Government and the World Bank launching a strategic framework and roadmap for a Disaster Reserve Fund (DRF) is being hailed (see related story) as a significant step in strengthening how the country manages public finances to protect lives and livelihoods when calamities occur. It was developed in response to lessons learnt from the aftermath of Hurricane Irma in 2017, which caused US $2.7 billion in damages, destroyed approximately 90% of the island's infrastructure and resulted in a lengthy recovery process that relied heavily on external assistance.
The fund is meant to ensure that St. Maarten does not have to start from zero following a future disaster. It will serve as a financial safety net for immediate post-disaster response, help protect vulnerable households from falling into poverty and support a faster and more self-directed recovery process.
The goal is also to move the country away from ad hoc post-disaster financing by providing pre-arranged liquidity that allows government to respond quickly and effectively. The initiative will be capitalised through an arrangement under which repayments from a reconstruction loan to Princess Juliana International Airport (PJIA) advanced by government will be directed into the fund.
The DRF is being developed under the Dutch-sponsored Trust Fund established in 2018 and administered by the World Bank to support the country's recovery from Irma and strengthen long-term resilience. The Netherlands earmarked more than half-a-billion US dollars for this purpose.
That same year St. Maarten joined the Caribbean Catastrophic Risk Insurance Facility (CCRIF), so government has some regional coverage for damage resulting from earthquakes, tropical cyclones and excess rainfall. The country’s initial membership was paid with means from the Trust Fund.
Experience proves that having money readily available after disasters can make a huge difference. While it may hopefully never be needed, access is practically indispensable.
