Tue | Oct 17, 2017

Jamaican Government moves to reduce fiscal exposure to disaster

Published:Thursday | February 26, 2015 | 12:00 AM
This house in Mt Lebanus in St Thomas was damaged during Hurricane Ivan in 2004 and again by Hurricane Dennis the following year.

Jamaica is contributing $427.5 million to the Caribbean Catastrophe Risk Insurance Facility (CCRF) next fiscal year despite the fact that it has never been able to draw down on the funds after a natural disaster.

The CCRF should guarantee immediate liquidity in the event of a natural disaster such as a hurricane and earthquake of pre-defined magnitude.

Last year, Jamaica spent $215 million on the facility. Some $100 million is provided in the Budget for weather-related events. Additionally, some $570.2 million has been set aside in the Budget for projects targeting disaster mitigation.

The finance ministry said that this was necessary to actively enhance Jamaica's fiscal resilience to disaster. It said that a project is being developed in conjunction with the World Bank to prepare a national disaster risk financing and insurance strategy.

The project aims, in the short term, to strengthen the Government's understanding of its fiscal exposure to disaster losses and the country's overall financial disaster-risk profile.