As President, India can guide G20's Disaster Management Initiatives

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Context: The article is discussing the role of India as the president of the G20 in guiding the organization’s disaster management initiatives. It highlights the importance of prioritising disaster risk financing within the G20 to translate good intentions into investment opportunities. The G20, under India’s presidency, has established a new working group on disaster risk reduction, which positions it well to focus on disaster risk financing and work towards achieving the targets outlined in the Sendai framework for 2030. The article also emphasises the increasing frequency of both natural and human-made disasters worldwide. It mentions that these disasters not only worsen poverty and hinder development but also contribute to social polarization within nations and communities.

As President, India can guide G20’s Disaster Management Initiatives Background

What is a Disaster?

A disaster refers to a significant disturbance in the normal functioning of a community, leading to human, material, economic, and environmental damages that surpass the community’s capacity to manage.
It results from the combination of hazards, conditions of vulnerability and insufficient capacity or measures to reduce the potential negative consequences of risk.

Classification of Disasters

On the basis of source
- Natural disasters: They are caused by natural phenomena (meteorological, geological or even biological origin). Examples of natural disasters are cyclones, tsunamis, earthquakes and volcanic eruptions which are exclusively of natural origin. Landslides, floods, drought, fires are socio-natural disasters since their causes are both natural and manmade.
- Anthropogenic disasters: They occur due to human intervention or negligence. These are associated with industries or energy generation facilities and include explosions, leakage of toxic waste, pollution, dam failure, wars or civil strife etc.
On the basis of duration
- Rapid Onset Disasters: They are characterised by the sudden and acute intensity of the impact during a short period. Earthquakes, cyclones, floods, tsunamis would fall under the category of rapid onset disasters.
- Slow Onset Disasters: Also termed as ‘Creeping Emergencies’, can be predicted much further in advance and unfold over months or even years. Climate change (global warming), desertification, soil degradation, and droughts, would fall under the category of slow onset disasters.

What is Disaster Management?

Disaster management refers to the systematic approach of planning, organising, coordinating, and implementing measures to prevent, prepare for, respond to, and recover from disasters.
It involves a range of activities and strategies aimed at reducing the impact of disasters on human lives, infrastructure, and the environment.
It includes the sum total of all activities, and measures which can be taken up before, during and after a disaster. A typical disaster management continuum consists of:
- A pre-disaster Risk Management Phase: Which includes prevention, mitigation and preparedness.
- Post-disaster Crisis Management Phase: Which includes relief, response, rehabilitation, reconstruction and recovery.

Disaster Management in India

Legal and Institutional Framework in India

Disaster management in India has evolved from an activity-based reactive setup to a proactive institutionalised structure with a holistic approach for reducing risk.
In the 1990s a ‘Disaster Management Cell’ was set up under the Ministry of Agriculture following the declaration of the decade of 1990 as the ‘International Decade for Natural Disaster Reduction’ (IDNDR) by the UN General Assembly.
The Government of India enacted the Disaster Management (DM) Act, 2005, which envisaged the creation of a three-tier structure comprising the National Disaster Management Authority (NDMA), State Disaster Management Authorities (SDMAs) and District Disaster Management Authorities (DDMAs).

