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Strategies for development assistance agencies10/

1. Technical cooperation agencies
2. Convincing financing agencies

10/ This section is largely extracted from a previous OAS document, "Incorporating Natural Hazard Assessment and Mitigation into Project Preparation," published by the Committee of International Development Institutions on the Environment (CIDIE) in 1989.

The different categories of development assistance agencies (technical cooperation agencies, bilateral and multilateral lending and donor agencies) each have a potential role in supporting the assessment and mitigation of natural hazards. Technical cooperation agencies such as the OAS support institution-building, research, planning, and project formulation as requested. Their financial impact and their political or technical leverage are limited. But their contribution to natural hazard assessment and mitigation in regional and sectoral planning, project identification, and prefeasibility studies is important.

Bilateral agencies such as AID, CIDA, and the members of the OECD Development Assistance Committee provide funds for projects as well as for technical cooperation. Most bilateral funds are concessional, and financial returns are less important to these agencies than to the development banks. They can exert considerable leverage over projects they fund.

The multilateral development banks, mainly the World Bank and the regional development banks, fund development projects but are also increasingly involved in sector policies, institutional strengthening, program lending, and structural adjustment. The dominant factors that shape their lending programs are the financial and economic soundness of an investment and the creditworthiness of the borrowing institutions. Within these parameters they can significantly influence hazard mitigation issues.

The conditions for increasing national and international attention to disaster mitigation issues may be stated as follows:

- The more developed a country's planning institutions and processes, the more easily natural hazards assessment and mitigation issues can be adopted.

- The more experience a country has gained in assessing specific hazards, often following a major disaster, the more likely it will be to request assistance for continuing such assessments.

- The more scientific, engineering, and prevention-related information available to countries and to donors, the easier it will be to apply natural hazards assessment and mitigation to individual programs and projects.

- The more experience governments and donors have concerning the kinds of mitigation measures that are most cost-effective and implementable, the less reluctant they are to include such measures in projects.

- The more experience and confidence there is in evaluating mitigation measures at various decision points in the project cycle, the more likely it is that the staffs of both the national and the assistance agencies will be prepared to undertake the analysis.

1. Technical cooperation agencies

For technical cooperation agencies such as the OAS, the activities that should be included in a strategy for promoting natural hazards assessment and mitigation are:

- Support for national planning institutions. Unless they have the institutional capacity to incorporate natural hazards information into the planning process on an inter-sectoral basis, governments are not likely to show any enthusiasm about looking at individual investment projects from this perspective.

- Support for pilot projects. By initiating natural hazards assessments on a pilot basis, it is possible to demonstrate how to do them and what mitigation measures can be proposed, and thereby generate further demand when governments request project funding from donors.

- Support for establishing an information base. Once the information necessary for natural hazard assessments is available, its implications for individual investment projects become difficult to ignore.

- Linkage with relief and reconstruction efforts. In the aftermath of disasters it is easier than it would otherwise be to interest governments and development assistance agencies in natural hazards assessment and mitigation.

- Hazards assessment in sector planning. By building natural hazards assessment into the planning of the agriculture, energy, housing, tourism, transportation, and other sectors, it should be possible to focus attention on hazards in relation to various types of projects before specific investments are identified.

- Inclusion of financial and economic aspects of hazards in project preparation methods. Estimating the benefits of avoiding direct losses from natural hazards and the costs of appropriate non-structural mitigation measures will make it easier to examine their true importance in individual investment projects. An awareness of the investment losses and repair costs to governments and the private sector, and the distribution of these costs and damages, is likely to increase sensitivity to the issue among all concerned.

- Case studies of project design principles or components aimed at natural hazard mitigation. Examples of relevant experiences-liability and insurance schemes for investments, property rights designed to create incentives for hazard mitigation, subsidies for mitigation measures, institutional responsibility for coordinating disaster relief with hazard assessment and mitigation, etc.-will show how funding activities can be made more responsive to natural hazards.

The OAS has initiated programs in all these activity areas though direct technical cooperation, training, applied research, and participation in inter-national conferences and workshops. But the need for such activities is much greater than present resources allow. Financing agencies must also become more involved.

2. Convincing financing agencies

A strategy to promote natural hazards assessment and mitigation must also find means of inducing the cooperation of the agencies that actually fund the investment projects. There are three elements that may offer this inducement: (1) a change in the context in which the donors perceive the governments and collaborating technical cooperation agencies to be addressing natural hazard assessment and mitigation issues; (2) incentives for analysis; and (3) the assignment of accountability for losses.

