When a disaster happens, it does not affect everyone equally; generally, the population in vulnerable situations is the most affected. How to focus the use of resources to ensure a quick recovery?
We talked about this with Costa Rica's Minister of Finance, Nogui Acosta.
As countries and societies, it is up to us to protect the most vulnerable. In Costa Rica, what we have been working on is the possibility of identifying these populations. Obviously, the poorest, women, children or people with disabilities tend to be much more vulnerable. That is why it is so important to be able to identify them and have much more direct mechanisms to support them in these situations.
Costa Rica has been a pioneer in the financial management of these risks for vulnerable populations, with very advanced financial instruments, how has the country's experience been?
Yes, Costa Rica was the first country to develop a Cat DDO, which is like a credit card that, if used responsibly, can solve a problem. The World Bank gives us the possibility of having resources set aside when an emergency arises. Immediately the payment of these resources is triggered. It was very useful, $65 million that were used in times of emergency.
And the important thing is that once the emergency is declared, it detonates immediately and the resources reach the country.
Costa Rica in particular, but Central America in general, is a region that is very exposed to this type of risks: what are the main challenges so that these risks do not become a budgetary burden for the country?
Number one, to have infrastructure that is much more resilient to climate change.
Number two, incorporating climate change as one of the elements that can have an impact from a fiscal point of view. A drought reduces revenues, torrential rains also damage crops and then we are going to have an impact.
And the third one, which is perhaps the most important, is to create conditions for public finances to be resilient.
Could you explain how disaster risk management contributes to budgetary savings and efficiency?
Let's see, for Costa Rica, from 2019 to 2022, disaster situations have generated expenses of $4900 million, resources that had to be shifted from economic development objectives to reconstruction. And that has an impact from the point of view of the capacity of the economy to grow, to incorporate risk management within the budget of the republic. It is important.
Interviewer: Álvaro G. De Pablo
