Move to strengthen govt's disaster risk financing capacity underway

The government in partnership with the World Bank (WB) has undertaken an initiative to strengthen its disaster risk-financing capacity, aiming to better prepare the country to cope with disaster-induced financial shocks.

Disaster risk financing involves strategic financial planning and instruments that are designed to cope with the economic impacts of natural hazards.

The fresh capacity-building programme aims to focus on introducing government officials and stakeholders to key disaster risk financing tools, financial instruments, and global best practices that support proactive, pre-disaster planning and risk mitigation, according to the insiders.

Currently, Bangladesh's disaster response is largely post-event, centered on emergency relief and rehabilitation efforts.

However, the country lacks necessary pre-disaster planning frameworks and financial preparedness, leaving it vulnerable to escalating climate-related risks, they said.

As one of the world's most climate-vulnerable countries, Bangladesh often experiences extreme weather events such as short winters, prolonged droughts, and severe floods.

Such climate hazards disrupt economic activities, particularly in the agriculture sector, and pose a major threat to food security and the poverty level.

The Financial Institutions Division (FID) under the Ministry of Finance and the Department of International Business at the University of Dhaka would jointly implement the capacity-building programme with financial and technical support from the WB.

"This is a new area for Bangladesh. We had never practiced this kind of financial preparedness before," said Professor Aditi Shams at the Department of International Business of Dhaka University.

She further said the first of the programme is to build capacity for the stakeholders."

Professor Shams said there are several financial instruments available globally to support the risk financing.

They include climate bonds, catastrophe insurance and parametric insurance products, Professor Shams added.

She said a pilot training programme would be held on the ensuing September 12-13 at the BARC Centre in Savar, targeting policymakers and key stakeholders across relevant sectors.

"In November, we planned to hold a mass training and national workshop involving all stakeholders, including public agencies, development partners, financial institutions, and civil society," she mentioned.

Professor Shams admitted that previous climate finance initiatives in Bangladesh hardly yielded the desired outcomes, largely due to the lack of technical and institutional and individual capacities. The new programme aims to address those gaps.

The FID, which initiated Bangladesh's first flood protection insurance scheme in four targeted flood-prone districts along the Jamuna River, will play a key role in the capacity building programme.

The FID scheme will initially be rolled out in Jamalpur, Sirajganj, Gaibandha and Kurigram areas, which are vulnerable to seasonal flooding.

More than 100,000 households, those who are often hit by recurring floods, are expected to come under this new insurance programme.

It marks a major milestone in integrating financial protection into the country's disaster risk management strategy.

jasimharoon@yahoo.com