Illustrative image (Source: VNA) Hanoi (VNA) – Building financial solutions to natural disaster risks is a must in order to lessen the burden on the State budget, said Vice Minister of Finance Nguyen Huu Chi.
Chi told participants at a seminar co-organised by the Ministry of Finance and the World Bank (WB) in Hanoi on November 15 that Vietnam suffers from various natural disasters which cause losses of up to 40 trillion VND (around 1.8 billion USD) each year.
Vietnam ranks 22nd in the world in the number of deaths left by calamities, he added.
Sebastian Eckardt, Lead Economist for the World Bank in Vietnam, shared Chi’s view, saying that an estimated 60 percent of the country’s areas and 71 percent of its population endure storm and flood risks.
Total damage due to storms and floods is equal to 0.8 percent of Vietnam’s annual gross domestic product (GDP), pushing it to third place in terms of losses among the ASEAN member countries, just behind Myanmar and the Philippines, he noted.
Since 2013, with the support of the Swiss Government, WB has assisted Vietnam in improving financial solutions and natural disaster insurance by exclusively building a calamity risk model for the country.
The WB economist said this model will help the Vietnamese Government and organisations to evaluate the possibility of occurrence and losses caused by natural disasters and work out financial plans for the possible consequences.
According to the WB, Vietnam now has different tools to ensure financial resources for coping with calamities and overcoming their aftermaths.
However, WB experts suggested Vietnam build a financial strategy to cover all losses left by natural disasters and it should be part of the country’s natural disaster and climate change management master plan./.
