The World Bank and the International Monetary Fund's
Role in Disaster Relief
Thomas Hamblin
Southern New Hampshire University

Abstract
The devastation caused by natural and technological disasters is measured not only by the numbers of people killed or the severity of the damages to property and critical infrastructure, but also by the economic and financial losses incurred by the citizens and the governments of affected countries. In times of crisis, it is imperative that affected countries are given assistance in an expeditious and efficient manner. Along with its sister organization the World Bank, the International Monetary Fund (IMF) provides emergency assistance to help countries with "urgent balance of payments financing needs in the wake of natural disasters or armed conflict" (International Monetary Fund Factsheet, 2011, p.1). This emergency financial assistance is designed to be distributed rapidly to aid countries who may potentially exhaust their monetary reserves in the aftermath of a natural or technological disaster. This paper will examine why it is important for financial institutions like the IMF and the World Bank to be involved in disaster management. In addition, some of the ways which these financial institutions distribute aid to countries affected by disaster will also be identified. Keywords: World Bank, International Monetary Fund (IMF), disaster management.

The World Bank and the International Monetary Fund's
Role in Disaster Relief The IMF and its sister organization, the World Bank, were born at the end of World War II. These powerful financial institutions were created out of a need to prevent economic crises like the Great Depression and to help rebuild Europe from the devastation resulting from years of conflict. The IMF is the largest public lender of funds in the world. It is a specialized agency of the United Nations and is run by its 186 member countries. Membership is open to any country that conducts foreign policy and accepts the organization's statutes (Heakal, 2010). The IMF is responsible for the creation and maintenance of the international monetary system, the system by which international payments among countries take place. When disaster strikes in member countries, the IMF utilizes its Emergency Assistance Specific Facility to provide rapid financial assistance (Haddow, Bullock & Coppola, 2011). The IMF's goals in providing such financial assistance are to rebuild government capacity and to return stability to the local economy. The IMF will lend assistance to member countries only if a stable governing body is in place that can conduct planning and implementation of policy and can ensure the safety of IMF resources. As suggested by Haddow et al., (2011), "the IMF's goals are to rebuild government capacity and to return stability to the local economy" (p. 286), which is accomplished in a number of ways. The IMF provides emergency assistance to countries affected by natural disasters through the use of Emergency Natural Disaster Assistance (EDNA). This assistance meets immediate financing needs due to shortfalls in export earnings and/or increased imports, and to help countries avoid a serious depletion of external reserves (International Monetary Fund Factsheet, 2011). Such funding is directed toward local recovery efforts and for any economic adjustments that may be needed (Haddow et el., 2011). Under the Emergency Post-Conflict Assistance (EPCA), the IMF also provides assistance to countries in post-conflict situations. This program is intended to assist countries who have sufficient planning and policy implementation exists, but are unable to develop and implement an economic program because their capacity to do so has been damaged by conflict (International Monetary Fund Factsheet, 2011). As stated by the International Monetary Fund (2011), the aim of such funding is to "reestablish macroeconomic stability and the basis for long-term sustainable growth." Like the IMF, the World Bank is also a financial institution involved in disaster management; however, the World Bank's primary focus in on mitigation of future natural and technological disasters. The World Bank is owned collectively by 186 countries and is one of the largest sources of development assistance. Since 1980, the World Bank has approved more than 500 operations related to disaster management, amounting to more than $40 billion U.S. dollars (The World Bank Group, 2011). These operations include post-disaster reconstruction projects, as well as projects with components aimed at preventing and mitigating disaster impacts. In regard to reconstruction projects, much of the World Bank's investment focuses on the reconstruction of physical infrastructure and damaged structures. Rebuilding in urban areas often focuses upon critical services, such as medical and healthcare facilities, which play an important role in post disaster reconstruction. More common prevention and mitigation projects funded by the World Bank include forest fire prevention measures, such as early warning measures and education campaigns to discourage farmers from slash and burn agriculture that ignites forest fires; and flood prevention mechanisms, ranging from shore protection and terracing in rural areas to adaptation of production (The World Bank Group, 2011).
Discussion
The capability of international financial institutions like the IMF and the World Bank are vital for both the preparation and mitigation of hazard risks, and the response and recovery of actualized disasters (Haddow et al., 2011). In the aftermath of natural or technological disasters, it is not uncommon for countries who lack the capital reserves for disaster recovery to request an increase or additional emergency loans to fund the expensive process of response and recovery. In the absence of financial institutions, developing nations would have no means or options for recovery. This would result in prolonged and exacerbated effects of disasters, ultimately creating greater disparities between the populations of developed and under-developed countries. Furthermore, the lack of financial assistance for response and mitigation efforts could ultimately result in greater economic burdens on countries throughout the world, as our globalized economy would certainly suffer the consequences from an inability to stabilize nations who lack a viable government, both in terms of economics and principles of leadership, to assist and provide relief to its citizens in the aftermath of a disaster.

References
Haddow, G. D., Bullock, J. A., & Coppola, D. P. (2011). Introduction to emergency management. (4th ed., pp. 280-286). Burlington, MA: Elsevier.
Heakal, R. (2010, April 10). An introduction to the international monetary fund (imf). Investopedia, 1-3. Retrieved from http://www.investopedia.com/articles/03/030703.asp
International Monetary Fund. (2011, September 15). Imf emergency assistance: Supporting recovery from natural disasters and armed conflicts. Retrieved from http://www.imf.org/external/np/exr/facts/pdf/conflict.pdf
The World Bank. (2011). Disaster risk management. Retrieved from http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTURBANDEVELOPMENT/EXTDISMGMT/0,,contentMDK:20196209~menuPK:341042~pagePK:148956~piPK:216618~theSitePK:341015,00.html