A new partnership strategy using both infrastructure and natural resources for climate change adaptation

Friday, September 30, 2011

Climate change may be a hot topic for discussion all over the world, but in Belize its affects are already all too real. The country is highly vulnerable to the impacts of climate change, and its unique natural resources, including the largest barrier reef in the Americas, have been threatened in recent years by a spate of natural disasters.

The World Bank earlier this month approved a new country partnership strategy with Belize for the next four years, aimed at improving resilience to climate change and natural disasters, as well as supporting efforts to adopt a sustainable economic model based on natural resources.

BNamericas spoke with the bank's country officer in Belize, Michael Corlett, about the new partnership strategy and the challenge of adapting to the effects of climate change.

BNamericas: Can you give us a general overview of the World Bank's country strategy with Belize?

Corlett: The bank strategy has been developed with the government of Belize, which has its own development strategies. What we try to do is to figure out the best way to support their strategy.

As far as infrastructure goes, Belize is a country with very low population density, so it has a lot of infrastructure needs that have been exacerbated by their vulnerability to disasters. They have to keep building and rebuilding roads and bridges.

The government has a large capital investment program that's being supported by different agencies, including the Caribbean development bank, IDB and the EU. What we've done is try to find a strategic entry point where we can focus on reducing vulnerability of infrastructure and natural resources.

BNamericas: The strategy is obviously far-reaching. Where will you start?

Corlett: We will begin by undertaking a vulnerability map, looking at the coastline and identifying the areas that are most vulnerable to disaster risk and the impacts of climate change.

After we do that vulnerability assessment we'll work to identify the key areas where they need help. At this point we don't have any infrastructure projects planned, but based on our assessment it may lead to something such as a particular coastal highway that needs to be raised, as our assessments show there could be flooding on this part of the highway, or their needs to be improved drainage.

Our work will really be complementing what other donors are doing but with a special focus on increasing the resilience of their infrastructure to disasters and climate risks.

BNamericas: When you talk about reducing vulnerability, what kind of strategies does this involve? Will you look at infrastructure solutions for flood control, for example?

Corlett: Infrastructure solutions are just one option. You can also enhance the natural resources that are available. There might be a particular area that's vulnerable to flooding, but there are opportunities to use the existing ecosystem to provide protection, instead of building new infrastructure.

Belize has a barrier reef and it's actually the country's biggest defense against disasters. It serves as a breakwater. You can enhance that by for instance replanting mangroves in areas that have been cut down for development.

We will look at both investing in natural resources and infrastructure, trying to find the best and most cost-effective solutions.

BNamericas: Once the evaluation of the risk is complete, how soon would you expect to see concrete projects coming out?

Corlett: I would say that we would probably spend the first year of the strategy, maybe nine months, undertaking these assessments. In a parallel fashion we will identify areas that we know are of interest and are high priority areas in terms of vulnerability. So you're looking at a time frame of 18 months to two years for actual works to get underway.

BNamericas: The World Bank is resuming its partnership with Belize after a hiatus of several years. Can you talk us through what happened there?

Corlett: Back in the early 2000s the country was experiencing severe fiscal sustainability problems. They were running deficits of 10-12% of GDP. At the time, the government had an inadequate approach to dealing with the problem, so we suspended our lending while maintaining a relationship around climate change. We helped establish the Caribbean Climate Change Center in Belize.

The previous administration was running uncontrollable fiscal deficits and this culminated in a market-friendly debt restructuring in 2007.

BNamericas: How has the situation improved since then?

Corlett: The new administration inherited a pretty difficult fiscal situation and has continued to hold a tight fiscal stance. Its public sector investment program is being largely financed by international agencies, which tend to offer cheaper financing than the capital markets, especially for a country like Belize.

The main difference that led us to start working together again was the commitment on the part of the government to deal with the fiscal challenges. When we suspended our program we didn't feel that there was that same commitment.

BNamericas: Why is the bank's strategy particularly focused on climate change and disaster risk?

Corlett: The government has shown strong ownership of this strategy and has asked the bank to focus on these critical areas, complementing other donors' activity.

The World Bank has global expertise on disaster risk and climate change, which allows us to offer knowledge, experience and financing. We are also able to help the country leverage its financing with grant resources, which is a key point for a country facing fiscal challenges.

The world is paying increased attention to climate change adaptation and a lot of climate funds have been created over the last few years and we expect many more to be created. The World Bank is in position of knowing how to access these funds, so what we're hoping to do is to substantially leverage the money borrowed from the World Bank with grant funding, which is essentially free money. This is a key aspect of our strategy.  

BNamericas: Would you say climate change is one of Belize's main challenges right now?

Corlett: Yes, definitely. What the Caribbean is seeing is more frequent and more intense natural disasters. So when you say climate change, it's related to disasters.

It's a huge issue facing the country. Certainly some of the infrastructure, especially in coastal zones but also throughout the country, is being impacted by climate change.

Three years ago they had major flooding throughout the whole country because of a tropical storm that wasn't deemed to be very powerful, but basically camped out over Belize for a week and caused extensive flood damage.

This government has come into office with some pretty severe fiscal constraints, and the previous administration had to undertake a fiscal adjustment that has really affected the capital investment budget. In other words there is a lot of pent-up demand for infrastructure spending and a lot of needs to be filled.