Innovative funding for catastrophes builds resilience

ESTIMATES of the collective damage caused by Hurricanes Harvey, Irma and Maria are staggering. Together, Harvey and Irma could cost the US government US$200 billion. Maria's costs could add up to US$45-$95 billion for Puerto Rico, the US territory that has been in recession for over a decade and filed for a form of municipal bankruptcy five months ago. The tally does not include estimates of the devastation to other Caribbean countries and territories.

Governments have to be first responders to natural disasters. Since local officials are usually among the affected and have limited access to resources, central governments bear most of the immediate costs. These include manpower and logistics for rescue and retrieval operations. Transportation, communication and energy infrastructure need to be restored. Survivors must be brought to temporary shelters and provided food, clothing and other necessities. Foreign aid and private donations typically supplement public funds.

A catastrophic storm can make obsolete even the most responsible fiscal planning. Immediate relief in Puerto Rico has shown some shortcomings, particularly when compared to Texas and Florida. The federal government must improve its response before Puerto Ricans lose hope and large groups begin to migrate to the US mainland, leaving the island without the human capital to rebuild devastated communities.