Institutional framework at the National Level	Ministry of Home Affairs (MHA): At the national level, overall coordination of disaster management vests with the MHA. It coordinates with disaster affected states, line ministries, National Disaster Management Authority (NDMA), National Disaster Response Force (NDRF), National Institute of Disaster Management (NIDM), Home Guards and Civil Defence, and Armed Forces etc. National Disaster Management Authority (NDMA): It is the apex body for disaster management, constituted under the DM Act, 2005 and headed by the Prime Minister of India. It is responsible for laying down the policies, plans, and guidelines for disaster management. National Platform for Disaster Risk Reduction (NPDRR): It is a multi-stakeholder and multi- decision making body on disaster management. It is chaired by the Union Home Minister with other ministers as its members. National Executive Committee: Constituted under the DM Act, 2005 and chaired by the Union Home Secretary it acts as the coordinating and monitoring body for disaster management in India. The Cabinet Committee on Security (CCS): It is involved in decision making if the disaster has serious security implications. National Institute of Disaster Management (NIDM): It is the nodal agency responsible for human resource development, capacity building, training, research, documentation and policy advocacy in the field of disaster management. National Disaster Response Force (NDRF): The NDRF is a specialist response force that can be deployed in a threatening disaster situation or disaster. The general superintendence, direction and control of this force is vested in and exercised by the NDMA and the command and supervision of the Force vests in the Director General of National Disaster Response Force.
Institutional Framework at State Level	State Disaster Management Authority: The DM Act, 2005 mandates the creation of a State Disaster Management Authority with Chief Minister as the ex-officio Chairperson. It is responsible for laying down the State Disaster Management Policy and approving the State DM Plans in accordance with the guidelines laid down by the Union. State Executive Committee: It is responsible for coordinating and monitoring DM related activities in the state. The Chief Secretary of the state is its ex-officio chairperson. It lays down the guidelines for preparation and implementation of national and state DM plans.
Institutional Framework at the District Level	At the district level, the District Disaster Management Authority (DDMA), headed by the District Collector/District Magistrate, is responsible for overall coordination of the disaster management efforts and planning.
Local Authorities	Panchayati Raj Institutions (PRI), Municipalities, District and Cantonment Boards, and Town Planning Authorities, which control and manage civic services, ensure capacity building of their employees for managing disasters, carrying out relief, rehabilitation and reconstruction activities in the affected areas. They also prepare their disaster management plans as per the national and state guidelines.

Decoding the Editorial

The article describes how disasters have far-reaching consequences beyond just worsening poverty and hindering development. According to the 2021-22 Human Development Report, disasters also contribute to the generation of social polarization across nations and communities.

When a disaster occurs, its impact is often unevenly distributed among different groups of people and communities.
Some individuals and communities may be better equipped to withstand and recover from the disaster, while others, particularly those already facing socioeconomic challenges, may experience greater vulnerability and suffer disproportionately.

The article also talks about:

Need for Comprehensive Financial Strategies:
- The absence of effective financial risk management and insurance measures has created favourable conditions for risks to multiply and escalate, causing extensive damage to various sectors of society and the economy.
- When disasters occur, they often result in significant financial losses.
- This is particularly true for low-income economies, where the impact of disasters on GDP can be substantial.
- These losses can have severe consequences for the affected countries, hindering their economic growth, development, and overall well-being.
- To address these risks and mitigate their impact, there is a need to develop comprehensive financial strategies.
  - These strategies should focus on implementing measures such as risk assessment, risk reduction, and risk transfer through insurance and other financial mechanisms.
  - By adopting competent financial risk management practices, countries can better prepare for disasters, minimise their financial losses, and facilitate a more effective recovery process.
Role of G20 in enhancing Financial Risk Management: The G20, as an influential global organization, has a crucial role in assisting countries in enhancing their financial risk management capabilities.
- The organization has to focus on the need for states to improve their understanding of risks and integrate them into government planning and budget processes.
- The importance of regulating, legislating, and supervising the insurance industry to ensure its effectiveness in managing risks should be well indicated to the member states.
- It must focus on fostering partnerships with the private sector to transfer sovereign risk to the capital markets, allowing for more efficient financing of response, recovery, and reconstruction efforts.
- There is a need to shift from reactive (ex-post) mechanisms to proactive (ex-ante) mechanisms in terms of financing disaster response, recovery, and reconstruction.
  - By adopting ex-ante measures, such as pre-planned financial mechanisms, countries can be better prepared and allocate resources more effectively when disasters occur.
- There has to be enough focus on the lack of investment in a development-oriented approach that brings together all stakeholders within a transparent framework of action at the national level.
Role of G20’s DRRWG:
- The role of the Disaster Risk Reduction Working Group (DRRWG) within the G20 is to address the pressing issues related to disaster risk financing and reduction.
- The DRRWG recognizes the importance of prioritising disaster risk financing and aims to focus on this topic during its meetings.
- It serves as a platform to discuss and share best practices in disaster risk assessment and financing from different economies, taking into account varying levels of disaster risk and economic development.
- It aims to identify common challenges and work towards finding solutions that can help governments worldwide manage risks effectively and promote sustainable development.
- Objectives:
  - Providing a comprehensive overview of disaster risk assessment and financing practices across economies.
  - Promoting the harmonisation of definitions and methodologies for data collection and analysis, and
  - Improving access to international insurance and reinsurance markets.

