Connect with us

Development

Strengthening Indonesia’s Fiscal Resilience to Natural Disasters and Health-Related Shocks

Published

on

The World Bank’s Board of Executive Directors today approved a $500 million loan to strengthen Indonesia’s financial and fiscal resilience. The loan will help the country build and strengthen its financial response to natural disasters, climate risks, and health-related shocks.

Such shocks and disasters have become a constant threat to Indonesia’s development progress. From 2014 to 2018, the central government spent between US$90 million and US$500 million annually on disaster response and recovery, while local governments spent an estimated additional $250 million over the same period.

The cost of disasters is expected to increase further due to climate change and urban growth, adding to the burden on public spending. The needs are particularly acute now, with Indonesia experiencing multiple financial, fiscal, and social impacts due to the COVID-19 pandemic.

“Financial preparedness for disasters, climate shocks, and health crises such as COVID-19 is increasingly important for Indonesia. This support will help the government deliver a more targeted and timely response, reducing the impact of disasters and helping to protect Indonesia’s development progress,” said Sri Mulyani Indrawati, Minister of Finance of the Republic of Indonesia.

Planning an effective financial response after disasters and climate shocks helps to protect the budget and ultimately the population. By reducing the impacts of disasters, such planning can help protect the poor and vulnerable who often bear the brunt of disasters as they tend to live in hazard areas, lack access to basic services, and have limited access to financial resources to cope with the aftermath.

The new project will support the Government’s National Disaster Risk Finance and Insurance Strategy by strengthening Indonesia’s fiscal and financial resilience through a Pooling Fund for Disasters. This fund will become the central mechanism through which post-disaster financing can flow from different sources. The fund will look to leverage domestic and international insurance markets to provide financial capacity to backstop the fund.

The project will also help ensure effective and transparent flow of the funds to relevant government agencies, including budget tracking on disaster-related expenditures, faster social assistance payments for victims of disasters, and improved preparedness planning for health shocks. Central and local government agencies will receive additional, faster, and more effective financial support after a disaster.

“The improved availability and flow of funds will ultimately support the population of Indonesia who will benefit from faster and better targeted response to disaster and health shocks. This will particularly benefit the poorest and most vulnerable, who are most affected by delayed disaster response and often lose their livelihoods and incomes, which keeps them in poverty,” said Satu Kahkonen, World Bank Country Director for Indonesia and Timor-Leste.

The project is supported by a $14 million grant from the Global Risk Financing Facility (GRiF) to assist building technical capacity, environmental and social management systems, bring new technology to the management of the Pooling Fund, and invest in evaluations and learning, including how to best serve the most  vulnerable groups. Supported by a Multi-Donor Trust Fund with over $200 million from Germany and the United Kingdom, GRiF provides grants and technical expertise to help developing countries safeguard progress and recover more quickly from the financial impacts of climate shocks, disasters, and crises.

Continue Reading
Comments

Development

Lao PDR: New Project to Protect Landscapes and Enhance Livelihoods

Published

on

The World Bank’s Board of Executive Directors today approved a US$57 million project to help Lao PDR promote sustainable forest management, improve protected area management, and enhance livelihoods opportunities in eight provinces across the country. Project funding comes from the World Bank’s International Development Association, with contributions from the Global Environment Facility and the Canada-World Bank Clean Energy and Forest Climate Facility.

The Lao Landscapes and Livelihoods Project will support economic recovery in light of the adverse impacts of the COVID-19 pandemic by focusing on preservation of natural capital such as forests, biodiversity, water resources, soil, and land. The Project will help communities in over 600 villages and 25 forest areas to secure livelihoods and jobs from sustainably managed forests, including opportunities in timber and non-timber products, and nature-based tourism.  

“This project will be crucial to helping Lao PDR recover from the global coronavirus shock by protecting and enhancing its natural capital, and supporting the creation of green jobs in vulnerable communities,” said the World Bank Lao PDR Country Manager Nicola Pontara.

Despite enjoying sustained periods of high economic growth in the last three decades, Lao PDR has experienced a gradual deterioration of its natural capital, making vulnerable rural people more susceptible to floods and droughts while jeopardizing their access to food, fiber, fresh water and income.

The Government of Lao PDR will implement the project through the Department of Forestry at the Ministry of Agriculture and Forestry. To create jobs and livelihoods and secure environmental benefits, the project will develop environmentally and socially sustainable partnerships among communities, government, nature-based-tourism companies, and forest plantations.

The Lao Landscapes and Livelihoods Project complements other partnerships between Laos and the World Bank on biodiversity protection, carbon emission reductions and nature-based tourism. It also supports the priorities of the government’s ninth National Socio-Economic Development Plan for 2021-25 and the 2030 National Green Growth Strategy.

Continue Reading

Development

Two-Thirds of Poorer Countries Are Cutting Education Budgets Due to COVID-19

Published

on

Children in Côte d'Ivoire wear face masks as they return to school after temporary closures due to COVID-19. © UNICEF/Frank Dejongh

Education budgets are not adjusting proportionately to the challenges brought about by COVID-19, especially in poorer countries.  Despite additional funding needs, two-thirds of low- and lower-middle-income countries have, in fact, cut their public education budgets since the onset of the Covid-19 pandemic, according to the new joint World Bank – UNESCO Education Finance Watch (EFW)

In comparison, only one-third of upper-middle and high-income countries have reduced their budgets.  These budget cuts have been relatively small thus far, but there is a danger that future cuts will be larger, as the pandemic continues to take its economic toll, and fiscal positions worsen.  These differing trends imply a significant widening of the already large spending disparities seen between low- and high-income countries.

