From Reaction to Readiness: Building Resilience through Disaster Risk Finance

Overview & Synopsis

Low- and middle-income countries face an increasingly complex risk landscape, with rising economic and human costs from climate-related disasters. Each year, cyclones, floods, droughts, and wildfires cause direct damages to homes, infrastructure, and assets, resulting in GDP losses, fiscal instability, and long-term development setbacks. Natural disasters disproportionately affect poor countries and vulnerable populations, often reversing hard-won development gains and undermining poverty reduction. The increasing frequency and severity of these disasters due to climate change are amplifying fiscal and social vulnerabilities.