The G20’s approval of a new working group on disaster risk reduction under India’s presidency provides a chance to prioritise disaster risk finance and meet the Sendai framework’s 2030 targets. The increasing prevalence of natural and man-made disasters around the world has highlighted the importance of professional financial risk management and insurance.
The Importance of Disaster Risk Financing
- Worldwide, natural and man-made disasters have increased in recent years. Natural disasters not only worsen poverty and impede development, but they also create societal polarisation.
- Risks have proliferated due to a lack of adequate financial risk management and insurance, wreaking havoc on society and the economy. Disaster losses have a huge impact on low-income economies each year.
The G20’s Role in Strengthening Financial Risk Management
- Improving Risk Awareness and Integration: The G20 can help countries better comprehend disaster risks and incorporate them into government planning and budgeting processes. This involves encouraging the creation and spread of risk assessment tools, processes, and best practises.
- Strengthening Insurance Regulation and Supervision: Effective regulation, legislation, and supervision are required for the insurance business to play a proactive role in catastrophe risk management. The G20 can foster communication and collaboration among regulators and policymakers in order to develop strong frameworks that promote fair and transparent insurance practises.
- Public-Private Partnership Facilitation: Public-private collaborations are critical for efficiently controlling and funding disaster risks. The G20 can provide an enabling atmosphere for collaboration among governments, businesses, and financial institutions.
- Ex-post to Ex-ante Financing Mechanisms: Historically, financial resources for disaster response, recovery, and reconstruction were mobilised after an event occurred (ex-post financing). The G20 can advocate for a change away from ex-post finance methods, in which financial resources are pre-arranged and ready to respond to crises.
- Encouragement of Disaster Risk Reduction Investment: There is a lack of investment in a development-oriented approach that focuses on disaster risk reduction. The G20 can encourage catastrophe risk reduction investment by raising knowledge about the benefits of resilience-building measures and establishing incentives for both the public and private sectors to contribute resources to risk reduction programmes.
What is the Disaster Risk Reduction Working Group?
- The Disaster Risk Reduction Working Group is a recently endorsed G20 working group focusing on disaster risk reduction.
- It provides a forum for member countries to interact and share expertise on successful disaster risk management and reduction techniques.
- It strives to address essential components of complete financial risk management methods, such as risk assessment, insurance coverage, financial support, and risk transfer mechanisms.
The Disaster Risk Reduction Working Group’s (DRRWG) Importance
- Knowledge Sharing and Collaboration: The DRRWG provides a venue for member nations to share disaster risk reduction knowledge, experiences, and best practises. It promotes collaboration and learning from various techniques and methodology used by other countries.
- Harmonisation and Standardisation: The DRRWG promotes the harmonisation and standardisation of disaster risk assessment and financing definitions, techniques, and data collection practises. This enhances comparability and allows for more accurate analysis and comparing of disaster risks across regions.
- Access to International Markets: The DRRWG assists countries in improving access to international (re)insurance markets by harmonising definitions and processes. Standardised techniques and improved data quality boost insurers’ and reinsurers’ trust, facilitating the availability of insurance coverage and risk transfer mechanisms.
- Comprehensive Financial Management techniques: The DRRWG intends to address all essential components of disaster risk financial management techniques. Comprehensive policies improve governments’ ability to successfully manage and reduce disaster risks.
- Investment in Disaster Risk Reduction efforts: The DRRWG stresses the need of investing in disaster risk reduction efforts. The DRRWG assists in guiding investment decisions towards risk reduction and resilience by establishing screening criteria for disaster-resilient assets and entities.
- Global Resilience Building: The DRRWG’s initiatives help to build global resilience to disasters. The DRRWG promotes member nations’ collective capacity to reduce, manage, and recover from catastrophes by encouraging cooperation, exchanging expertise, and promoting best practises.
How might India influence G20 disaster management initiatives?
- Setting the Agenda: As the G20 president, India has the authority to prioritise disaster management on the agenda of G20 meetings and debates. India can guarantee that member countries address catastrophe resilience and risk reduction at the highest level of international cooperation by emphasising the importance of these concerns.
- Knowledge Sharing and Capacity Building: India can lead efforts to assist G20 member countries’ disaster management knowledge sharing and capacity building. Organising workshops, training programmes, and conferences to foster the exchange of best practises, lessons learnt, and creative ideas can be part of this.
- Policy Advocacy: India can lobby for policy changes that improve disaster response capacity. This includes promoting risk-based approaches and integrating catastrophe risk reduction into national development plans and strategies.
- Financial Commitments: As G20 president, India can push member countries to invest in catastrophe risk reduction and resilience-building activities. By emphasising the economic and social benefits of such investments, India can gain support for expanded funding and disaster management financing systems.
- Public-business Partnerships: India can encourage governments and the business sector to work together to improve disaster management efforts. India can enable the creation of creative solutions and enhance resilience across sectors by encouraging collaboration and sharing expertise, technologies, and resources.
- International collaboration: India might use its position as G20 presidency to strengthen international disaster management collaboration. Collaborating with other international organisations, regional agencies, and stakeholders to coordinate activities, share data and information, and promote a collective response to global disaster threats is part of this.
@the end
Prioritising disaster risk financing within the G20 during India’s presidency offers an opportunity to turn aspirations into investment opportunities. India’s experience coping with natural disasters places it at the forefront of disaster risk management.
Source: https://indianexpress.com/article/opinion/columns/for-safetys-sake-8611073/