According to the new report, prior to the COVID-19 pandemic, in 2018-19, high-income countries were spending annually the equivalent of US$8,501 for every child or youth’s education compared to US$48 in low-income countries. COVID-19 is only widening this huge per-capita education spending gap between rich and poor countries.

EFW stresses that the education finance challenge is not only about mobilizing resources, but also about improving the effectiveness of funding. Unfortunately, recent increases in public education spending have been associated with relatively small improvements in education outcomes. Although access to education has improved, the learning poverty rate – the proportion of 10-year-olds unable to read a short, age-appropriate text – was 53 percent in low- and middle-income countries prior to COVID-19, compared to only 9 percent for high-income countries.  COVID-19 related school closures are likely to increase this 53 percent share to as much as 63 percent.

“This is a critical moment where countries need to recover the learning losses the pandemic is generating, invest in remedial education, and use this window of opportunity to build more effective, equitable, and resilient systems,” said Mamta Murthi, World Bank Vice President for Human Development.  “The learning poverty crisis that existed before COVID-19 is becoming even more severe, and we are also concerned about how unequal the impact is.  Countries and the international development community must invest more and invest better in education systems and strengthen the link between spending and learning and other human capital outcomes.”

EFW notes that global spending on education has increased over the last 10 years, but the signs are that the pandemic may interrupt this upward trend. Funding for education has grown most rapidly in low- and lower-middle-income countries, where the gaps between the funding needed to achieve the SDGs and current allocations are the widest. The deterioration in government finances over the medium-term suggests that without concerted efforts to prioritize education, the outlook for mobilizing the domestic resources required for education will worsen.

Aid for education has increased by 21 percent over the last 10 years. Disbursements had increased rapidly in the 2000s and fell between 2010 and 2014 in the aftermath of the great financial crisis. However, since 2014, aid to education has increased by 30 percent, reaching its highest recorded level of US$ 15.9 billion in 2019. However, fiscal constraints, other sectoral needs, and changes in student mobility patterns, suggest that external aid for education might fall at a time when it is needed most.    

“External financing is key to support the education opportunities of the world’s poorest,” said Stefania Giannini, Assistant Director-General at UNESCO. “Yet donor countries are likely – and some have already begun – to shift their budget away from aid to domestic priorities. Health and other emergencies are also competing for funds.  We foresee a challenging environment for countries reliant on education aid. UNESCO estimates that it may fall by US$ 2 billion from its peak in 2020 and not return to 2018 levels for another six years.” 

The EFW is a collaborative effort between the World Bank and the UNESCO Global Education Monitoring Report team.  It will be produced annually following the main release of spending data by UNESCO’s Institute of Statistics.  The EFW aims to draw together the best data available on all sources of education funding and monitor efforts to improve information on the levels and use of education funding.  However, good quality and timely information on government, household, and aid spending in education is not readily available in all countries.  This hinders planning and monitoring at a time when countries cannot afford any missteps.

Continue Reading

Development

Global Alliance on Circular Economy and Resource Efficiency

Published

on

Bringing together governments and relevant networks and organizations, the Global Alliance on Circular Economy and Resource Efficiency (GACERE) aims to provide a global impetus to initiatives related to the circular economy transition, resource efficiency, sustainable consumption and production patterns, and inclusive and sustainable industrialization.

GACERE is being established by the European Commission on behalf of the European Union (EU), and by the United Nations Environment Programme (UNEP), in coordination with the United Nations Industrial Development Organization (UNIDO).

GACERE will be launched on Monday 22 February 2021 from 12:00 until 13:15 CET on the margins of the first segment of the fifth meeting of the United Nations Environment Assembly.

The event will be hosted by Virginijus Sinkevičius, EU Commissioner for Environment, Oceans and Fisheries; Inger Andersen, United Nations Under-Secretary-General and UNEP’s Executive Director; and LI Yong, UNIDO’s Director General.

Ministers of countries which have joined GACERE and other stakeholders will provide their perspectives on the Alliance’s intended role in supporting a global just transition to circular and resource-efficient economies and the achievement of the 2030 Agenda for Sustainable Development.

Continue Reading

Publications

Latest

Finance21 mins ago

Estonia provides good support to jobseekers, but does not reach everybody

The Estonian labour market has outperformed most EU countries after the global financial crisis. The employment rate of people in...

Energy News2 hours ago

New EU energy labels applicable from 1 March 2021

To help EU consumers cut their energy bills and carbon footprint, a brand new version of the widely-recognised EU energy...

Energy News4 hours ago

E-Boda-Bodas: a promising day for electric transportation in East Africa

Forty-nine motorcycles made little noise but raised much interest in Nairobi’s Karura Forest this morning, as the UN Environment Programme...

Americas6 hours ago

Biden’s Syria strikes don’t make him a centrist Democrat – they make him a neocon

Biden’s Syria strikes last week left many of his supporters, including me, surprised. The Syria strikes don’t make Biden the...

Reports6 hours ago

65% of Adults Think Race, Ethnicity or National Origin Affects Job Opportunities

A recent Ipsos-World Economic Forum survey has found that 65% of all adults believe that, in their country, someone’s race,...

Americas8 hours ago

Charting an American Return to Reason: Nuclear Policy Goals on North Korea

“All our dignity consists in thought….It is upon this that we must depend…Let us labor then to think well: this...

Tourism9 hours ago

Harnessing the Power of Culture and Creativity in Tourism Recovery

The shared values and close ties between tourism and culture stakeholders means both sectors can work together to ensure inclusive...

Trending