Getting cash to those in harm’s way before a disaster strike saves money and heartache, and remittances might be one source of it
As 2020’s most powerful storm to make landfall barreled across the Philippines last weekend, causing catastrophic wind damages, tidal surges and floods, you might be thinking, “Another terrible but inevitable humanitarian disaster. There’s nothing we can do but pick up the pieces.”
Typhoon Goni was a terrifyingly large category-5 storm that crossed coastal areas three times before mercifully missing the capital Manila, then bulldozing across other parts of Luzon.
A typhoon like Goni is no longer a “once in a lifetime” event. Devastating climate events are becoming more frequent and causing more damage than ever before as a result of the climate crisis. As they do, we need to think of new ways to help climate-vulnerable people prepare for the onset of natural hazards.
But what if there were a way to protect these communities before disaster strikes? And what if it could be done by using money that is already being invested in these communities, but using it more wisely? And what if it didn’t even have to come from global aid budgets?
Members of the Zurich Flood Resilience Alliance, including my organization Mercy Corps, which has responded to nearly every disaster in the past 20 years, are looking at new ways of helping communities prepare for when disaster hits.
One of those is the role that remittances – money sent home by family members living in other countries – could play if aligned with what’s known as ‘forecast-based financing’ and platforms that connect them with money transfer organisations.
This is because having instant access to cash ahead of, rather than following, an extreme weather event allows communities to take immediate and important disaster risk reduction measures.
Remittances are a significant source of financing for the developing world, with private financial flows from diaspora communities accounting for more than half a trillion dollars, which is three times the amount of global development assistance.
The potential to harness these payments to help families ahead of disasters is huge. For example, in the Philippines remittances topped $35.2 billion in 2019, roughly 10% of the nation’s GDP.
The technology to get remittances to families before events like storms and flooding is available. And forecast-based financing is a promising innovation already used in the humanitarian field where new technology, data and weather information help predict potentially catastrophic events like storms and then release funding to aid agencies ahead of crises.
This means we can help communities better prepare ahead of storms and floods and build the resilience of communities. This could include funding to evacuate families or livestock to safer locations, to strengthen the infrastructure of homes and stock up on food, medicines and supplies in case supply chains are disrupted.
Advances in forecasting and early warning systems could alert diaspora communities, via SMS, about potential threats to family and friends in their home countries. Then have them quickly transfer funds ahead of a crisis with the potential for high humanitarian impact.
It is financial folly not to do this as studies show that every $1 spent on disaster risk reduction avoids, on average, $5 in future losses.
After all, the technology already exists. Satellites track weather systems, can detect droughts, even locust swarms and nearly everyone has access to a smartphone and internet connection.
The one thing missing is platforms that bind these disparate information systems together.
But we need to overcome these hurdles. Our recent research in partnership with Red Cross Red Crescent Climate Centre and Columbia University’s IRI found significant potential for linking workers who send money home to early warning action.
The importance of individuals retaining the right to decide when and to what extent they should spend their money cannot be overstated. But linking diaspora communities, money transfer organisations and early warning systems so that families can send cash ahead of a natural hazard is a powerful tool in helping communities reduce risk related to events like storms and floods.
With overseas development assistance and philanthropic funding shifting towards immediate response and recovery measures for the COVID19 pandemic, finding innovative financial solutions and partnerships has never been more important.
The climate crisis is triggering a confluence of cascading humanitarian disasters that will stretch community resources thinly.
However, the impacts of weather-related hazards need not be catastrophic nor inevitable.
What’s urgently needed however are creative partnerships that link money transfer organisations, early warning systems and diaspora groups to help people prepare better for the growing impacts of climate change.Intro image details: A man looks at his house buried under the pile of rubble and sand following flash floods brought by Typhoon ‘Goni’ in Barangay Busay, Daraga town, Albay province, Philippines, November 1, 2020. REUTERS/Nino N. Luces