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Budget-strapped cities are creating financing—out of thin air

Luis Triveno's picture

Photo: Jonathan O'Reilly / Shutterstock

The world is urbanizing fast200,000 people are moving to cities every day in search of homes, jobs, as well as education and healthcare services for their families. Supporting this influx with proper infrastructure and services for water, sanitation, transport, and green spaces will require an estimated $1 trillion each year.
 
Given the difficulties of further increasing the tax burden or the level of public debt, it’s time for cities to think more creatively about alternative sources of funding.

Not willing to wait for their national governments to bless them with scarce infrastructure funds, innovative mayors have figured out how to squeeze a new source of urgently needed capital out of thin air, literally.

Ideas Box: the library that promotes literacy and builds disaster resilience—a Q&A

Barbara Minguez Garcia's picture


Over the last two weeks, we’ve witnessed three hurricanes in the Caribbean and Gulf of Mexico as well as a magnitude 8.1 earthquake in Mexico, killing people and destroying homes. They serve as a reminder that natural hazards pose a greater threat to our lives and livelihoods than we may think.

Dealing with rising disaster risks requires greater efforts with smarter approaches—ones that can help vulnerable people and communities better prepare for, and recover from, disasters. Libraries Without Borders (BSF), an international organization that expands access to information, education, and cultural resources to vulnerable people around the world, knows that very well.

In 2010, BSF was building libraries in Haiti when the well-known earthquake struck. At the time, local partners asked BSF to help them create information and cultural access points in refugee camps. This experience led to the development of the “Ideas Box," an innovative tool that provides vulnerable communities in disaster-prone areas with access to information, education, and cultural resources.

Last week, on the International Literacy Day, I talked to BSF’s Director of Communications and Advocacy, Katherine Trujillo, about the Ideas Box, as well as how their innovative ideas and actions have helped promote literacy and build resilience in disaster-hit communities.

Leaving no one behind – achieving disability-inclusive disaster risk management

Charlotte McClain-Nhlapo's picture
Southern, Thailand - January 9, 2017: a volunteer helps a man with a disability get through the flood in his wheelchair. Photo: issara anujun / Shutterstock.com
Natural hazard events can occur in any country, at any time.  At present, India, Bangladesh, and Nepal are dealing with the aftermath of some of the worst monsoon flooding in years, which has left more than 1,200 people dead and millions homeless.  At the same time, North America and the Caribbean region are responding to some of the strongest hurricanes on record.

At such times of peril, individual and community resilience is at a premium, and we cannot afford to miss opportunities to bolster that resilience wherever possible. This is especially true with respect to certain groups – such as persons with disabilities – who have historically been disproportionately affected by natural hazards.

While some strides have been made in addressing the needs of persons with different disabilities in response and recovery efforts, fewer efforts are aimed at incorporating lessons into long-term disaster and climate risk management at a systemic and/or policy level.  

More needs to be done to create disability inclusion for all – a topic that will be discussed during a Facebook Live chat on September 19 at 10 am ET: facebook.com/worldbank

Africa Hydromet Forum: Improving climate and weather forecasting to build disaster resilience

Ede Ijjasz-Vasquez's picture

Photo: JC McIlwaine / UN Photo

There is no doubt that extreme weather events are increasing in frequency and severity. In Africa alone, 90% of all disasters in recent decades have been driven by weather and climate. While we cannot stop them from striking, we can tell people about them, managing the risk that they present – by advancing our work in hydromet.

Hydromet is the union of hydrology and meteorology, combining water, weather, and climate studies as a formidable force in a government’s ability to accurately understand, forecast, and communicate storms and hazards. This means that something as simple as an accurate weather forecast, or the monitoring of river levels could make the difference between a farmer losing his/her entire crop or a fisherman knowing when best to head out to sea.  

Because of the lack of high-quality hydromet services, countries suffer GDP losses every year from flooding, cyclones, and other storms. Madagascar and Nigeria, for example, each lost more than 1 percent of GDP in a single year from storms.

