Leveraging Development Finance for Greater Action on Climate and Disaster Displacement

In 2023, 26.4 million disaster displacements were recorded in 148 countries around the world, with climate change expected to increase the scale, duration and severity of the phenomenon. Asia and the Pacific is by far the region most affected and many affected countries struggle to respond to the needs of their internally displaced population (IDPs) and often face competing priorities, including low levels of socioeconomic development or other drivers of instability.

Multilateral organizations are increasingly acknowledging the need to support affected governments with solutions. The scale of disaster displacement necessitates significant financial resources not only for immediate relief but also for long-term recovery and socioeconomic development of vulnerable, and often some of the poorest communities. Efforts to avoid displacement, through investments in risk reduction and resilience, are also needed. In 2022, the United Nations Secretary General’s Action Agenda on Internal Displacement called for International Financial Institutions (IFIs), bilateral donors and regional multilateral development banks (MDBs) to put in place measures to address internal displacement proactively and systematically in development financing.

MDBs can and have been instrumental in addressing the root causes of displacement, supporting affected communities and investing in longer-term solutions. Their diverse funding mechanisms can provide not only immediate funding for emergency response and recovery in the aftermath of a disaster, but also play a critical role in the reconstruction of more resilient homes and infrastructure, reducing the risk of future displacement. Investments in climate change mitigation and adaptation, disaster risk reduction, urban development, healthcare, education and livelihoods are pivotal for long-term resilience of communities to climate change and disasters, delaying or preventing their displacement by providing them with other options to cope or adapt.

MDBs’ interventions must be grounded in context-specific policies, strategies and plans, and government-owned priorities informed by quality evidence and by the active participation of affected communities. In addition to responding to governments’ demand for finance, MDBs also have a role to play in supporting and encouraging better national data systems and displacement-inclusive policies, and in raising awareness and building local capacities on the need to include displacement in development planning in affected countries. Through their relationships with governments, they can be influential in guiding them towards the most inclusive, comprehensive and efficient approaches to address displacement as a development issue.

This event will provide an overview of the ways through which MDBs can address the root causes of displacement in a context of climate change and disasters and support lasting solutions. It will highlight concrete examples of locally led interventions from across the region and invite representatives from affected countries to share their perspectives on how to harness development financing for solutions to displacement.