The Tribune

• Gov’t requests $80m ‘replenish’ of IDB facility

• Nation below average on governance ability

• IDB’s concern reform ‘insufficiently robust’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas’ ability to cope with natural disasters is set for a $160m overhaul after being ranked among the weakest in the Western Hemisphere by the Inter-American Development Bank (IDB).

The multilateral lender, in a paper seen by Tribune Business, plans to assist the Government in transforming its governance framework and public policy response to major catastrophes given that a Hurricane Dorian-strength storm is now forecast to occur more frequently - at least once every 25 years - due to climate change impacts.

The Category Five storm inflicted $3.4bn in combined damages and losses when it devastated Abaco and Grand Bahama, and the IDB said the Government’s ability to cope with and respond to such events remains “limited”. The Bahamas scored just 22 percent, out of a possible 100, when measured against an index devised by the bank to benchmark a country’s disaster risk management and response mechanisms.

While the Bahamas fared well compared to Caribbean rivals, achieving the second highest score on the Index on Disaster Risk Management Governance and Public Policy (iGOPP) index behind Jamaica, its final score was well below the 33 percent average for the wider Latin American and Caribbean region.

The IDB is proposing reforms, starting with an overhaul of disaster management laws, that it says would near-double The Bahamas’ score on this index to 39 percent and thus placing it above the regional average. A draft Bill has already been prepared, with the IDB hiring both a senior legal adviser and an extra legislative drafter to move this effort forward.

The Bill, which would likely replace both the Disaster Preparedness and Response Act 2008 and Disaster Reconstruction Authority Act 2019, will provide the foundation that triggers financial support identified by the IDB as worth up to $160m.

The paper is not clear on how this money is to be used or spent, but it adds that the Government has asked the IDB to “replenish” the $100m credit facility used to finance rapid post-hurricane response. Just $20m remains after it was drawn down in Dorian’s aftermath, implying that an $80m top-up is required, while another $100m is being sought by The Bahamas to address health pandemics.

It is unclear if the latter facility includes the combined $60m being provided to The Bahamas for its initial COVID-19 response and to overhaul the primary healthcare system/public clinics, but the IDB paper said of the $100m credit line: “This facility has currently a balance of $20m, after utilising $ 80m in response to Hurricane Dorian. The Government has requested a replenishment of the facility for natural disasters in addition to $100m for health pandemics.”

The IDB paper also called for The Bahamas to create a national emergency fund that could be used to finance post-hurricane restoration, as well as legal mandates for the Government and its agencies to protect their assets with insurance or other financial mechanisms.

Noting the urgency to improve the Government’s disaster response mechanism, the IDB said The Bahamas has suffered 14 such catastrophes in the past years through hurricanes hitting this nation. These were said to have resulted collectively in 400 deaths, impacted 50,000 persons and caused $6.7bn in damage to public infrastructure and housing.

“A probable disaster risk estimation for The Bahamas shows that more than 4,000 people are expected to be affected by coastal flooding every year. Similarly, more than 9,000 people are expected to be affected by extreme winds every year,” the paper predicted.

“The economic damage caused by climate-related hazards in The Bahamas, as a percentage of GDP, is higher than in other countries in the Caribbean region. Thus the total damage from disasters in The Bahamas from 2002 to 2022 (over US$6.7bn) is equivalent to more than 50 percent of the country’s economy in 2015. Conversely, values for Jamaica and Barbados are 17 percent and 2 percent, respectively.”

More than half that $6.7bn was incurred during Hurricane Dorian. The IDB paper estimated that a once-in-a-century storm could inflict $6bn in economic damage upon landfall in The Bahamas, and added: “While a hurricane the size of Dorian has been calculated to occur once every 50-100 years in the past, it is now estimated to occur once every 25 years due to the effects of climate change.

“Another report estimates that the expected coastal inundation area from a 50-year flood in New Providence will be 15 percent larger by 2050 than it is today due to increased precipitation due to climate change.” Turning to its iGOPP index, the IDB said higher scores meant countries will suffer lower fatalities and economic losses should a major hurricane or other natural disaster strike.

“In other words, having a robust governance framework is key to an effective use of human, technical, financial and material resources to address the risk and consequences of natural disasters. Thus, the IDB found that a governance improvement of 1 percent (measured in terms of the iGOPP score), on average, is associated with a 3 percent reduction in human losses and reduces the economic losses by 6 percent,” it added.

“According to a recent update of the index by the Bank in 2020, The Bahamas has an iGOPP score of 22 percent. Although this is the second best iGOPP score in the Caribbean region (after Jamaica’s 25 percent), it is still below the Latin American and Caribbean average of 33 percent.

“The results of the IGOPP update point out that The Bahamas has limited legal, institutional and budgetary conditions to implement effective public policies in disaster risk management, resulting in actions which are not always aligned with best international practices and generally insufficient due to scarce funding, which would benefit from more robust legal mandates.”

Breaking down the 22 percent rating, the IDB said neither the Disaster Preparedness and Response Act 2008 nor the Disaster Reconstruction Authority Act 2019 “provide a solid foundation to implement effective public policies in disaster risk management.

“Despite having some strengths, both Acts combined still leave the country with governance gaps that hinder the efforts to build a more resilient Bahamian society to natural disasters and climate change,” it added. The Bahamas also scored exceptionally low, at just 6 percent, when it came to educating its citizens on disasters risks and preparedness.

Despite the existence of the Bahamas Building Code and Building Regulation Act, which sanctions non-compliance with legally-mandated construction standards, and the Planning and Subdivision Act’s zoning requirements, the IDB report added: “There is no legal mandate for public bodies or local governments to reduce the risk within the scope of their functions and jurisdictions, particularly for vulnerable critical infrastructure, and disaster risk analysis is not mandatory for public investment projects.”

The IDB analysis also found there is no legal underpinning for the creation of emergency plans by government agencies or provision for “early warning systems”. And there is “significant room for improvement” when it comes to The Bahamas improving future resilience via disaster recovery.

The IDB paper said the Government had admitted “the current legal, institutional arrangements and budgetary arrangements for disaster risk management in the country were not optimal for effective execution”, prompting it to seek the multilateral lender’s help to, in the first instance, craft the necessary legal reforms to bring The Bahamas into line with international best practices.

“There is a high risk that the lack of staff specialised in disaster risk management legal frameworks in the Government may result in an insufficiently robust policy reform. To mitigate this risk, in addition to the technical advice provided by the IDB staff, the bank has hired one senior legal advisor to support the Government,” the IDB said.

“There is a medium to high risk that the lack of available legal drafters at the Office of the Attorney General and Ministry of Legal Affairs delays the drafting of the new legislation, which may result in the delay of the Bill’s approval on which the operation’s disbursement depends. To mitigate this risk the bank has hired a legal drafter to support the Government in drafting the Bill.”