since 2008, to make it possible for them to have quick access to financial resources upon the declaration of state of emergency in the aftermath of a disaster, following an adverse natural event and in accordance with local legislation. The funds that provide liquidity to the countries are preapproved based on a sound disaster risk management program and an adequate macroeconomic framework. 

[Read: Disasters, funds, and policy: Creatively meeting urgent needs and long-term policy goals]

Why are Cat DDOs an important disaster risk financing instrument for countries?
  • It serves as an early financing tool while funds from other sources such as government reallocations, bilateral aid, or reconstruction loans/credits become available.
  • It allows the countries to address the emergency without distracting resources from their social and development programs.
  • It enhances the countries’ financial capacity to prepare for disasters.
  • It also generates or consolidates a dialogue on disaster risk management between the countries and the World Bank to learn from experience and apply good practices.

What are some of the examples of “Cat DDOs in action”? How will this innovative tool evolve to better manage increasing disaster risks? Watch a video with World Bank Senior Director Ede Ijjasz-Vasquez (@Ede_WBG) and Senior Disaster Risk Management Specialist Armando Guzman to learn more. 


 

How can we help countries share their own development knowledge? Insights from Japan

Ede Ijjasz-Vasquez's picture
To help clients achieve their development objectives, the World Bank has established knowledge-sharing "hubs" in countries that have gained valuable experience from dealing with their own challenges. That is the rationale behind the creation of a Disaster Risk Management (DRM) Hub and Tokyo Development Learning Center (TDLC) in Japan, a country that has developed unparalleled expertise in disaster resilience, quality infrastructure, and sustainable urban development. In this video, Keiko Sakoda Kaneda (DRM Hub) and Daniel Levine (TDLC) elaborate on some of the key elements of their work program, and explain how they collaborate with development partners from around the world.

A Profound Sense of Place – The Intangibles of City Life in New Orleans

Chandan Deuskar's picture

City Street, New Orleans, LA, USAA recent learning trip to New Orleans by the East Asia and Pacific Transport, Urban and Disaster Risk Management team introduced the unique charms of this city to many of us for the first time. Anyone who has been to New Orleans will remember the city for its historic but lively French Quarter, its living jazz tradition, with bands of talented local musicians playing for tips in the narrow streets, its Mardi Gras floats, its Cajun food, the oldest continually operating streetcar system in the world, and the varied history of the city that has resulted in its distinct Creole culture. As Dave Roberts, a local tour guide, explains to tourists, this was where the classical music tradition of the French colonialists came into contact with the pulsating African rhythms of freed slaves escaping to Louisiana from Haiti. The fact that jazz music was consequently born in New Orleans “was not a coincidence,” he says. “Few things are.”

Everywhere we went in New Orleans, we heard painful stories of those who had lived through Hurricane Katrina in 2005. But what was striking was the pride that the residents of New Orleans have in their city and their determination to rebuild it. As my colleague Artessa Saldivar-Sali describes, city officials and the US Army Corps of Engineers have dedicated themselves to strengthening the city’s defenses in order to ensure that the next time the city is hit, it is better prepared. Well-educated New Orleanians and outsiders have come to work at the city redevelopment authority, the disaster preparedness agency, and community-based affordable housing organizations. These are people who could easily abandon New Orleans for well-paid private sector jobs in other US cities but who have chosen instead to use their talents in aid of the poor and vulnerable and towards the greater good of their city.