Modeling the indirect and fiscal risks from natural disasters for informing options for enhancing resilience and building back better

This paper presents the CATSIM methodology, which combines estimates of the direct, monetary risk a country is exposed to with an evaluation of sovereign fiscal resilience. National hazard, exposure and resilience data is input into CATSIM, which is used to identify the likelihood of a disaster to overwhelm the government's ability to finance the recovery process. Expected public sector losses are calculated for events of varying return periods, and these losses are compared to the estimated available financial measures for recovery: a shortfall indicates a resources gap, leading to delayed reconstruction and recovery, and eventually shifting development trajectories and hampering long term economic growth.