Model for effective disaster financing strategies proposed

ISLAMABAD: The Asian Development Bank has proposed a risk-layered structure to stimulate, develop and implement financially sustainable and scalable disaster risk financing strategies and solutions to enhance the enabling environment for epidemic and pandemic risk financing.

The ‘Country Diagnostics Assessment: The Enabling Environment for Epidemic and Pandemic Risk Financing in Pakistan’ report says the coronavirus disease pandemic tested Pakistan’s financing capacity, resulting in a long-lasting and severe impact on the economy, including medical costs, lower productivity and unemployment during lockdowns, and trade and supply chain interruptions.

As such, governments and businesses need to prepare financially for pandemics and epidemics in ways similar to that for extreme weather or geophysical events, suggests the report, made available to Dawn on Wednesday.

The report quoting the Auditor-General of Pakistan stated that the government departments lacked preparedness to respond to the pandemics and financial controls were weak. While the provincial governments are responsible for health care, their insufficient contingent funds delayed the containment of the pandemic. Other areas flagged by the Auditor General report were procurements without need assessment, delayed delivery of purchased goods, and lack of warehousing facilities.

ADB stresses need to prepare financially to cope with pandemics

The report pointed out that the Covid-19 pandemic data has yet to be completed for use in developing epidemic and pandemic risk models.

All health claims-related data from the ‘Sehat Sahulat Programme’ is only available to the government and State Life Insurance Corporation, hindering the whole insurance sector’s efficient pricing of supplementary health insurance products. Significant pandemic-related business revenue losses have remained uninsured, the report says.

The country’s diagnostic assessment identifies areas of improvement to promote an enhanced environment that enables financial risk management during pandemics and epidemics. Notwithstanding the importance of risk financing instruments, these can only be fully effective under certain conditions that are often neglected.

Assessing and identifying barriers to be removed to create an enabling environment for increased uptake of these instruments is critical. The country diagnostic is intended to facilitate the development and implementation of appropriate instruments for different layers of risk.

Published in Dawn, December 26th, 2024