By addressing these key components of a comprehensive financial management strategy for disaster risks, the DRRWG aims to contribute to the development of effective disaster risk reduction and financing strategies.

Significance of DRRWG:
- The IPCC’s Sixth Assessment Report highlights that a significant number of people live in areas that are highly vulnerable to climate change, while the Sendai Framework for Disaster Risk Reduction calls for substantial reductions in disaster risk and losses.
- As markets and society become more aware of the reality of climate change, there is a growing recognition that disaster resilience must be a priority.
- However, bridging the gap between high-level objectives and practical investments remains a challenge.
- This is where the deliberations and consensus generated at the G20 DRRWG could play a significant role in directing capital flow towards investments that make societies and economies more disaster resilient.
- The DRRWG, by providing screening criteria for investments in various areas, can help channel more capital towards disaster risk reduction investments. This can create new opportunities for innovation in sectors that are not commonly associated with disaster resilience, such as health, social protection, and natural capital.

Way Forward

India, due to its extensive experience in dealing with natural disasters, is well-positioned to take a leadership role in promoting awareness of the financial impacts of disasters.

To effectively address disaster risk, moving beyond viewing disasters as singular events and adopting a multi-hazard approach.
- This approach involves considering various emergencies and risks in financial decision-making.
The second meeting of the DRRWG in Mumbai aims to establish crucial connections between public and private actors in investment and financial decision-making. It will encompass a wide range of hazards and identify strategies to address them.
The DRRWG’s systematic and granular approach to addressing disaster risks and financial impacts can make a significant impact on global disaster risk management.
India can play a significant role in raising awareness among G20 member countries and beyond about the financial consequences associated with disasters.
India can lead in establishing a regulatory framework that strengthens the financial capacity of insurance companies to cover losses caused by disasters.
- This regulatory framework would aim to enhance the insurance industry’s ability to provide comprehensive coverage and support for disaster-related damages and losses.

Beyond the Editorial

For India specifically, prioritizing disaster risk financing aligns with the country’s vulnerability to various natural disasters such as cyclones, floods, earthquakes, and droughts. India’s large population and diverse geography make it susceptible to significant economic and social impacts from such disasters. By prioritizing disaster risk financing, India can:

Improve Disaster Response and Recovery: Adequate financing ensures a timely and effective response to disasters, allowing for swift rescue and relief operations, infrastructure repair, and recovery of affected areas.
Enhance Infrastructure Resilience: Disaster risk financing enables investments in resilient infrastructure, such as early warning systems, flood management structures, and climate-resilient housing, to withstand and recover from disasters.
Strengthen Socio-Economic Stability: Prioritising disaster risk financing reduces the burden on government finances, ensuring stability and continuity of essential services, social protection programs, and developmental initiatives even in the aftermath of a disaster.
Facilitate Economic Growth and Investment: Disaster risk financing creates an enabling environment for private sector investment in disaster-resilient industries and infrastructure, contributing to economic growth, job creation, and technological advancement.
Improve Social Protection: By integrating disaster risk financing into social protection systems, India can provide timely and targeted support to affected individuals and vulnerable communities, ensuring their well-being and reducing social inequalities.