If you follow natural disasters in the news, such as giant earthquakes or massive storms, the current drought in Somalia fits the script. Nearly half of the country’s 10 million people are in dire need. Images of extreme hunger have hit the media. The United Nations has asked for $825 million in donations.
As in many disasters, only about half the money may be given – perhaps too late – and likely distributed by aid groups that compete with each other or overlap in their mission. In a few years, this cycle of tragedy and begging might then be repeated.
Does it always need to be this way? Or, as two aid experts ask in a new book: “Do extreme events have to turn into disasters with huge losses of life and suffering? Should responses be full of public emotion, painful media images, and political blame games....”
The book, “Dull Disasters? How Planning Ahead Will Make a Difference,” is by Stefan Dercon, chief economist of the United Kingdom’s Department for International Development, and Daniel Clarke from the World Bank. They make a case for changing this dynamic by providing incentives for countries to reduce the risk from disasters through insurance on a regionwide scale.
Many wealthy countries already do something like this. They arrange insurance for farmers in drought zones, for example, or for homeowners who live in flood plains. Yet only in the past decade has the idea of large-scale disaster insurance caught on in the poorest countries.
A few years ago, another African country, Senegal, suffered a similar drought as the current one in Somalia. Yet it had paid into an initiative called the African Risk Capacity (ARC), a mutual insurance plan set up in 2014 that includes eight of the continent’s countries. As the drought hit, Senegal quickly received a payout and rushed food to 750,000 people. The world did not see pictures of starving children. Nor was there a massive campaign to ask for donations.
In 2015, the ARC paid $26 million to three African countries hit by drought. Last year, it gave $8 million to Malawi. And from that success it hopes to have at least 30 countries paying premiums for disaster insurance by 2020. Two other regions of the world – the Pacific and the Caribbean/Central America – have similar schemes. In 2016, for example, Haiti received almost $20 million after hurricane Matthew.
These insurance facilities do not eliminate the need for aid donations. In fact, the ARC was set up with money from Germany and Britain. And countries with fragile governments may not be capable of running such a program. In addition, private insurance companies are still struggling to anticipate and measure natural hazards.
Yet the idea is steadily changing reactions to disasters, even making them “dull.” As the book’s authors write: “We want to make the responses to these events less emotional, less political, less headline-grabbing, and more something that could become ‘business as usual.’ ”