Disaster Resilient and Responsive Public Financial Management : 360 Degree Resilience Background Paper

Public financial management (PFM) is one of the key government instruments of supporting effective preparation, response, and resilience to disasters. Yet many PFM institutions, systems, and processes lack disaster resilience and responsiveness. In times of growing awareness of the impacts of climate change on good governance as well as the impacts of the recent COVID-19 pandemic on the way public finances are planned, executed, and accounted for, governments need to be able to optimize the allocation and execution of public resources. Disaster resilient and responsive public financial management (DRR-PFM) promotes (i) proactive and planned disaster risk reduction and climate change adaptation; and (ii) timely and fiscally prudent response and recovery from natural disasters and other shocks and stresses. Fiscal response to disasters in the Caribbean is neither strategic nor efficient in most instances, and emergency finance procedures are often undocumented, ad hoc, coincidental and sometimes inefficient. Surprisingly, given the frequency of natural disasters in the Caribbean, national authorities provide little guidance on how to expedite public financial, public procurement, and public investment management to swiftly respond to or rebuild after disasters. Public assets are not systematically tracked and are financially under-protected, making it difficult to quickly carry out accurate post-disaster needs assessments or to replace destroyed assets