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.