The Risk of the Financial Crisis for Disaster Management

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This first decade of the 21st century has been fraught with new threats and uncertainties, ranging from the so-called “war on terror,” to climate adaptation, to an impending influenza pandemic caused by the avian or swine viruses. Awareness has been raised amongst national disaster managers in the health sector and they have been trained to face an increasing variety of hazards, some still to materialize at national level.

In a matter of a couple of years, a new crisis developed to compound and overshadow all others: the financial crisis threatening the economy of many countries, including the most developed.

How may this man-made crisis affect public health in Latin America and the Caribbean? What are the implications for the disaster management programs of Member States? How can the Ministries of Health adapt and mitigate the emergency consequences?

The Potential Regional Impact on Public Health

In response to the concerns expressed by Member States, on 19 January WHO convened a high level consultation on the impact of the global financial and economic crisis. The most relevant disaster-related conclusions are dependent on the realities of the Americas:

  • All countries will be affected but some more than others. Countries affected by conflict or natural disasters, those with weak institutions or limited financial reserves are particularly vulnerable. Others, particularly small island States, will face an economic downturn while coping with the imminent impact of climate change.
  • In developed or developing countries, the poor —and those made poor through loss of income or housing— will be the hardest hit. More will fall back into poverty.
  • Aid flows for health, private or public, that had doubled globally between 2000 and 2006 are now declining at a time of greater need. How this will affect LAC remains under debate. Although the participants in the Consultation provided encouraging examples of short-term ways in which to protect health and health spending in times of crisis, a longer-term perspective is still lacking.
  • If government budgets come under pressure and household incomes drop further, the demand on public services will increase, leading to possible deterioration of the quality of care.
  • Countries will be pressed to make their health spending more effective while avoiding the trap of neglecting primary health care and prevention in favor of the politically more attractive curative care.
  • Addressing the broader social and economic determinants of health will require a broader multisectorial approach.

Above all, the participants stressed that a key characteristic of the crisis is the speed with which it evolves and the uncertainty facing policy makers. “Rapid assessments, effective communications, exchange of experience, effective and flexible working arrangements will all be essential to success” … Fortunately, these approaches are not unfamiliar to disaster managers!

The Implications for Disaster Managers

Several articles and reports analyzed the potential impact of the crisis on humanitarian assistance. The conclusions offer material for reflection for the national disaster coordinators.

  • The financial crisis has the potential to increase the number of severe emergencies, either through diminished resilience of communities, deterioration of prevention and early warning systems or merely through social unrest. Small emergencies of the past will become major crises. This, is in addition to this decade’s vulnerability from terrorism, pandemic influenza or climate change.
  • The proportion of poor in the affected population will increase the need and urgency for rapid and more sustained survival and livelihood assistance.
  • Unspent national budget lines that used to be creatively redirected to provide relief will be harder to identify in periods of scarcity. Rapid and generous external funding to which disaster coordinators have grown accustomed may also decline and definitely be less flexible. Although the Center for Global Development observed that “after each previous financial crisis in a donor country since 1970, the country’s aid has declined,” it is unclear whether this decline in development assistance will affect in the same extent, or at all, the post disaster relief assistance. In any case, repeated occurrence of local emergencies may fail to attract the required attention from the international public. “Donor fatigue” may set in earlier when poverty increases at home.
  • Pressure and demands on the disaster program personnel in the Ministry of Health will rise, distracting them further from prevention/preparedness activities with a longer-term benefit. Valuable and cost-effective long-term initiatives such as “Safe Hospitals” may become a casualty, compounding the vulnerability of the nation and delaying its sustainable and safe development.

How to Mitigate the Potential Emergency Consequences?

The recommendations from the participants at the WHO Consultation are relevant to the disaster managers’ response to the crisis:

  • Leadership: the Ministry of Health and its Disaster Program should speak out multisectorially in favor of health in emergencies. Contacts with the Civil Protection or coordinating mechanism should be strengthened. Working in isolation is, more than ever, self-defeating.
  • Monitoring and analysis: If the crisis is likely to evolve rapidly, the consequences can be anticipated with good quality information. Rapid assessment of emergencies will be essential.
  • Spending: Authorities should resist the temptation of curtailing the resources of the Disaster department. On the contrary, increasing responsibilities justify additional resources. Response can no longer rely on ad hoc funding and external support. Countries should accelerate their efforts to establish formally a revolving emergency fund in the health sector. This should be part of any government social and financial rescue package.
  • Policies: Political support to the Disaster program should be reiterated. Direct reporting and access to decision makers will be essential. A longer-term approach should be maintained. In particular, prevention measures and contingency planning should not be substituted for emergency rescue patchwork under political pressure. A sustained commitment to increasing the safety of health facilities is critical as overstretched services may have less spare capacity for emergency response. Natural disasters will keep occurring!
  • A more efficient way of doing business: This is applicable to the Ministry of Health as well as to the international community.
    • At country level, efforts for health response to emergencies are often overlapping among agencies. In a budget crisis, there should be no place for duplication or competition between the Ministry of Health, the Red Cross and NGOs as needs will far exceed resources. Within the Ministry, the authorities should increase their effort to streamline the response and adopt a unique multi-hazard mechanism to mobilize and coordinate the response to unusual outbreaks, chemical accidents, social disturbances or natural disasters. More important perhaps, authorities should remember that prevention is more cost effective than cure… A tight budget does NOT mean that it is the time to reduce this effort —on the contrary.
    • At international level, cost-effectiveness of emergency assistance should become a concern. Those costly relief measures which are more effective in terms of public relations than lives saved should give way to a measured and pragmatic response in support of local health services. Increased reliance on local personnel should be privileged. Minimum humanitarian standards such as the Sphere Project (www.sphereproject.org) may need adaptation to local and economic circumstances with a view to providing most to the largest number of beneficiaries, affected or not by the emergency. Recipients should adopt a more critical approach pointing out the shortcomings of external assistance.

In summary, no one knows for sure how the crisis will evolve and how severely it will affect the humanitarian situation. However, all signs indicate a potential source of trouble. National disaster managers must hope for the best, but quietly prepare for the worst.

Emergency Preparedness and Disaster Relief

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