Photo: GotCredit| Flickr Creative Commons
Whether an infrastructure project should be pursued through government funding, official development assistance (ODA), a Public-Private Partnership (PPP), or a hybrid, is a matter of finding the solution that best meets a government’s objective given a set of constraints and the risks presented by each option.
Photo: Ashim D'silva | Unsplash
From “Billions to Trillions”, to the Hamburg Principles and Ambitions, to Maximizing Finance for Development (MFD), Realizing that constrained public and multilateral development bank (MDB) funding cannot fully address the critical challenges that developing nations face, the World Bank Group is pursuing private sector solutions whenever they can help achieve development goals, in order to reserve scarce public finance for when it’s needed most. This is especially true in the delivery of infrastructure.
Is it possible for the same sentiment to be applied by government leaders – leaders who have the privilege and responsibility to preside over some of the world’s largest and most dynamic cities, especially those that share a common challenge in terms of seismic risk? Metro Manila, the megacity of the Philippines, the seat of government, and the engine of the national economy, has been destroyed numerous times over the last 500 hundred years by earthquakes, and currently sits upon a fault that is overdue to move. Istanbul, with world-class cultural heritage sites treasured by all, also sits near major fault lines expected to move any day. Tokyo and Wellington, the heart of government, culture, and history, also share exposed locations close to major fault lines.
In Wellington, decades of work – including the current Get Ready week! – have aimed to prepare the city for the next “big one”; but compared to the burgeoning megacities of Manila, Tokyo, or Istanbul, it is a small hill to conquer. How do you prepare these megacities with population of up to 15 million people? According to Sir Hillary, the answer is simple, you need to take the decision to accomplish something extraordinary.
In September 2017, the World Bank and the Global Facility for Disaster Reduction and Recovery (GFDRR) through the Japan-World Bank Program for Mainstreaming Disaster Risk Management in Developing Countries supported a knowledge exchange between Turkey and the Philippines focused on the challenge of building seismic resilience in megacities with high urbanization. For the World Bank, it was clear from the start that seismic risk is a priority on the Urban Resilience Agenda, when Johannes Zutt was able to explain to the visiting delegation the technical details of how base isolation is used to protect critical hospitals in Istanbul. The delegation saw impressive progress made by Turkey and Istanbul, from revised institutional frameworks, strengthened preparedness and response capabilities, and retrofitted schools and hospitals to adapted municipal e-services that ensure that the construction of resilient new buildings are approved fast and with the right safety checks. While massive seismic risk still exists within Istanbul, visible and concrete actions are also underway to improve the safety of its citizens.
“At 14:28:04 on May 12, 2008, an 8.0 earthquake struck suddenly, shaking the earth, with mountains and rivers shifted, devastated, and parted forever….” This was how China’s official report read, when describing the catastrophic consequences of the Sichuan earthquake, which left 5,335 students dead or missing.
Just two years ago, in Nepal, on April 25, 2015, due to a Mw 7.8 earthquake, 6,700 school buildings collapsed or were affected beyond repair. Fortunately, it occurred on Saturday—a holiday in Nepal—otherwise the human toll could have been as high as that of the Sichuan disaster, or even worse. Similarly, in other parts of the world—Pakistan, Bangladesh, Philippines, Haiti, Ecuador, and most recently Mexico—schools suffered from the impact of natural hazards.
Why have schools collapsed?
Peace – something that many of us take for granted in our own lives – is elusive for millions of people around the world, including in southern Philippines. Long-standing conflict between the government and rebel groups, and a complicated patchwork of clan and family conflicts, has led to decades of economic stagnation and poverty in one of the Philippines’ most beautiful and productive regions – Mindanao. A peace process is hopefully nearing its conclusion and is expected to bring autonomy and with it, greater opportunities for peace and development to the people of the Bangsamoro.
The Philippines is a middle-income country – with GDP at $2,953 per capita and a robust economy, with almost 96% enrollment rate in basic education, and improving health indicators such as child mortality; overall the country is doing well. But these numbers mask sharp regional contrasts: in the Autonomous Region in Muslim Mindanao (ARMM) the GDP per capita is only $576 – equivalent to countries like Rwanda and Afghanistan – the poverty rate is 53.7%, and more than 50% of its employed population are in agriculture with 80% of them working as subsistence farmers, living precariously from crop to crop. One crop failure can mean ruin for a family.
: refugees, rapid and unsustainable urbanization and climate change, failure to meet basic infrastructure needs, youth unemployment and disengagement, and stubbornly poor health and education outcomes, to name a few. Set against a backdrop of political and public pressure to do more with less – and see results faster than ever – even the most optimistic among us are likely to view the glass half empty.
In The Godfather II, Vito Corleone chooses his younger son, Michael, instead of his older son, Fredo, as his successor. This decision is based on Michael's intelligence and ability. Fredo, who is considered weak, is dismissed to do more menial tasks for the family. This has huge implications for Michael, Fredo, and the Corleone saga.
CC (The Godfather) Image courtesy of Insomnia Cured Here on Flickr
What makes parents decide to "invest" in one child over another? In economics, a key idea is that parents either reinforce or compensate for children’s endowments, such as health or intelligence. They reinforce by investing more in the human capital of their better-endowed children. Or they compensate by investing more in their worse-endowed children to reduce inequality among siblings. The core notion is : either parents are striving for equity (the compensating strategy) or efficiency (the reinforcing strategy of Vito Corleone).
Help needs to come immediately to save lives; recovery and reconstruction have to start swiftly to lessen the impact.
However, while money is critical to this response, it’s not just about funding. Indeed, funds need to match the event scale, target the right areas and sectors, and smoothly flow to communities in need. But in order for that to happen, sound public policy on risk and frameworks have to be in place.
To address both urgent financial needs while pursing strategic disaster risk management policy goals, countries have been using the World Bank’s development policy loan with a catastrophe deferred drawdown option or, more widely known as the Cat DDO.