A Change in Context

Changing the context in which lending and donor agencies perceive natural hazard assessment and mitigation to be taking place includes most of the activities that the OAS is already promoting: assisting governments in regional planning, pilot natural hazards assessments, assistance for information systems, increasing the quality of project identification, and building the appropriate mitigation measures into pre-investment activities. Further development of these activities raises three strategic questions: What can be done that is most cost-effective in terms of improving both the commitment and the technical and institutional capacity for hazard assessment in a country? What outputs can be generated that are most likely to appeal to lenders and therefore bridge the gap between hazard assessment and project preparation? What cooperative mechanisms can be developed between the technical assistance and donor agencies that will help reach the first two goals?

In response to the first question, implementation of the following ideas seems necessary:

- Focus on priority hazards. Efforts should be concentrated on assessing hazards that are sufficiently urgent to generate the necessary cooperation. Trade-offs must be made between the need for specific information and broad research interests.

- Focus on priority sectors. Losses in some sectors are likely to have greater immediate significance to governments and economic interests than in others, and it seems prudent to try to generate institutional support for attention to these.

- Choose simple and practical information collection and analysis systems. The burden of data collection and management often consumes all available technical and institutional capacity and resources, leaving none for decision-making and implementation. Information systems should reflect realistic priorities for hazards and the development activities that are affected.

As to the second question, the following guides should be used:

- Early identification and integration of mitigation issues. Mitigation measures built into projects from the earliest preparation stages are more likely to receive adequate review.

- Practical and cost-effective solutions to recurrent problems. For certain types of projects such solutions are less likely to be rejected if it can be shown that situations to which they are applicable are common.

- Commitment to implementation. Confidence in hazard mitigation is higher if governments appear committed to carrying it out.

As to the third question, the following ideas are suggested:

- Pooling of resources. Donor and technical assistance agencies should make their professional staff available for joint missions at varying stages of the project cycle.

- Exchange of experiences. Technical assistance agency representatives should periodically present case-study and other training material on the design and implementation of natural hazard assessment and mitigation techniques in project formulation taken from real field experiences. In turn, as their capability in this area improves, the donor agency staffs should present their policies, programs, and project evaluation criteria.

- Government institutional support. Natural hazard assessment and mitigation should be routinely included in staff development and training programs in conjunction with project formulation activities.

Incentives for Analysis

The project staff of a development financing agency will resist any requirement to incorporate natural hazards into project preparation and analysis unless it fits into the existing review mechanisms and appraisal methods. Various ways to promote this consistency exist:

- Provide reusable information. Agencies should set guidelines to alert their staffs to specific hazards, and give them examples of appropriate mitigation measures and implementation requirements. This approach depends on the institution of mechanisms to ensure that the guidelines are followed routinely.

- Integrate hazard concerns into existing review mechanisms such as programming missions, project identification reports, reconnaissance surveys, and project appraisal. Hazards will inevitably be one of many factors to be taken into account, and there is a danger that they will be overlooked if they are not made part of the standard format.

- Promote proven mitigation measures in relation to specific types of projects. Design standards, insurance schemes, diversification of crops, feasibility of hazard-resistant crops or designs are examples. Project staffs are more likely to become enthusiastic about positive project opportunities than review mechanisms.

- Incorporate the costs and benefits of hazards mitigation into economic appraisal. This makes sense to the extent that decisions are made on the basis of economic returns, that the information on which to base the economic calculations is available, and that the analysis is geared towards improving project design. It is hard to generate support for a new activity unless it can be justified on the basis of financial and economic returns. From this point of view, it is an advantage to be able to show that hazard mitigation can save financial and economic costs in the conventional cost-benefit framework.

- Sensitize project staff members. This is especially important for project staff responsible for hazard-prone regions and sectoral advisers responsible for hazard-sensitive sectors. Training, cooperation, and publicity can contribute to making project staff more aware of the issue. This, probably more than any other factor, can offset the institutional and financial resistance to hazard assessment and mitigation on the part of governments and the development financing agencies alike.

Assignment of Accountability for Losses

The concern of development financing agencies for natural hazard assessment and mitigation depends on the degree to which projects they help plan or fund suffer losses from natural disasters. There are number of ways to assign accountability:

- Evaluate losses from natural hazards not only in the context of the creditworthiness of the government or a particular sector, but also of the donor's program area and its project design and loan repayment performance.

- Study, discuss, and publish evaluations in instances where losses have been incurred for projects that failed to consider or evaluate hazard mitigation measures.

- Promote professional standards on the part of the engineers, agronomists, or others responsible for planning and executing development projects that include natural hazards assessment and mitigation.


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