A high degree of variability is found in the financing models for DRR used in the case study countries. What drives the differences is difficult to ascertain directly from the literature. What we do know is that all five financing structures have in some way evolved from earlier, simpler financing structures, often built upon pre-existing disaster management priorities and institutions that then grew into broader DRM. However, in the cases of Indonesia, the Philippines, Costa Rica and to an extent Mexico, DRR has ‘outgrown’ its parent DRM structures, evolving to encompass its own legislation, framework and funding streams.
The following is an overview of the various models found in the case studies, with a simplified overall suggestion of how ‘successful’ each
approach has been.
● Mexico: Disaster management agency is financed directly through parent Ministry of Interior; risk reduction activities financed largely through a DRM-focused structure (FONDEN); evidence of sector/development DRR financing minimal.
Overall: Too focused on risk transfer and retention and not sufficiently on DRR.
● South Africa: Largely subsumed within broader DRM concerns, the DRR financing structure is complex and rather convoluted, with central government financing also vaguely ‘optional’.
Sectoral financing is obligatory using existing budgets, but additional funds can be sought for national priorities. Overall: not a model as such, but a complicated and vague structure with unclear financial responsibilities.
FIGURE 15: ANALYSIS OF NATIONAL FINANCING COHERENCE OF DRR ACROSS THE FIVE CASE STUDY COUNTRIES
Mexico South Africa Costa Rica Indonesia Philippines
Models funding, but less integrated with funding for the country’s key risk agency is supplemented and financing are also part of these ministries’ own work, linked to the country’s general funding for DRR exists, but its scale and scope are unclear. only as a political rather than as a specific financial commitment.
Poor risk analysis in investment planning.
Recognised but not prioritised in the National Development need to integrate risk reduction for natural hazards into public investment decisions.
DRR is considered a national priority within the Mid-Term National Development Plan 2010-2014, but is not appropriately programmed or financed in the plan. into the National Development
emphasised in the National Disaster to manage local risks.
Lack of capacity at the local country is also one of the most disaster-prone in the world.
Transparency no tracking code exists.
Almost nothing is said about the volumes of money spent
Lack of recent data on volumes of funding for DRR and currently there is no system in place to track DRR investment.
Stand-alone projects have budget classifications but it is difficult to track embedded projects.
There is no system to track DRR spending at national level and information general is quite high. the private sector for risk transfer.
These are broader DRM mechanisms and have little connection to risk reduction; indeed private companies do not pay for incremental measures of DRR in the event of reconstruction after disaster.
There is little evidence of integration of non-governmentt financing, partly because there is little evidence of consistent of the various sources of because of the high volumes of finance flowing. research to date has not sketched out the potential scale and scope of civil society’s financial society are well integrated into are not always clear, a degree of financial not answered in the HFA Monitor, so difficult to answer questions about accuracy of reporting.
All positive answers to the HFA Monitor, largely borne out by research.
All positive answers to the HFA Monitor,
NOTE: THE COLOUR CODING USED IN THIS FIGURE IS RELATIVE ACROSS THE CASE STUDIES AND IS INTENDED AS A QUICK VISUAL CUE TO THE LIKELY SUCCESS OF EACH CRITERION OF COHERENCE. GREEN EQUALS GOOD, YELLOW AVERAGE AND RED POOR.
FIGURE 15: ANALYSIS OF NATIONAL FINANCING COHERENCE OF DRR ACROSS THE
FIVE CASE STUDY COUNTRIES
(continued)● Costa Rica: Mixed model. Stand-alone funding for key risk agency is supplemented significantly by funding from sectoral
ministries (3% of budgets). DRR responsibility and financing are also part of these ministries’
own work, linked to the country’s general development goals. Overall: largely successful.
● Indonesia: Substantial financing for central bodies responsible for disaster risk, as well as large-scale stand-alone DRR financing, often for infrastructure projects. Ministerial funding for DRR exists, but the scale and scope of this are unclear. Overall: Largely coherent financing model.
● The Philippines: Stand-alone funding exists for key risk agencies. DRR allocations can be found throughout sectors and activities, with increasing integration between disaster risk and climate adaptation financing. Two separate stand-by funds exist for mixed DRM/
DRR-specific activities. Overall: Multiple approaches, but held together well by strong legislation and framework.
All of the countries, except Mexico,45 make the integration of risk (and its financing) an issue for sectors and ministries, and for development in general. The problem is with the implementation of these ‘instructions’. Even in the Philippines, where instructions to integrate DRR into development planning and financing are relatively clear, there is little clarity on exactly how that should be done. In the remaining three countries, the issues with integrated financing are more obvious. In South Africa, a lack of clear guidelines or general understanding of DRR, together with a perception that ‘risk’ is someone else’s problem, has led to a lack of financing. In Indonesia, instructions within policy are relatively clear, with sectoral ministries responsible for financing DRR (alongside
substantial stand-alone, risk-dedicated projects).
Finally, Costa Rica, perhaps the most successful financing model, has used a rather unusual ‘dual’
system where sectors are supposed to finance DRR through their own work while also contributing 3% of their own budgets for DRR to CNE, the national disaster management agency.
In summary, almost nothing is shared across the five countries in terms of how DRR is financed at a national level. The only pattern noted – broadly, and not yet fully implemented – is that Costa Rica, Indonesia and the Philippines present a mixed model of financing with both stand-alone DRR investments or dedicated funds as well as DRR activities embedded within other sectors. These appear to be the most coherent
three of the five models, with a degree of clarity on how financing works, from policy through to practice. The financing of DRR in South Africa and Mexico is largely focused on a broader DRM perspective, with South Africa dominated by
‘response’ and Mexico by ‘risk transfer’. In both cases, DRR financing appears to suffer.