The purpose of this report and the exercise in the workshop is to discuss the CatSim
(Catastrophe Simulation) approach to incorporate disaster risk management (DRM) into
fiscal and development planning processes, as well as explore the feasibility of using
disaster risk management options for reducing risk. It should support the ongoing CPGU
(Cellule de prevention et gestion des urgencies) led study on “Mainstreaming Disaster
Risk Management and Climate Change in Economic Development,” which aims to
• quantify and model natural hazard risk for Madagascar in an objective fashion that
will represent a scientific and numerical basis to inform sector-specific risk
management practices
• produce solid and validated future impact scenarios that will enable stakeholders to
make informed decisions on adaptive measures.
• build national capacity and coordination between the adaptation and hazard risk
management institutions;
• produce a risk model for Madagascar that will inform the decisions and development
of more effective risk financing options.
The report and associated modeling approach will support the overall study primarily
through the assessment of the financial impacts of natural hazards on the Malagasy
economy and the development of scenarios that will inform the financial strategies of the
government, to manage their exposure to climate-related risk. Particular focus will be on
the impacts of tropical cyclones, which tend to lead to widespread losses in the
agricultural sector, and can result in severe damages to built infrastructure. The financial
impacts of cyclones on the national economy is systematically assessed through a
transparent modeling approach that gives the Malagasy stakeholders guidelines and a tool
to better manage the financial risk arising from natural disasters now and in the future.
The two-day workshop that this document supports was intended to put the concepts into
practice by allowing participants to work through a practical example of policy making in
a risk based manner. The CatSim model aids in the analysis of public disaster risk
management options. Furthermore, detailed descriptions of each step will be given in the
appendices within the report.
Incorporating disaster risk management into fiscal and development planning requires
consideration of three main issues: (i) risk reduction (preventing and loss mitigation); (ii)
risk transfer; and (iii) financing the recovery. The emphasis here is on risk transfer and
financing the recovery process, that is, the economic and fiscal considerations. To
incorporate risk reduction into development planning would require extensive
information on the human losses, which is not emphasized here. The development of a
viable strategy requires policy-makers to consider their country’s risk profile,
development plans, as well as the government’s fiscal, budget and debt situation.