Central American countries formalise CCRIF partnership
A number of Central American countries are set to join risk pooling facility CCRIF SPC, formerly the Caribbean Catastrophe Risk Insurance Facility.
The Council of Ministers of Finance of Central America, Panama and the Dominican Republic (COSEFIN) signed the memorandum of understanding that will enable the countries to join the facility to access low cost, high quality sovereign catastrophe risk insurance.
During the ceremony, CCRIF SPC and the Government of Nicaragua also signed a participation agreement for Nicaragua to become the first Central American country to formally join the facility. Other member nations of COSEFIN are expected to join CCRIF SPC later this year and in 2016.
“For Nicaragua, it is an honour to be the first member of COSEFIN countries to join the CCRIF. This insurance will allow us to strengthen financial resilience to natural disasters and continue our efforts to reduce poverty and respond to climate change challenges as part of our national human development plan,” said Ivan Acosta, Minister of Finance of Nicaragua.
According to the CCR, nine countries in Central America and the Caribbean have experienced at least one disaster with an economic impact of more than 50 percent of their annual gross domestic product (GDP) since 1980.
The impact of Haiti’s earthquake was estimated at 120 percent of GDP, while tropical cyclone Agatha, in Guatemala, had devastating consequences and poverty rates increased by 5.5 percent.
Milo Pearson, chairman of CCRIF SPC, added: “We foresee a range of benefits to both regions emanating from this partnership, including the creation of a strategic mechanism in which Caribbean and COSEFIN countries can share best practices in disaster risk management and learn lessons from each other in advancing collaborative approaches to reducing vulnerabilities to hazards, alleviating poverty, enhancing debt and financial sustainability and creating a framework for the sustainable prosperity of the countries of both regions.
Jorge Familiar, World Bank vice president for Latin America and the Caribbean, said: “This a real example of a regional public good where collective action has clear financial benefits and can help countries tackle the adverse impacts of climate change. We look forward to deepening our engagement with COSEFIN, CARICOM and CCRIF as part of this ambitious regional initiative.”
