The role of insurance and zoning was discussed at a video conference we organized shortly after the 2004 Indian Ocean Tsunami. I wrote up some of the insights that were shared in my Choices column shortly thereafter. It’s good to see that knowledge informing the thinking of the Deputy Minister of National Policies and Economic Affairs: There was a need to introduce disincentives to prevent construction of buildings in places that are disaster prone, he said. Providing more people disaster insurance was also important, De Silva said. “We need to not only prepare for post-disaster insurance but prevent probability of people being subject to disaster.
LIRNEasia has been working on agriculture since 2006. Most recently, in the context of the Inclusive Information Society project that is being wrapped up, I was talking about GAP compliance with an agri-producer connected to global supply chains standing in a paddy field in Kandy on which he was growing bitter gourd for export to Europe, where among other things, he described the various authorizations he had to obtain because he was cultivating on land designated as being for rice. I recalled a conversation with Helani Galpaya several years ago upon her return from a field visit connected to our agriculture research. She said, we’re looking to solve information and knowledge problems, but the biggest barriers the farmers face is with regard to land. The 2018 Budget Speech proposes to relax the constraints that have been artificially imposed on what farmers can do with their land.
Improving the quality of policy proposals in the Budget Daily FT Opinion by Rohan Samarajiva I have been immersed in discussions in various media platforms about the 2018 Sri Lanka Budget. A budget speech seeks to communicate the direction of government policy to other economic actors. While it is a coherent and forward-looking document overall, the 2018 Budget does contain some problematic proposals that will have to be walked back or quietly buried. In this op-ed published in the Financial Times, I discussed a solution: Every Budget Speech includes complex policy measures. Given the traditions associated with the Budget Speech, it is not possible to conduct public consultations on each of the measures beforehand.
We have been thinking about insurance in the context of disasters ever since the 2004 Indian Ocean tsunami. Recently, we discussed insurance as part of the work we did for ESCAP on resilient ICT infrastructure. There, we came up against the problem of concentrated damage and difficulties of spreading risks discussed in relation to flood insurance in the Economist: Another obstacle is that flooding is very heavily concentrated and owners of high-risk properties are far more likely to seek insurance, making it difficult to spread risks. But other countries show how private insurance markets can play a bigger role. In Britain private insurers include flood coverage as part of standard policies, so risks are distributed across a wider pool of policyholders.
Our work on online freelancing also served as a probe on the emerging platform economy. Contrary to many concerns in the developed market economies, we found that almost all those participating in online freelancing were staying with their parents and doing the work part time. Concerns with variable income, uncertainty and difficulty in establishing credit were present, but in attenuated form. Which got us thinking about insurance as a mechanism to address those problems. Of course, health is one of the biggest uncertainties.
Much of what we work on involves information in markets. Transaction costs, information asymmetries feature large in our work. We hope to address insurance in our future work. In all these areas, Kenneth Arrow’s influence is immense. We mourn his passing.
From as long ago as 2005, we at LIRNEasia have been talking about insurance as a critical element in disaster risk reduction. And we have been pushing this idea at ESCAP, among other places. But somehow, we did not see it gaining traction. But finally, it seems to be: For a farmer in Zimbabwe, adopting this model will entail accessing strong climate data so she knows when best to plant and harvest. By purchasing parametric insurance – that is, insurance that pays out not on proof of loss but when a defined event is above a pre-determined and measurable trigger – she will receive a pay out if rainfall is under a certain level by a certain date.
We have been kicking around the idea of giving insurance a greater role in disaster risk reduction and response since 2005. Just a few months back I raised the issue at a workshop at UN ESCAP. In an interview with a Sinhala newspaper last week, I said it was a pity we were not anchoring compensation for flood damage on insurance principles and just giving out money. But here is good news. Too often, we criticize governments for sins of omission and commission.
I was invited to speak at the opening session of the ESCAP training workshop organized by the ICT and DRR Division, March 8-9, 2016. This was to introduce the report we had prepared for ESCAP on Building e-resilience, which is about to be released. The slides I used in my presentation are here. Because there was enough time (unusually), I went into some depth on one recommendation per inter-governmental organizations; governments and telecom service operators. Insurance appeared under two headings and took much of the time devoted to discussion.
It’s always nice when someone whose work has been used in LIRNEasia wins a big award. Robert Shiller greatly influenced our thinking on risk-reduction in the aftermath of the 2004 Indian Ocean tsunami. It’s true that he did not get the 2013 Nobel for that work, but still we are happy that an economist who always found the time to engage with contemporary economic policy issues has been so recognized. Report.
Our agri value chain work starts from the agriculture side and hopes to end up with solutions that include ICTs is some form. This is not that easy. This fascinating article about how venture capital is focusing on ICT applications gives some excellent ideas. His firm has invested in RelayRides and other start-ups that stretch the definition of clean tech investing. They include the Climate Corporation, for extreme weather insurance; Clean Power Finance, which runs an online marketplace for financing residential solar panels; and Transphorm, which makes tools that reduce power loss when electricity is converted in data centers or industrial motors.
Ten preliminary lessons of the 28th March 2005 Sumatra great earthquake (Photo Source) LIRNEasia, together with Vanguard Foundation, intends to systematically analyze the Sri Lankan media response to the great earthquake of the 28th of March. However, it appears useful to draw some preliminary lessons from this tragedy which has cost over 1,000 lives, including the people of Nias and other islands and those in Sri Lanka and elsewhere who died as a result of the warnings. The conclusions are preliminary; comments are welcome. # Earthquake hazard detection is easy; tsunami hazard detection is not. One cannot simply infer the existence of a destructive tsunami from an earthquake.
Rohan: Vanguard Foundation was recently created which has a center for disaster management. The work I have done at TRC on disaster management will be leveraged in the current context, and we will prepare a document. Pete Anderson is disaster communication expert who will be brought in to design a concept paper to set up parameters of a disaster management system. We are moving very fast on this. Sequence: Disaster happens, analysed, and transmitted in a secure communication mechanism to the media.