World Bank warns of high cost to cities of natural disasters

14 Oct 16

Natural disasters pose the greatest risk to cities in an increasingly urbanised world, and could cost $314bn worldwide each year by 2030, the World Bank has warned.

This compared with a $250bn cost today, and came with the risk that 77m more urban residents might be pushed into poverty.

The Investing in Urban Resilience report by the World Bank and the Global Facility for Disaster Reduction and Recovery has been issued in advance of the UN Habitat III conference in Quito, Ecuador, next week.

It said cities were home to some 55% of the world’s population and were the engines of global growth.

But high population density and concentrations of assets and commercial activity made them “extremely vulnerable to the wide range of natural and manmade shocks and stresses”.

Failure to invest in resilience would result in significant human and economic damage, in particular to poorer people.

Ede Ijjasz-Vasquez, senior director for the World Bank’s Social, Urban, Rural and Resilience Global Practice, said: “Rapid growth, without efforts to boost resilience, is exposing cities around the world to huge risk.

“Population growth and human migration are on the rise, and climate change is poised to have dramatic effects, which means we’re approaching a tipping point for the safety of cities all over the world. We need to invest today in resilience measures that will help secure a safe and prosperous future for our cities and the people who live in them.”

The report said there was “a window of opportunity” to secure money for resilience projects. This was because global capital’s search for returns in the current low interest rate climate meant that institutional investors and sovereign funds “have increasingly signalled willingness to consider financing investments in the developing world”.

Major obstacles limiting resilience investments in developing cities included lack of local government capacity to plan, finance, and implement projects, high up-front costs and lack of private-sector confidence.

The World Bank noted it could help tackle these problems with pre-development grant financing, project preparation, technical assistance,  and advisory and project design services.

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