Photo: Flooding Panama
Panama will substantially improve its ability to respond to natural disasters with a $100 million Inter-American Development Bank (IDB) standby loan.
When disasters such as earthquakes and floods strike, the government can quickly draw from the facility to provide immediate assistance and to resume basic services to victims.
“Rapid access to liquidity will reduce the impact that any emergency may have on public finances, ensuring greater stability in long-term economic growth,” said Juan José Durante, the IDB’s project team leader.
The World Bank ranks Panama 14th among countries with the greatest exposure to multiple natural hazards.
Among recent examples of such hazards was the severe flooding in late 2010 that disrupted both navigation on the Panama Canal and the supply of potable water to much of the capital. Close to 16,000 people were affected, and the cost ofrepairing public infrastructure and promoting economic recovery totaled nearly $150 million.
Climate change may increase Panama’s vulnerability to extreme weather events. The Economic Commission for Latin America and the Caribbean warns that damages caused by severe storms to agriculture, tourism, and Canal traffic could exceed 14 percent of the country’s gross domestic product.
The loan approved by the IDB may be used to finance a wide range of goods and services needed to respond to such emergencies, including procuring medical equipment, vaccines and medicines, facilities and equipment for temporary shelters and food for affected populations. The loan could also be used to cover the cost of emergency personnel to attend to victims, equipment rental and energy facilities, transportation, communications and storage, temporary infrastructure repair and the resumption of basic services immediately after a disaster.