BACOLOD CITY, Philippines—Top finance officials of the 21 countries belonging to the Asia-Pacific Economic Cooperation (Apec) have proposed to establish a risk pooling mechanism to shield economies as well as the poor from the effects of natural disasters to livelihood.
The proposed regional mechanism would transfer and pool risks to reduce the impact on individual countries, Finance Undersecretary Gil S. Beltran told a press conference at the end of the two-day Disaster Risk Finance-Apec Roadmap for Resilient Economies meeting.
World Bank disaster risk financing specialist Richard Poulter noted that risk pooling across member-economies by tapping the international reinsurance market, which has a lower premium than local markets, would generate savings that could be spent on other sectors such as health and education.
Poulter said the World Bank had proposed the conduct of a feasibility study to determine if the risk pooling mechanism would be appropriate for Apec countries. “Risk pooling needs to be taken in stages,” he said.
Beltran said disaster risk reduction was important not only to the Philippines but also across the region. “Disasters cost 1.1 percent of the country’s annual GDP [gross domestic product]; for other countries, 0.6-0.7 percent of their economies are lost to disasters.”
If disaster risks would not be mitigated, the poor would be pushed “deeper into poverty,” Beltran pointed out.
During the meeting, Apec member-economies also proposed to create a platform showing data on insurance coverage of public assets, establish a catalogue that shows risk exposures of each member, and also engage the private sector more into disaster risk financing.
“The Apec region serves as a growth driver for the world economy. Given that the region is prone to natural disasters, collective efforts to boost disaster resiliency are vital in ensuring that our region continues to have significant contributions to global growth,” Beltran said.–Ben O. de Vera