Economics & Development

This report presents the findings of analysis and recommendations for resilient recovery planning in Grindavík, affected by multiple evacuations and ongoing volcanic and seismic activity. This work was led by the World Bank team of experts and is based on desk research and analysis of international experience and is underpinned by consultations with stakeholders, including representatives of central government agencies, local authorities, civil society, and the private sector. The purpose of this report is to inform the deliberations of the Grindavík Executive Committee and decision-makers in Iceland. This report is structured across four key areas: policy and governance, safety and preparedness, people and social infrastructure, and critical infrastructure and economic activities. A central recommendation is that a resilient recovery framework should enable authorities and stakeholders to recover in a manner that is risk-informed, gradual, and inclusive and that contributes to public safety, trust, and social cohesion. The analysis identifies immediate policy priorities in the housing, insurance, and social policy sectors: policy actions should reflect a focus on risk analysis, communication, and preparedness; should embed flexibility; and should be aligned with a framework/roadmap that clearly articulates key principles, activities, and arrangements. In the medium to long term, recovery will require a focus on decision-making under uncertainty, revitalization of Grindavík as part of a broader Reykjanes Peninsula approach, and strengthening of resilience, through risk-informed investments and actions to enhance societal resilience, institutional resilience (via recovery planning), physical resilience (particularly of critical infrastructure), and economic/financial resilience (in anticipation of future emergencies in the peninsula and in the country as a whole). Focusing on the immediate and medium-term priorities could generate important results for the government and the society; specifically, it could meet key immediate needs of the Grindavík community, improve governance for recovery planning, and contribute to economic growth and improved resilience at scale.