Buoyed by strong economic recovery following the COVID-19 pandemic, Belize is as determined as ever to realize its full development potential. Yet as the government recognizes in its development strategy, the country’s vulnerability to disasters stands in the way. In the past few years alone, Belize has faced a drought in 2019, Hurricane Nana in 2020, and Hurricane Lisa in 2022. In addition to human impacts, such disaster events have also resulted in significant economic consequences, with average annual losses from hurricanes alone estimated at over 1 percent of gross domestic product. 

The government of Belize, with the support of the Global Facility for Disaster Reduction and Recovery (GFDRR) and the World Bank, has been taking big steps toward building its long-term resilience to disasters. A key focus of recent support has been to strengthen Belize’s ability to withstand and recover from financial shocks and stresses caused by disasters. GFDRR support has been provided under the auspices of the EU Resilient Caribbean Program (EUReCa). 

A recent milestone in this support has been the approval by the World Bank of a $20 million Development Policy Credit with a Catastrophe Deferred Drawdown Option (Cat DDO) for Belize. Through the Cat DDO, Belize will have immediate access to recovery financing following a future disaster or emergency, providing the government with critical liquidity without diverting resources from long-term development priorities. 

Prior to the approval of a Cat DDO, the World Bank works with borrower countries to develop a reform program to strengthen disaster risk management (DRM). This is part of an effort to ensure that access to recovery financing through the Cat DDO is paired with concerted efforts to bolster preparedness even before disasters. GFDRR technical assistance to Belize, in tandem with support from the World Bank, was instrumental in helping the government design its reform program, setting the stage for the Cat DDO. The program covers policy actions designed to build Belize’s financial resilience to disasters such as the April 2025 approval of a disaster risk financing (DRF) policy and implementation plan. 

A key highlight of the DRF policy and implementation plan is that it spells out how Belize will mobilize a range of DRF instruments as part of a comprehensive DRF strategy, an approach known as risk layering. The instruments include contingency funds, budget allocations, contingent credit lines, and sovereign risk transfer mechanisms. In addition, the DRF policy and implementation plan also spells out how Belize will expand access to affordable disaster risk insurance, including at the household level. In keeping with this commitment, in April 2025, the government issued regulations designed to facilitate the expansion of risk insurance to vulnerable populations. Issuance of these regulations was part of the reform program supported by GFDRR and the World Bank.