However, instead of looking at potential future damages, we must look at how hydromet services can help cities and communities flourish with greater resilience today:

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. 


 

What do "Sustainable Cities" look like to you? Enter our global photo contest by October 6

Dini Djalal's picture
Also available in: Español | Français | العربية | 中文
Enter our global photo contest by October 6

Building healthy and well-functioning cities and communities that continue to thrive for generations is the goal of the Global Platform for Sustainable Cities (GPSC), a collaboration that unites cities across continents in their endeavors towards achieving sustainable, resilient development.
 
What would these cities and communities look like to you? The GPSC, its partner cities, and the Global Environment Facility (GEF) invite you to articulate sustainability through the medium of photography.


Whether it be elements of your city that represent sustainability, or a moment in time that captures the spirit of inclusive, resilient, and sustainable urban development, we invite you to share your vision with us, through your photographs.
 
The winners of the photo competition will each win exciting prizes: a $500 voucher for purchasing photography equipment, as well as a chance to be recognized at an award ceremony and have their photographs featured in the World Bank / GPSC’s online and print materials.
 
Here’s how the Sustainable Cities Photo Contest will work:

Flooded rivers: taking a bird’s eye view

Zuzana Stanton-Geddes's picture
When a river swells beyond its usual patterns, the impact on its surroundings can be devastating. In 2014, 51 people lost their lives and over 20% of Serbia’s population were affected by floods when eight rivers spilled over their banks. Photo credit: Dusan Milenkovic / Shutterstock.com
Floodplains are attractive areas for development, with over 2 billion people living within the world’s 10 largest river basins. Yet, they are also at particular risk from overflowing rivers. Globally, river floods affect more than 21 million people. By 2030, due to climate change, population growth, and rapid urbanization, this number could rise to 54 million.

Transforming Karachi, Pakistan into a livable and competitive megacity

Jon Kher Kaw's picture
It will take Karachi as much as $10 billion of capital investment over the next decade to close the infrastructure gaps in the city.
 
On the ground, it is not too difficult to see why this is so. More than 40% of residents rely on public transport, but with 45 residents competing for one bus seat, travel within the city is difficult. Water supply is highly irregular, and rationing is widespread. The availability of water ranges from four hours per day to two hours every other day. Many households rely on private vendors who sell water from tankers at high prices. The sewage network has not been well maintained since the 1960s, and all three existing treatment plants are dysfunctional. Industrial waste, which contains hazardous materials and heavy oils, is dumped directly into the sea untreated. Of the 12,000 tons of municipal solid waste generated each day, 60% never reaches a dumpsite; 80% of medical waste is not disposed of properly.
 
Garbage accumulated on a road median in Karachi. Photo: Annie Bidgood / World Bank

Weathering storms in Central America: The impact of hurricanes on poverty and the economy

Oscar A. Ishizawa's picture
Countries are facing increasingly frequent negative impacts from adverse natural events. Central America, a region prone and vulnerable to disasters, is a clear example. Just from 1992 to 2011, Central America was hit by nearly 70 hurricanes with an average of 8 events per year, hindering sustainable economic growth.

Between 2005 and 2014, due to natural disasters, the region had a nominal cumulative loss of around US$5.8 billion, and witnessed more than 3,410 deaths and hundreds of thousands of displaced people. More recently, in October 2011, Tropical Depression 12-E hit the coasts of El Salvador and Guatemala with damages amounting to nearly US$1 billion.

In two recent studies, we evaluated the causal impacts of hurricane windstorms on poverty and income as well as economic activity measured using night lights at the regional and country level. In both cases, we applied a fully probabilistic windstorm model developed in-house, and calibrated and adjusted it for Central America. The first study (on poverty) used yearly information at the household level (for income and poverty measures) as well as the national level (GDP per capita). Due to the limited comparable household data between the countries, we decided to follow up with the second study (on economic activity) using granular data at the highest spatial resolution available (i.e., 1 km2) to understand more deeply the (monthly) impact over time.

Our results are striking:

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