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Last Updated: Monday, 26 February 2007, 07:51 GMT
Caribbean hurricane fund launched
Damage in Georgetown, Grand Cayman after Hurricane Ivan
Countries will have to pay an annual premium to access the insurance
Caribbean nations hit by future hurricanes will be able to draw on emergency funding immediately under a new initiative by the World Bank.

The development body is launching an insurance fund designed to enable countries to finance key services in the aftermath of a natural disaster.

Countries set to benefit include the Bahamas, Barbados, Montserrat, Trinidad and Tobago and Jamaica.

Hurricanes are estimated to have cost the Caribbean up to $16bn since 1979.

Reducing risk

Hurricane Ivan, which struck the region in 2004, cost an estimated $800m in losses and raised questions about the speed of the response from the international community.

In this and other similar disasters, it has taken months for donor countries to raise and deliver emergency funding.

One of the gaps in the current approach to natural disaster is after a hurricane or an earthquake hits
Caroline Anstey, World Bank

The new initiative, set to be unveiled on Monday, would provide a standing fund of up to $50m which countries could draw upon in the event of future incidents.

Countries would have to pay annual premiums into the fund, as well as a one-off entry fee, in order to access any money.

The level of individuals premiums will depend on a country's risk profile and could range from about $200,000 to $4m, the Bank said.

Funding salaries

The fund's structure is designed to reduce the risk facing individual countries. World Bank donor nations, such as the US, UK and France, are not expected to provide any direct funding themselves.

"One of the gaps in the current approach to natural disaster is after a hurricane or an earthquake hits, a government is dependent on trying to get support from donors," said Caroline Anstey, the World Bank's director for the Caribbean region.

"That period is an extremely important one, to allow the governments to carry on working to pay salaries."

According to its own forecasts, the World Bank believes hurricanes will hit the region every two and a half years.

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