This report analyses financing for Disaster Risk Reduction over the past 20 years. It finds that overall volumes spent on disasters are a fraction of development aid, and within that the amount committed to reduce the risk of disasters is an even smaller proportion. Financing is heavily concentrated in a relatively small number of projects and in relatively few countries, with most recipients being middle-income countries. The overall volumes mask the very low amounts for the reduction of disaster risk in many vulnerable countries, especially those affected by drought, many of which are in sub-Saharan Africa. Many of these countries receive massive amounts for emergency response and reconstruction, but negligible amounts for DRR. The report recommends that DRR financing should be more integrated and coordinated, and better targeted.
The evidence of the 20-year trends in international DRR financing is worrying:
- Financing has been highly volatile; only in the past few years has there been relative stability.
- Although $13.5 billion of financing has been made available, it is a fraction of overall aid, less than 40 cents in every $100.
- Disaster losses in developing nations amount to $862 billion (a considerable under-estimate) – equivalent in value to one-third of all international development aid.
- There is a high concentration of funding in a relatively small number of middle-income countries. The top ten recipients received nearly $8 billion, the remaining 144 just $5.6 billion combined.
- Financing is considerably fragmented. The 3,188 projects that cost less than $1.5 million represent 86.5% of the total number but only 5.5% of the volume of financing. The administrative costs of this have not been calculated.
- Many high-risk countries have received negligible levels of financing for DRR compared with emergency response; 17 of the top 20 recipients of response funding received less than 4% of their disaster-related aid as DRR.
In addition, the priorities of international financing are, on the whole, not matched to either the needs or capacity of recipient countries:
- There is some correlation between mortality risk levels and volumes of financing, but only at the high-risk level.
- Per capita financing reveals significant inequity. Ecuador, the second highest recipient per capita, received 19 times more than Afghanistan, 100 times more than Costa Rica and 600 times more than the Democratic Republic of Congo (DRC).
- Where the economy is at risk, volumes of financing tend to be high; where predominantly populations are at risk, volumes are often low.
- Financing in drought-affected countries is very weak. Niger, Eritrea, Zimbabwe, Kenya and Malawi have seen 105 million people affected by drought, but their combined DRR financing has been $116.5 million, the same as Honduras alone.
- Financing does not take into account national capacity and finances. Twelve of a group of 23 low-income countries each received less than $10 million for DRR over 20 years. These same countries received $5.6 billion in disaster response, equivalent to $160,000 for every $1 of DRR.
There are positive areas to build upon, including relatively stable financing in the past few years; less financing of heavy infrastructure; a move away from richer middle-income countries; and increasing DRR financing from climate adaptation. There should, however, be considerable caution given the pressures on traditional funding sources, and sustained concern for the high numbers of low-income, sub-Saharan African countries, often severely affected by drought, that have seen minimal international DRR financing.
The data available for tracking the financing of DRR is not as good as it should be. Both broad pictures and individual country detail are needed, and to obtain this data improvements are urgently required. We also need to better understand national financing for DRR, and the interplay between national and international sources.
Despite issues with data, the evidence drawn together in this report strongly suggests that the international community must take stock of the way it provides support to national governments. Questions need to be asked about the role of international financing, the funding architecture and how funds from other sources can be brought to bear. Above all else, there is a need to move towards gauging the effectiveness of what has been spent.