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Indirect disaster effects cost the world nearly $2 trillion per year, Guterres says on International Day

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Most of the exorbitant costs of disaster are preventable with proper funding and planning —one of the main messages for this year’s International Day for Disaster Risk Reduction, themed Fund Resilience, Not Disasters, observed on Monday.

“Every dollar invested in resilience saves many more in avoided losses and protects the dignity of those most at risk. The choice is ours. We can continue to fund disaster response or we can invest in resilience,” said Amy Pope, chief of the International Organization for Migration (IOM).

In 2024 alone, nearly 46 million people were displaced by disasters, the highest number ever recorded, but disaster risk reduction efforts remain severely underfunded, according to the IOM. 

Preventable disaster costs

“As the climate crisis accelerates, disasters are multiplying and amplifying – devastating lives and livelihoods, erasing decades of development gains in an instant,” said UN Secretary-General António Guterres in his message to mark the Day. 

“The cost to the global economy is staggering: an estimated $2 trillion every year, when indirect costs are taken into account.”

Indirect costs include the wider social and ecosystem losses that come as a result of natural catastrophes. Earthquakes, floods, storms, droughts and heatwaves made up 95 per cent of direct costs in the past two decades, according to the report. 

“Wildfires in Europe and the Americas, and devastating earthquakes in Myanmar and Afghanistan prove that no country is immune, but the heaviest toll falls on communities already struggling with conflict, poverty, and hunger,” said Ms. Pope.

Different natural catastrophes affect different regions in the world. In South Sudan, annual floods can submerge houses, farmland and schools, forcing people to flee their homes and increasing food insecurity. 

As a disaster prevention measure, dykes have been constructed in South Sudan with the support of the IOM, protecting farmland and restoring livelihoods. 

Promoting disaster reduction 

The International Day for Disaster Risk Reduction was established in 1989 to foster a global culture of risk-awareness and celebrate how communities around the world are reducing their exposure to disasters. 

“The impact of disasters depends in large part on the choices we make, how strong our infrastructure is, how much we invest in prevention, and how well we protect the most vulnerable,” said Ms. Pope.

With planning and funding, the negative impacts of disasters can be reduced. Accordingly, this year’s Day call is for an increase in disaster risk funding and for the development of risk-adapted and resilient private investment. 

Mr. Guterres stressed that for every decision they make, the public and private sectors must take risk into account to minimise exposure and vulnerability to hazards. 

“On this Day, let’s commit to meet surging risk with a surge in funds, and build a safer and more equitable future for all,” he said. 

United Nations Revises 2026 Budget, Pairing Cost Reductions With Reforms

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UN Budget Cuts and Reform Proposals Sent to ACABQ for Review

The United Nations has submitted revised budget estimates to the Advisory Committee on Administrative and Budgetary Questions (ACABQ), proposing a 15.1 per cent reduction in resources and an 18.8 per cent cut in posts in the regular budget compared with 2025. The support account for peacekeeping operations, which underpins missions worldwide, would also see reductions in the 2025/26 period.

The ACABQ, a subsidiary body advising the General Assembly, will assess the proposals before forwarding its recommendations to the Fifth Committee, where all 193 Member States decide on administrative and budgetary matters.

Targeted Reductions

In a letter to Member States, Secretary-General António Guterres explained that the cuts followed an extensive review of mandate delivery and resource allocation. Stressing that reductions were “targeted, not across the board,” he said they had been carefully calibrated to maintain balance across the UN’s three pillars—peace and security, human rights, and sustainable development.

Programmes that directly support Member States—particularly least developed, landlocked, and small island developing States—along with Africa’s development advocacy, the Peacebuilding Fund, and the Resident Coordinator system, will be shielded from reductions. Regional economic commissions will see only modest adjustments, while the Regular Programme for Technical Cooperation will continue to expand to strengthen capacity-building for developing countries.

“Reductions of this magnitude will entail trade-offs,” Guterres wrote, noting possible impacts such as narrowed scope, longer timelines, or reduced frequency of outputs. Mitigation measures will include prioritising high-impact work, pooling expertise, and relying more on virtual platforms and automation.

