Enhancing macroeconomic resilience to natural disasters and climate change in the small states of the Pacific

Ezequiel Cabezon, Leni Hunter, Patrizia Tumbarello, Kazuaki Washimi and Yiqun Wu

Asian-Pacific Economic Literature, 2019, vol. 33, issue 1, 113-130

Abstract: Natural disasters and climate change are interrelated macro‐critical issues affecting all Pacific small states to varying degrees. In addition to their devastating human costs, these events damage growth prospects and worsen countries’ fiscal positions. This is the first cross‐country International Monetary Fund (IMF) study assessing the impact of natural disasters on growth in the Pacific islands as a group. A panel Vector Autoregressive (VAR) analysis suggests that, for damage and losses equivalent to 1 per cent of GDP, growth drops by 0.7 percentage points in the year of the disaster. The paper also discusses a multi‐pillar framework to enhance resilience to natural disasters at the national, regional, and multilateral levels and the importance of enhancing countries’ risk management capacities. It highlights how this approach can provide a more strategic and less ad hoc framework for strengthening both ex ante and ex post resilience and what role the IMF can play.

Date: 2019
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https://doi.org/10.1111/apel.12255

Related works:
Working Paper: Enhancing Macroeconomic Resilience to Natural Disasters and Climate Change in the Small States of the Pacific (2015)
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