Context:
Under India’s Presidency, the G20 has established a new working group on disaster risk reduction, Positioning itself to prioritize disaster risk financing and achieve the targets set by the Sendai framework for 2030.
This is crucial due to the increasing frequency of natural and human-made catastrophes globally, which have negative effects on poverty,
development, and social cohesion.
Why the need felt for such a group?
Recent years have seen an increase in both natural and human-made catastrophes across the globe.
The 2021-22 Human Development Report shows that disasters do not merely exacerbate poverty and thwart development, but also generate social polarisation across nations and communities.
Need to develop Strategies:
The lack of competent financial risk management and insurance has provided a fertile breeding ground for these risks to proliferate and intensify, wreaking havoc on various aspects of society and the economy.
Annual disaster losses account for a significant share of GDP in many low-income economies. To manage these risks, financial strategies must be developed.
A crucial role:
The G20: The G20 has a crucial role to play in supporting countries to strengthen their financial risk management capabilities.
States: Every state needs to enhance their capacity to understand risks and integrate them into government planning and budget processes.
The insurance industry: They need better regulation, legislation, and supervision.
Sovereign risk to the capital markets, and the financing for response, recovery, and reconstruction needs to be improved by shifting from ex-post to ex-ante mechanisms.
The urgency of Disaster Resilience:
The IPCC’s Sixth Assessment Report highlights the vulnerability of many people to climate change.
The Sendai Framework for Disaster Risk Reduction calls for substantial reductions in disaster risk and losses.
Awareness of climate change’s impact necessitates prioritizing disaster resilience. Bridging the gap between high-level objectives and practical investments is challenging.
The G20 DRRWG can play a vital role in directing capital flow towards investments that enhance societies and economies’ disaster resilience.
Conclusion:
India’s Presidency in G20 provides an opportunity to guide disaster management initiatives by prioritizing disaster risk financing.
The G20 DRRWG, through its comprehensive approach and focus on financial management strategies, can help bridge the gap between objectives and practical investments, ultimately promoting disaster resilience worldwide.
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