Disasters associated with the impact ofnatural hazards have had adverse social and fiscal effectson Panama over time, and the Government of Panama (GoP) istherefore committed to strengthening the financialmanagement of disaster risks. Actions taken by the GoP infinancial management of disaster risk are consistent withlaw 34 of June 5, 2008, the law on social fiscalresponsibility. This law aims to establish norms,principles, and methodologies for consolidating fiscaldiscipline in national financial management of the publicsector, a necessary condition for continuous and sustainableeconomic growth. The strategic framework was developed withthe support of regional and international entities. Thedocument incorporates a number of important lessons learnedfrom international experience: (i) include disaster risks aspart of an integrated framework of fiscal risk management;(ii) ensure that governments have access to immediate fundsfollowing a disaster; (iii) consider the creation of anational disaster fund; and (iv) reduce thegovernment's contingent liabilities against disastersassociated with the impact of natural hazards by insuringcritical public assets and promoting the private insurancemarket for catastrophic risks and agricultural insurance.The strategic framework has the following five strategicpillars: (i) identification, quantification, andunderstanding of fiscal risk due to disasters; (ii)incorporation of disaster risk analysis in the planning ofpublic investment; (iii) formulation of components fordeveloping and implementing risk retention and transferinstruments; (iv) development of the domestic insurancemarket; and (v) strengthening of the state directorate ofinvestment, concessions, and risks (DICRE) so it can fulfillits role in designing and implementing financial protection strategies.
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