‘Don’t rely on foreign aid to bounce back from disasters’

Barbados and other countries in the region were today cautioned by a development banker not to depend on foreign aid to help them get back on their feet from a natural disaster.

Eduardo Cavallo, Principal Economist in the Research Department of the Inter-American Development Bank (IDB), urged authorities to pay more attention to preparation.

“The evidence suggests that foreign aid is not large enough to help countries cover a significant portion of the damages caused by disaster,” Cavallo told officials attending an IDB hosted panel discussion at the Courtyard by Marriott on Monday.

“An implication I take out of that is that countries would then be well served through alternative financing, ex-ante (forecast-based) financing tools, things such as reserve funds, contingency credit lines, regional risks pool or insurance or reinsurance contract,” he said.

Cavallo was presenting portions of ongoing research while speaking on the topic The Economic Impacts of Natural Disasters.

He said that too often resilience building slowed down when Governments change because of a different policy direction.

But he called on authorities to do all they could to make their countries less vulnerable.

“You can’t avoid a storm or earthquake but you can have more resilient interests.

“You can have homes that place people further away from more dangerous areas, you can have construction standards that are stronger, you can have insurance, for example, or you can promote some insurance where that is available,” Cavallo said.   

But stating that the size of the country, geographic location and gross domestic product also played a factor in how badly a country would be affected, Cavallo argued that the poor stood to suffer most from natural disasters.

The IDB economist said the time had come for the region to improve its zoning and invest in the improvement of their sewerage and drainage systems.

He also insisted that there was a need for a catastrophic insurance market to be developed in Barbados and the rest of the Caribbean.

Cavallo said: “This is an area where we really need to work on. The second thing countries can do to be better prepared is working on adaptation.

“The role of infrastructure is very critical. We have very poor quality infrastructure in our region.

“We are among the worst in the world in terms of the quality of our infrastructure.

“We are comparable to sub-Saharan Africa than to any of the emerging or developing regions of the world.

“There is one issue that I think is a big opportunity for Barbados and that is building up ex-ante financial mechanisms to strengthen the fiscal position.”

Cavallo warned that Barbados was not exempt from the increasing trend in hurricanes in the Caribbean basin, pointing out that “the Caribbean region is expected to experience something between 0.2 and 0.6 degrees Celsius increase in temperatures per decade if the issue of climate change is not addressed”. marlonmadden@barbadostoday.bb