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As the flood situation gradually turns into normal, public as well as politicians seems to have forgotten about the importance in disaster mitigation. Focus is on providing relief, which is understandable. However, the existence of a long term plan is must, in order to reduce the human and physical damage caused by disasters.

Accordingly the annual loss occurred due to disasters is Rs. 50billion. The Fiscal Disaster Risk Assessment and Risk Financing Options for Sri Lanka 2016, a publication by the World Bank, noted that on average, over the long term, in Sri Lanka’s housing/roads/relief sector-specific losses per year from natural disasters are estimated at Rs. 50 billion. Analysis was completed on historical (direct and indirect) losses arising from the physical and property damages of past disasters on the costs of relief assistance and housing and road reconstruction. This is a subset of full economic loss and is hereafter described as “housing/roads/relief” sector specific losses and this analysis specifically excludes the impact of the tsunami.truth

Despite this massive loss, the government’s effort to curtail disasters in long term remains a question. According to the Budget Estimates for 2017, capital expenditure allocated for the Ministry of Disaster Management was cut by approximately 29% in 2017 and will further cut down in 2016. In 2016, Rs 3.94 billion was allocated as capital expenditure for the Ministry of Disaster Management and it was cut down to Rs 2.8 million in 2017.

Estimates further indicate that capital expenditure is expected to be further reduced to Rs. 2.5 billion in 2018 and Rs. 1.5 billion in 2019. Total expenditure for the Ministry of Disaster Management in 2017 is estimated as Rs. 4.6 billion which amounts to only 0.1% of total government expenditure.

On the other hand, capital expenditure allocated for the Ministry of Disaster Management was under-utilized. A quarterly report submitted to the Cabinet by the Finance Ministry about utilization of expenditure allocated to the respective ministries shows that only 22% of the capital expenditure allocations for the first quarter 2017 were utilized. Accordingly, the target for the first quarter for the Ministry of Disaster Management in terms of capital expenditure was Rs. 945 million out of which only Rs. 211 million was utilized. In terms of recurrent expenditure, 54% of the allocation for the first quarter of 2017 was utilized by the Ministry of Disaster Management.

Ministry clearly indicate the lethargic approach and as a result of which reasons for disasters would continue to exist. It can be seen that major focus of the Ministry is on handling post-disaster situations, rather than reducing the risk of recurring disasters. Budgetary estimates show that 46% of the expenditure of the Ministry was allocated to provide disaster relief while only 35% of expenditure is allocated for disaster mitigation.
It is also evident that capital expenditure for disaster mitigation projects has also been reduced. In 2016, Rs. 770 million was allocated for the cause and it was cut down to Rs. 750 million in 2017. Interestingly, Budget 2017 had cut down allocations for the flood mitigation programme as well. As per estimates, a budget of Rs. 100 million was allocated for a flood mitigation programme in 2016 and it was reduced to Rs. 80 million in 2017. Along with, money allocated for landslide damage mitigation programmes was reduced to Rs. 205 million in 2017 from Rs. 230 million in 2016. Capital expenditure allocated for the Department of Meteorology was reduced from Rs. 63 million in 2016 to Rs. 43 million in 2017.

Challenges

World Bank noted,the biggest short-term challenges facing the GoSL are twofold: (a) the lack of a centralized damage-and-loss data collection system able to report information related to the damage and losses borne by different sectors, and (b) the lack of disaster risk assessment tools. Addressing both of these challenges would help quantify the underlying natural hazards facing Sri Lanka and allow the preliminary calculation of their likely financial impacts on the state. Once these activities are undertaken, they would inform the development of a national disaster risk financing strategy.

The subsequent implementation of a national disaster risk financing strategy would also require significant institutional capacity building. Disaster risk financing is one component of a comprehensive fiscal risk management strategy, which requires specific financial and actuarial expertise. Major capacity building related to disaster risk assessment and management of natural disasters would be required to develop and use financial tools to guide the GoSL in its national disaster risk financing strategy.

Under the 2013 National Policy on Disaster Management, the MDM is the entity responsible for immediate post disaster spending, including immediately needed food supplies, water and sanitation, medical assistance, counseling assistance, shelter, clothing, and other immediate needs. The MDMalso funds the overheads of emergency operation centers established in the Disaster Management Centre’s district and divisional secretary offices.
As part of this mandate, the MDM allocates post disaster funds at the district level, following impact assessments and requests from the district secretaries. For emergency disaster relief and short-term,

small-scale reconstruction, the MDM issues funds to the district secretaries.8 It also provides guidance on the rates applicable to specific expenditure types (table 1.1).

Large-scale reconstruction

is beyond the remit of the NCDM and the MDM, falling instead to individual line ministries at the federal level. The budget process anticipates that line ministries account for large-scale post disaster reconstruction costs in their annual budget estimates.
If disaster-related expenditure demands exceed provisions in the general budget formulation, the Treasury has recourse to a Miscellaneous Fund, which has been used in the past for disaster spending. The NBD director general authorizes transfers from the Miscellaneous Fund immediately upon request of the MDM.

“Between 2006 and 2013, the general budget allocated around SL Rs 35 billion for disaster-related Projects. This amount varied significantly year-on-year, reaching a high of SL Rs 9 billion in 2012 (after the severe flooding of 2011) and a low of SL Rs 200 million in 2006. The portion of spending attributable to external assistance executed on budget also varied significantly.

Provinces follow a distinct and separate budgeting process that does not fully account for disaster-related expenditure needs. The provincial governments prepare their budgets independently, but their budget formulation does not explicitly take disaster-related expenditure into account. Some small provision is made currently at the provincial level, through allocations to divisional secretaries through the Department of Social Services (DSS) for minor expenses on disasters.

For example, the Western Provincial Council issued expenditures to its 40 divisional secretaries, through the DSS. In the absence of a National Disaster Fund, the national budget explicitly accounts for provision of external assistance to the implementing line ministries for disaster-related expenditure.

Total expenditure on donor-linked programs carried out by various ministries (as implementing agencies) during 2006–13 exceeded SL Rs 17 billion. Multiple factors drive the large variation in spending year-on-year; for example, severe flooding in 2011 led to a spike in externally funded spending in 2012,” report added.

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