Fiscal Disaster Risk Assessment: Options for Consideration

March 2016

The objective of the report is to raise awareness of the financial impacts that disasters have onthe budget of the Government of Pakistan (GoP) and to form the basis for a continued dialoguebetween the GoP and the World Bank on the potential development of a strategy for financingdisaster losses. The study presents a series of complementary options for development of a nationaldisaster-risk financing strategy, based on a preliminary fiscal risk analysis and a preliminary reviewof the current budget management related to disasters in Pakistan. The recommendations providedin this document are therefore a starting point for a collaborative discussion with the GoP on thepotential development of a broad Disaster Risk Financing and Insurance (DRFI) program that wouldequip the Ministry of Finance with additional instruments to manage the contingent liability posedby disasters. This report follows a request from the government for advisory services from the WorldBank in the areas of disaster risk identification and the resulting fiscal impacts on the state.