JAMAICA has been working on establishing a policy framework for disaster risk financing, Minister without Portfolio in the Ministry of Finance and the Public Service Fayval Williams said on Tuesday.

Williams, who was making her first contribution to the sectoral debate in the House of Representatives since being promoted to minister in a Cabinet shuffle by Prime Minister Andrew Holness on March 26, said she is pleased that the Government has put in motion, and are far along with the analytic work that will guide the eventual establishment of a Policy Framework for Disaster Risk Financing ahead of a disaster.

“It will be amply consulted with local and international stakeholders. It will be based on the most recent, specialised technical analysis available. In the end, we will have a portfolio, a suite of products for different levels of disaster, and a transparent investment plan to mitigate harm to people and damage to infrastructure,” she said.

Williams said that the Government would continue to maintain a contingency in the budget to deal with high frequency events, but relatively low levels of damage.

“Rather than the one product that we have now, that only kicks in if there is a catastrophe, we envision different market-based products with quick disbursement features. We will utilise the market for contingent lines of credit and catastrophic bonds, all within our envelope of affordability,” she said.

She added that an analysis of the Caribbean Catastrophic Risk Insurance Fund would also guide Jamaica’s continued participation in the product.

“The result of all this will be deliberate actions, based on analysis. While we are well aware that Jamaica cannot escape the risk of natural disasters, we know that we can take action to significantly and efficiently reduce our vulnerability and our exposure to risks, within the affordability bounds,” she noted.

Williams added that she was pleased to note, as well, that international aid and development funding agencies have the strong view that hazard and vulnerability reduction efforts, as well as financial planning, before a catastrophe pay excellent dividends in reducing economic impacts.

She noted that the International Monetary Fund (IMF), in its recently published book, Unleashing Growth and Strengthening Resilience in the Caribbean, dedicated several pages to talking about “Fiscal Challenges in the Caribbean: Coping with Natural Disasters”.

The IMF’s research showed that, since 1950, more than 12,000 natural disasters have been registered globally, and during that same period, the Caribbean has been hit by 324 natural disasters, she pointed out.

“This 324 figure looks like a small number when compared with 12,000, but the research shows that the economic impact of these 324 natural disasters in the Caribbean have been substantial, exceeding US$22 billion, in constant 2009 dollars, over the period 1950-2016,” she noted.

She said that this should contrast with the cost of $58 billion globally (including the Caribbean) to get a sense of the magnitude of vulnerability of the tourism-dependent economies.

“We, in the Caribbean, have suffered about 38 per cent of the global damage from natural disasters in our little islands, with about 42.5 million people, collectively, compared with approximately 7.5 billion people in the rest of the world,” she added.