The Overseas Countries and Territories (OCTs) of the Caribbean are among the most exposed and vulnerable islands to disaster risks and the impacts of climate change. Most of the OCTs are situated within the storm path frequented by hurricanes and tropical cyclones and are subject to hazards including rising sea levels, erosion, earthquakes, and volcanic activity. In addition, the coronavirus pandemic has forced OCTs to contend with a public health emergency at the same time as preparations were being made for the 2020 hurricane season. The economies of Caribbean OCTs are dependent on the tourism sector, which is always highly vulnerable to disaster-induced shocks and has been devastated by the pandemic’s economic fallout. The repercussions of disaster shocks fall preponderantly on the most economically vulnerable who depend on seasonal and tourism revenue. 

For this reason, the OCTs are working with the World Bank, through the Global Facility for Disaster Reduction and Recovery (GFDRR), to develop a strategic approach that enhances their financial resilience to disasters and minimizes economic disruption. The European Union (EU)-funded Technical Assistance (TA) Program for Disaster Risk Financing and Insurance (DRF TA) in Caribbean OCTs is working towards this objective by providing an extensive analysis of financial protection strategies and of current Disaster Risk Financing (DRF) instruments, while identifying recommendations and capacity-building strategies based on each country’s particular DRF needs. The DRF TA is a partnership between the EU, the World Bank Group, and GFDRR, and is part of the Resilience, Sustainable Energy, and Marine Biodiversity Program (RESEMBID) funded by the EU and implemented by Expertise France.

The DRF TA produced diagnostic reports on each country’s current DRF capacities. These included an overview of each OCT’s national public financial management context, it legislative and institutional frameworks, an evaluation of the domestic insurance market, and the post-disaster financial protection available to private sector and vulnerable communities.  In this first phase of the project, discussions took place with most Caribbean OCTs, using the diagnostics as a starting point, on the particular concerns of each government regarding financial protection.  Now in the second phase, the DRF TA will work to tailor recommendations and specific activities for participating OCTs based on these dialogues.

Through these country dialogues, the DRF TA is providing valuable information on financial planning for disasters as the severe economic impacts of the coronavirus pandemic are being felt. For example, conversations with Sint Maarten and Montserrat are helping to identify cost effective and accessible financing instruments and have provided insight as to how DRF principles can be integrated into the government’s financial management. This includes supporting better post-disaster loss data collection and management, leading to expedited and improved post-disaster budget execution and reporting. This not only increases the speed at which emergency priorities can be addressed, but improved reporting of itemized needs can also leverage their special political and economic relationship with European partners.

Recovery after disasters requires that difficult decisions be made in a very challenging and fast-moving environment, as decision-makers contend with limited resources, competing priorities, and pressure to act quickly. Simulating this post-disaster scenario (in this case, in the aftermath of a hurricane) to convey the key concepts of DRF to government officials is the goal of the “Hurricane Hurry” game, a simulation in the form of a role-playing game designed by the DRF TA WB team. The game garnered considerable enthusiasm and interest from the Caribbean Disaster Emergency Management Agency (CDEMA) and the University of the West Indies while it was played at the CDEMA’s 11th Caribbean Conference on Comprehensive Disaster Management. This event was attended by a delegation from the government of Sint Maarten, which wrote about how the “Hurricane Hurry” game helped inform them about the various scenarios confronting disaster managers and how to increase their adaptability. Due to the demand for country-specific training sessions, the World Bank is developing a method for virtual facilitation of this game.  

As the DRF TA is responsive to the individual challenges and needs for each OCT, it is also adapting to rapidly evolving situations arising from the coronavirus crisis. Workshops and discussions with OCT counterparts have transitioned to remote and virtual venues. Anguilla has requested assistance in assessing the standardization of its risk and hazard data to improve its response to the coronavirus and other disasters. Meanwhile, Aruba received support from the DRF TA in the form of a report that assessed the pandemic’s impact on food security and outlined recommendations to secure food resilience moving forward. This report was welcomed by the Minister of Finance, Economic Affairs and Culture of Aruba, Mrs. Xiomara Maduro, who stated “the report ‘Building Aruba’s food security during COVID-19 Pandemic and Beyond’ is comprehensive and timely, and Aruba aims to continue this successful collaboration to implement recommendations in the report.” Meanwhile, the government of Bonaire is working together with the DRF TA to undertake a socio-economic impact assessment of COVID-19, using the Post Disaster Needs Assessment (PDNA) Methodology, in order to better quantify and respond to COVID-19 impacts. These activities coincide with the launch of the RESEMBID Covid-19 Resilience Response Facility, funded by the EU to support OCTs’ response to the pandemic.

Despite the challenges imposed by the pandemic, the DRF TA represents a unique opportunity for Caribbean OCTs to develop new approaches to financial resilience against disasters. With a better understanding of the tools at their disposal, each country will have the institutional autonomy necessary to quickly provide an effective post-disaster response.