IFI governance


Evaluation finds Bank’s disaster work reactive, lacks strategy

19 June 2006

versión español

In May the Independent Evaluation Group (IEG) published an evaluation of World Bank assistance for natural disasters. The evaluation finds that the Bank lacks a strategic approach to disasters, is failing to integrate disaster preparation in its lending, and lacks sufficient expertise or coordination mechanisms. Critics of the Bank believe that the “rehabilitation and relief complex” is using disaster reconstruction as a lever for market-based reforms.

The World Bank is the largest funder of disaster recovery and reconstruction in the world. Since 1984 the Bank has financed 528 projects that addressed natural disasters, representing more than $26 billion in lending – almost 10 per cent of all Bank loan commitments. Bank financing was most frequently requested to respond to flooding, followed by drought and fire. Sub-Saharan Africa and Latin America were the regions with the largest numbers of disaster projects. Lending has been highly concentrated, with 10 countries accounting for nearly 40 per cent of activity. Bank non-lending services include “convening of donor meetings, provision of assistance with post-disaster assessments, study preparation and technical assistance”.

rarely address the root causes of natural hazards

The IEG finds that the Bank response to disasters is “flexible” and “innovative”. The Bank has “demonstrated its ability to work with other donors” and disaster projects “have had higher ratings for outcome and sustainability than the Bank’s portfolio as a whole”.

However, at the project level, objectives “rarely address the root causes of the disastrous impacts of natural hazards”. Three-year lending, based on the Emergency Recovery Loan, while offering accelerated processing, risks “rushed appraisal, poorly designed interventions, and diminished poverty impacts”. Crucial activities for long-term vulnerability reduction take longer than three years to implement and have weak borrower demand.

Natural disaster risks are foreseeable, says the IEG, yet those risks are “infrequently considered in country programmes or in project financing”. Only 9 of 59 Poverty Reduction Strategy Papers have incorporated aspects of hazard risk management. One-third of Bank Country Assistance Strategies in disaster-prone countries do not even mention disaster. Only 15 per cent of projects examined mentioned beneficiary participation.

The Bank’s less centralised approach to hazard risk management “lacks an effective way to reliably bring staff and relevant knowledge to its borrowers”. When a disaster strikes, it “can be difficult to disengage knowledgeable and experienced staff from their ongoing tasks”.

The IEG recommends that the Bank develop a strategy which assesses country risk and gives more attention to natural hazards during project appraisal and in country lending strategies. It also calls on the Bank to hire more staff with disaster experience and to develop a mechanism to mobilise them to respond to natural disasters. In its response, Bank management has acknowledged the need for a comprehensive action plan, and announced its intentions to train existing Bank staff in disaster preparedness and form a quick reaction team of disaster specialists.

The IEG evaluation does not address more fundamental critiques about the role of the Bank in disaster assistance. Walden Bello, of NGO Focus on the Global South, points out that the Bank was heavily criticised after Hurricane Mitch in Central America for fast-tracking privatisation of transport, utilities and water; and again after the Asian tsunami for “placing emphasis on the rehabilitation of commercial enterprises such as prawn farms and tourist resorts”. He argues that long-term relief and recovery aid “should be managed by a consortium led by UN agencies, with the role and programmes of the World Bank set by this grouping.”