By Alcira Kreimer, World Bank
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Extra resources for Managing disaster risk in Mexico: Market Incentives for Mitigation Investment, Part 611
These losses include the forgone production of goods and services as a result of interruptions in utility services, transport, labor supply, suppliers, or markets. Indirect losses also include the cost of providing interim services while the original operating capacity is being restored. 2). While direct damage is an important measure of impact, it does not capture the full impact of the event on the economy. Secondary Economic Effects Secondary effects include impacts on such macroeconomic variables as economic growth, the balance of payments, public spending, and inflation.
These offices provide requested support to state and municipal governments. Each state and municipal council also has its own technical unit for civil defense. The autonomy of these subnational councils sometimes conflicts with the effective integration and coordination of national efforts by SINAPROC. SINAPROC's Program for Civil Protection 1995-2000 is set up as a national regulatory and operational instrument. The program defines the prevention and response actions required to deal with natural disasters.
It describes the role of insurance and reinsurance and explains why insurance coverage in Mexico is low. It proposes a series of steps that could help Mexico use private insur- Page 7 ance companies to improve the public sector's ability to deal with risk. Chapter 5 examines how Mexico might be able to use new financial instruments, such as catastrophe bonds and options to transfer or finance risk. It also looks at the structure of FONDEN, making recommendations on ways the fund could be reorganized.