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UN report proposes $10 bln world disaster fund

The United Nations proposed a $10 billion global fund to help poor countries cope with natural disasters occurring with ever more frequency and ferocity.

A UN report on factors creating world economic insecurity said the existing response to floods and earthquakes of emergency appeals and voluntary contributions should be boosted with a permanent facility, possibly under UN auspices.

In a trend some have linked with global warming, more than four times as many disasters occurred annually between 2000 and 2006 than during the 1970s, the report said. The damage costs were seven times higher at an average of $83 billion per year.

Several schemes for disaster funds had been launched or proposed in recent years but these were too small to be effective, said the report, which said the money needed to be handed out quickly and automatically.

“A global disaster mechanism ... needs to be established,” that would not just tackle immediate relief needs but also invest in longer-term disaster reduction, said an overview to the report by Sha Zukang, UN under-secretary-general for economic and social affairs.

“A $10 billion facility would seem to represent the kind of target that the international community should be aiming for if real progress in reducing this threat is to be achieved.”

The fund should reimburse disaster-hit countries for one quarter of the damage caused, the report said. To provide the money, countries would be assessed according to their means, and poor countries would not have to contribute, it said.

The 202-page survey, entitled “Overcoming Economic Insecurity,” also looked at threats to poor countries from world financial turmoil, which it blamed on policies by rich countries of letting market forces take their course.

It called for greater international action and regulation to combat what UN assistant secretary-general for economic development Jomo Kwame Sundaram told a news conference was a “perfect storm” of spiraling food and fuel prices and a credit crunch stemming from a US mortgage crisis.

Calling the self-regulating market an “idee fixe,” or obsession, of the late 20th century, Sha's overview said, “The international financial architecture can no longer continue to be organized around the principle of laissez faire.” (Reuters)