RISK MANAGEMENT (final project by Denisa Mockova; sources: World Bank material, flickr, google)
Risk management (RM) as a concept has been discussed widely within, but not
Effective Successful & Inclusive Risk-Management
exclusively, the international organizations and actors. Its basic definition, according to the World Bank is that it is a “process of confronting risks, preparing for them and coping with their
PRODUCING RESILIENCE • ability to mitigate losses from adverse shocks and to foster the economy ACHIEVING PROSPERITY • by improving benefits from pursuing opportunity
effects”. The natural disasters, economic
While these terms might sound vague, in
crises, uneven development, among
reality, the complexity of RM engages
others, have been posing significant
various stakeholders which cooperate in a
threat to people all around the world, as
matter which allows them to tackle the
well as the international system in
problems and to be successful in pursuing
general. RM is therefore absolutely
a common goal of healthy, prosperous
necessary and it has two main aims.
and opportunity-rich society.
WHY IS RISK MANAGEMENT SO ESSENTIAL ?
if RM does not engage properly, the circulation of shock - (lack of)
shocks affect people whether in developed or developing countries the most vulnerable are the poorest people, unfortunately additionally, these also lack the options for managing risk/shocks
response/even deeper poverty vulnerability - shock at even bigger scale, will be as a vicious circle, where there is no way out Sustainable Development goes hand in hand with Risk Management at all levels
WHAT DOES EFFECTIVE, SUCCESSFUL & INCLUSIVE RISKMANAGEMENT ACTUALLY ENTAIL? Thinking LONG-TERM, in advance: aim for rather prevention then for after-shock engagement. The policies which need to be introduced must be focused on making conditions which would not be a breeding ground for catastrophes. Even when the disaster strikes, with successful implementation of RM the country can lessen the damage and cope with consequences easier
PREPARATION : by thinking in advance, we refer to especially the preparation phase, when all the effective tools,knowledge,skills and other important things shall take place in order to encompasses three important and irreplaceable concepts a) acquiring knowledge - we look for quality of information and access to it b) obtaining protection - protection as essential component of security c) obtaining insurance - can be of a great value in stage of preparation COPING : after shocks hit (and they increasingly will), coping serve as response mechanism. Examples are emergency and relief responses as well as afterdisaster management of the ground
Cooperation & Engagement of : Households + Communities + Enterprise Sector + Financial Sector + State + International Community —> it is absolutely necessary that Risk-Management is being used on all of these levels, as each of them is very specific and requires different interactions in order to facilitate the final aims
think about risk chain : the interaction of various factors is affecting the final conditions; we talk about shocks versus: external environment internal conditions risk management outcomes setting and building right, realistic strategies and foundations: these include everything from basic policies, through quality of information, setting the right incentives, via overcoming behavioral obstacles and ending with ensuring effective and sufficient financing
LESSONS LEARNED Successful inclusive & effective Risk Management requires involvement of all the actors and stakeholders. If we are about to achieve a win-win situation, meaning managing the risks while at the same time enhancing the development, we must take into consideration all those factors mentioned above. They should flow harmonically among themselves and make a beautiful whole as a part of risk management strategy for all the generations.