Financial Solutions for Disaster Risks in Danang City
22/11/2016 16:28:35

On November 16, 2016, a delegation of World Bank (WB) led by Mr. Alwaleed Alatabani, the Financial Sector’s Chief Specialist at the WB in Viet Nam worked with departments and agencies in the city on the issue of "Financial Solutions for Disaster Risks in Danang". From Da Nang city, Mr. Le Ba Dung, Vice Director of Department of Finance, Mr. Hoang Thanh Hoa, Vice Director of Department of Agriculture and Rural Development and Mr. Dinh Quang Cuong, Director of Danang Climate Change Coordination as well as representatives from relevant departments and agencies attended the meeting.

   

Mr. Le Ba Dung – Deputy Director of Department of Finance is delivering the opening speech.

 

At the conference, the WB delegation shared a number of researches and reviews on the extent of financial losses that Danang city incurred due to natural disasters. Accordingly, the average annual direct losses that the city must bear is 913 billion USD, including losses caused by storm accounting for 60%, and flooding accounting for 40%. The city’s southern and central residential areas are the hardest hits. In particular, in the years of losses at high extremes, the city suffered losses that could exceed 10 trillion USD.

 

A WB expert is giving his presentation at the meeting.

 

About international experience, the WB experts shared that Colombia implemented best international practices of insuring investment project worth 38 billion for the next generation of PPP projects for road infrastructure (franchise). Also, this country used standard terms of conditions according to the best practices on the international insurance market to buy disaster insurance for office buildings.

 

At the conference, the parties also discussed the possibility of enhancing the city’s financial resistance, that is: (1) Building solutions of financial protection within the framework of the city's resistance strategies to help Danang building better planning to mobilize capital for quick and effective response to and recovery from natural disasters’ consequences; (2) Performing detailed reviews of financial instruments for current disaster risks to identify and quantify the post-disaster budget deficit (the needs of capital) according to the various disaster scenarios, and building the policy approach to reducing capital deficit as well as improving post-disaster budget execution procedures; (3) Learning about the insurance program for different property types.

 

At the end of the conference, the parties agreed that among financial solutions in order to mitigate the natural disasters’ impact, insurance is the most effective risk transfer tool reducing the burden on the city's budget. However, the creation and development of insurance products for separate disasters in present conditions need to have a specific plan and roadmap. In the coming time period, Danang Climate Change Coordination Office, Department of Finance and WB will continue to research and work on this issue.


Quang Thanh

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Da Nang Climate Change Coordination Office (CCCO)

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