Dominican Republic: Building Physical and Fiscal Resilience to Ensure Shared Prosperity

Context and Objectives
The Dominican Republic is exposed to high levels of risk from meteorological and geophysical hazards, and climate change is further exacerbating meteorological hazards. Based on historical data, disaster losses have been estimated at 0.69% of GDP or US$ 420 million per year over the period 1961-2014. The Dominican Republic is one of the top high-risk countries in the world, ranking second in terms of vulnerability of its GDP to three or more natural hazards (i.e. 92% of the GDP is located in areas at risk). 
The high costs of recovery and reconstruction have resulted in reduced fiscal space and makes it harder for the Government to implement poverty reduction policies. The lack of financial protection strategy results in high opportunity costs, as resources previously allocated to development projects have to be reassigned to cover the losses. Reassignments through ad-hoc process also delay emergency and recovery efforts.
The ACP-EU NDRR Project focuses on improving the government’s capacity to build physical and fiscal resilience to disasters, in order to ensure shared prosperity.  

Main Activities
The technical assistance helps to improve the government’s capacity to build physical and fiscal resilience to disaster, by working on three components: 
Component 1: Promoting disaster and climate risk reduction policies in priority sectors; 
Component 2: Supporting the Ministry of Finance in developing technical and institutional capacity in disaster risk financing; 
Component 3: Targeting disaster risk management policies and investments towards promoting shared prosperity. 

Results
The technical assistance is making good progress in all components. Results to date include:

Component 1:

  • A loss assessment tool (SIRED-RD) was developed, which assesses the economic losses infrastructure sectors suffer from disasters. The tool will inform the Ministry of Economy, Planning and Development (MEPyD) on potential needs for recovery and reconstruction. 
  • A set of indicators has been developed to measure the impact of policy reforms on resilience.

Component 2: 

  • Country Disaster Risk Profiles for earthquake and windstorms have been developed.
  • Two knowledge notes on the liabilities associated to disasters and on financial protection mechanisms were drafted.
  • A Working Policy Paper on the impact of hurricane strikes on short-term economic activity in the Dominican Republic was published.
  • An initial assessment of options to manage fiscal risks associated with disasters started.
  • Advice was provided to the Ministry of Finance on the creation of a Fiscal Risk Unit within the Ministry, and on how to best share with other countries in the region experiences on financial protection against disasters.
  • Support is being provided to the National Geographic Institute (under the MEPyD) to set up national Spatial Data Infrastructure, which is to generate actionable data risk information to inform public investments and territorial planning. 

Component 3:

  • An econometric model to understand the impact of disasters and climate-related shocks on poverty and other socioeconomic indicators was developed and presented and discussed with the Minister of the MEPyD and the Economic and Social Analysis Advisory Unit of the MEPyD.
  • Work has started with the National Statistics Office for the design of a Survey of Wellbeing via Instant and Frequent Tracking (SWIFT), to have a deeper understanding of the effects of disasters on other dimensions of well-being, such as health, education, and access to services. The survey will allow to set a baseline to enable the government to monitor the effects of a particular disaster on household welfare.  

Partnerships and Coordination
The technical assistance project is undertaken jointly with the Ministry of Finance and the MEPyD. 
The EU Delegation is invited to meetings on this ACP-EU NDRR project in the Dominican Republic. There is furthermore a good standing working relation with the EU Delegation, UNDP and JICA (Japan International Cooperation Agency) to discuss on-going initiatives in the Dominican Republic funded by other donors. 
 

Useful Links

The working policy paper on the impact of hurricane strikes on economic activity is available here.

The Dominican Republic Risk Profile can is available in English here and in Spanish here.

Region
  • Caribbean
Priority area
  • Mainstreaming of disaster risk reduction (DRR)
Window of Action
  • Window 2
Amount approved
  • $800,000
Co-financing
  • $0
Duration
  • 12/2016 - 07/2019