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U.N. report proposes $10 bln world disaster fund

1/07/2008 - 20:48

By Patrick Worsnip

UNITED NATIONS (Reuters) - The United Nations proposed on Tuesday a $10 billion global fund to help poor countries cope with natural disasters the world body said were occurring with ever more frequency and ferocity.

A U.N. 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 U.N. 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, U.N. 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.

MARKET FORCES

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 U.N. 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 U.S. 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."

The report proposed:

-- improved access for developing countries to International Monetary Fund resources, especially to help them cope with external economic shocks, and without some of the conditions imposed up until now;

-- a more effective overseas aid mechanism, aimed not only at meeting the existing donor country target of 0.7 percent of gross national income but also at supporting recipient countries' own development priorities;

-- a global "new deal," a reference to recovery programs initiated by U.S. President Franklin Roosevelt in the 1930s after the Great Depression; the report made no specific new suggestions but said action was needed to curb market abuses and better share the burden of financial shocks.

(Editing by Eric Walsh)


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