OREANDA-NEWS. Bolivia will improve its administrative and financial capacity to manage the risks of disasters with a loan of \$142.5 million approved by the Inter-American Development Bank (IDB).

Bolivia is one of the countries most vulnerable to natural disasters in the Andean region. In 2013 and 2014, floods affected more than 400,000 people and caused damages estimated at 1.3 percent of Gross Domestic Product. During the period 1970-2012 the country suffered more than 4,000 disasters that left 2,357 dead and affected more than 2 million people.

The economic losses for the more vulnerable people was not the only impact, however. The government was forced to redirect public funds to deal with the emergencies. This increases the gap in access to infrastructure between people with low and high resources, limits access to basic services, creates bottlenecks in the markets and increases the costs of transactions.

The intense changes in the use of land, especially the increases linked to accelerated urban growth, the development of infrastructure in risk areas and the environmental degradation of catchment basins are contributing to a growing exposure and vulnerability of the poorest people, who often live in informal settlements located in areas exposed to natural events such as landslides and floods.

This project will enable the creation of a national system for managing the risks of natural disasters in which prevention, based on an adequate analysis of the risks, becomes the central element of public policy. The goal is to create an institutional structure with clearly defined responsibilities for the different levels of government and ministries, with established financial resources, for the prevention and management of emergencies, through the approval of the regulations for Law 602 for Risk Management, and other norms and planning procedures.

This is the first operation of a program for pragmatic credits based on policies. These loans provide resources to governments to finance priority programs, and the funds are disbursed after goals agreed by the IDB and the borrowing countries are met.

The loan is made up of \$114 million from Common Capital, with a grace period of six years, and \$28.5 million from the Special Operations Fund with a grace period of 40 years.