By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas will have the best disaster risk management regime and governance in the Caribbean once it executes vital reforms aided by a $160m Inter-American Development Bank (IDB) loan.

The multilateral lender, in a report obtained by Tribune Business, said the latest financing - designed to help implement elements in the Disaster Risk Management Act passed by Parliament in 2022 - will take The Bahamas from a below-average performer in this area to regional leader within just five to six years.

And, based on the scale of improvement anticipated from The Bahamas implementing these reforms, the report asserted that this nation will see a 21.9 percent reduction in disaster-related deaths and a 26.5 percent fall in economic losses associated with hurricanes and other climate change-related events.

Asserting that the $160m financing is “essential” for The Bahamas to “to implement the necessary governance reforms... that will allow it to smooth out the fluctuations generated by natural disasters”, the IDB added that among the changes demanded by the loan is the long-awaited release of an updated Bahamas Building Code to help reduce the disaster exposure faced by private and public assets.

The IDB report, though, identified “the heavy workload at the Ministry of Public Works” as being among the key risks to the success of the project and its reform agenda because this threatens to delay the new Bahamas Building Code’s submission to Parliament for enactment into law. This is critical because the release of at least some of the $160m funding is tied to this happening.

Referring to its iGOPP index, which benchmarks governance and government policies that facilitate effective disaster risk management, the IDB said: “According to an IDB study based on empirical evidence from 26 Latin American and Caribbean countries, higher iGOPP scores are associated with lower fatality rates caused by disasters and contribute to a significant reduction of their economic losses.

“Particularly in countries like The Bahamas that are more vulnerable to catastrophic events like major hurricanes. In other words, having a robust governance framework is key to an effective use of human, technical, financial and material resources to address the risk and consequences of natural disasters.

“According to the most recent update of the index by the bank in 2020, The Bahamas had an iGOPP score of 21 percent, below the Latin American and Caribbean average of 35 percent. As a result of the policy reform implemented through this policy-based loan series, The Bahamas is expected to improve its iGOPP score to 39 percent, achieving the best iGOPP score in the Caribbean region.”

Detailing the policy and reform commitments made by the Davis administration to secure this latest financing, the IDB document said that as part of the “risk reduction” focus these include “publication of an update of The Bahamas Building Code to avoid the increase of vulnerability of public and private infrastructure to natural hazards, in accordance with best international building practices”.

However, this was also identified as a potentially major obstacle to releasing the $160m financing. “ Setting out the “main risks”, the IDB warned that “the heavy workload at the Ministry of Public Works might delay the submission of the update of the National Building Code to Parliament for enactment, thus delaying the operation’s disbursement.

“This risk was assessed as medium-to-low. To mitigate this risk, the Ministry of Finance will engage in May through July with the Ministry of Public Works to prioritise the approval process and submission to Parliament,” the report added.

Similarly, another key “risk” to the project’s success was that “the heavy workload of the technical staff in the Disaster Risk Management Authority might delay the review of the technical deliverables of several consultancies, which might lead to a delay in the approval of policy instruments, thus delaying the operation’s disbursement.

“This risk was assessed as high. To mitigate this risk, the Disaster Risk Management Authority will prioritise the review through scheduling and engage additional sectoral support during May.” Meanwhile, other policy commitments include developing a “comprehensive financial management strategy for disaster risk management” in The Bahamas.

This will include “financial instruments that finance disaster risk management actions after a disaster has occurred - response, rehabilitation and recovery - but also those that are carried out before the occurrence of a natural hazard, aimed at dimensioning, reducing, preparing and financially protecting against disaster risk”.

The Government has also promised to ensure the “disaster prevention fund has received resources to finance [pre-disaster] risk management activities such as risk analysis, risk reduction and disaster preparedness, aimed at dimensioning and reducing disaster risk and preparing to respond to disasters”.

And that a ‘Non-Governmental Consultation Council, featuring “individuals who possess qualifications, skills or experience in the management of disaster risks, community-based organisations, non-profit organisations, corporations and other private organisations” is convened at least once per year following its creation.

“The programme will benefit the population of The Bahamas that is exposed to disasters, which amounts to 344,279 people in the case of hurricane extreme winds. This overwhelmingly comprises the affected population that is exposed to the impacts of coastal flooding in The Bahamas, which amounts to 36,502 people,” the IDB report said.

“Empirical evidence suggests that a disaster risk management governance improvement equivalent to an increase of one point in the iGOPP reduces, on average, by 3 percent the human fatalities caused by disasters and human economic losses by 4 percent.

“Applying this evidence, The Bahamas’ expected iGOPP gain of 18 points yields substantial reductions in future disaster impacts, both in human and economic terms.... For The Bahamas, which is expected to improve its iGOPP score from 21 to 39, the model implies a 21.9 percent additional reduction in disaster-related fatalities, relative to the baseline at iGOPP,” the report added.

“For economic losses, regression shows that a one-point increase in the Resilience to Economic Loss (REL) index subset of the iGOPP leads to a 4.3 percent reduction in expected economic losses. The Bahamas’ REL improvement from 6.17 to 13.3 corresponds to an estimated 26.5 percent decline in disaster-related economic losses.”

The IDB report added: “The programme directly contributes to closing development gaps in The Bahamas by enhancing institutional capacity to manage disaster risk across the disaster risk management cycle: Prevention, preparedness, response and recovery.

“This has a particularly strong redistributive effect by improving the resilience of the most vulnerable segments of society - those exposed to hurricanes and coastal flooding, including low income and geographically-isolated communities - as well as women and people with disabilities who are disproportionately affected by disasters.

“The commitment by the Government of The Bahamas to allocate resources to public sectors such as the Ministry of Public Works and Family Island Affairs, in addition to the allocation of resources to the Disaster Prevention Fund provides incentives for the sectoral implementation of ex-ante disaster risk reduction activities such as to support the enforcement of the updated building code for The Bahamas and increased regulatory standards,” it continued.

“Even though the results achieved under the current policy-based loan by 2025 put The Bahamas as a leader in the Caribbean region in terms of disaster risk management governance, these should not be considered the final target. Building on the reforms supported through this operation, The Bahamas has the opportunity to further strengthen its disaster risk management governance and improve its iGOPP score over the medium-long term.”