Reform Measures Under the UN80 Initiative

The budget revision is closely tied to the UN80 Initiative, launched in March 2025 to strengthen the Organisation amid rising global political and financial uncertainty. Alongside the cuts, the revised estimates introduce the first set of proposals under Workstream 1, focused on management and operations.

Key measures include:

  • Establishing administrative hubs in New York and Bangkok.

  • Consolidating payroll into a single global team across New York, Entebbe, and Nairobi.

  • Relocating some functions from high-cost duty stations (New York and Geneva) to lower-cost locations.

  • Vacating two leased New York buildings by 2027, with projected annual savings from 2028.

Collectively, these reforms aim to cut duplication, enhance quality, and protect mandate delivery while improving efficiency.

Three Workstreams of Reform

The UN80 Initiative is structured around three workstreams:

  1. Efficiencies and management improvements – now reflected in the revised estimates, with further measures to come.

  2. Mandate Implementation Review – a report submitted in August is under review by a new Informal Ad Hoc Working Group, meeting on 16 September.

  3. System-wide realignments – proposals on structural and programmatic clusters will be presented later this week.

Together, the workstreams signal a major reorientation of UN operations, aimed at ensuring effectiveness, credibility, and sustainability.

Next Steps and Staff Engagement

The ACABQ will begin hearings this week before passing its recommendations to the Fifth Committee, with a final General Assembly decision expected by December. If approved, changes would be phased in starting 2026, with future budget cycles reflecting additional reforms from the UN80 workstreams.

In a separate letter to UN staff, Guterres acknowledged that the changes will affect daily work and professional life but pledged full support throughout the transition. “You will be fully engaged and supported throughout the process,” he assured, promising regular communication, consultation opportunities, and practical guidance.

Acknowledging the difficulty of the decisions, the Secretary-General emphasised accountability—beginning with him, but also extending to managers and staff. He urged that reforms be carried out with fairness, empathy, and professionalism, underscoring the shared responsibility of upholding UN values during the transition.

 

Real cost of disasters is 10 times higher than previously thought, says UN

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That’s according to a report released Tuesday by the UN’s disaster risk reduction agency, UNDRR.

While current estimates suggest the global economic impact of natural emergencies – such as earthquakes, landslides and floods – amounts to around $200 billion annually, this figure represents “only a fraction of the real costs,” said Jenty Kirsch-Wood, head of global risk analysis for UNDRR.

The true cost is closer to $2.3 trillion, she added, warning that the world has been “chronically underestimating and undermeasuring the impact of disasters” on sustainable development progress.

Catastrophic floods

A person born in 1990 has a 63 per cent chance of experiencing a once-in-a-century catastrophic flood in their lifetime. For a child born in 2025, that probability rises to 86 per cent.

“Those events are affecting us all,” said Ms. Kirsch-Wood.

The cost of extreme weather is not measured solely in destroyed infrastructure, but also in lost years of health, education and opportunity.

Unsustainable humanitarian response

Healthcare, education, and employment are increasingly disrupted by emergencies, leading to higher national debt and slower recovery – particularly in already vulnerable countries.

This has contributed to “an unsustainable and unsupportable humanitarian response,” Ms Kirsch-Wood added, as nations grapple with increasingly frequent and severe climate shocks.

UNDRR using data from EM-DAR, CRED/UCLouvain, 2025, Brussels, Belgium.

Losses have doubled

According to UNDRR, financial losses from disasters have doubled in the past two decades.

The agency’s new report outlines how the international community can collaborate to make sustainable investments that build resilience to future disasters and ease pressure on public finances.

Most of the damage caused by climate-related events is preventable, Ms. Kirsch-Wood stressed.

The challenge ahead, she said, is to “better align our financing systems” and “use public and private investment to make sure that we’re optimally reducing the burden on governments.”

Nearly 240 million people were internally displaced by disasters between 2014 and 2023.

China and the Philippines each reported over 40 million displaced persons, while India, Bangladesh and Pakistan saw numbers ranging from 10 to 30 million.

The steep costs associated with climate events – and the debt they generate – disproportionately affect developing countries and vulnerable populations.

UNDRR using CRED and UCLouvain, 2025.

Vulnerable hardest-hit

In 2023, North America recorded $69.57 billion in direct disaster-related losses – more than any other region – but this amounted to just 0.23 per cent of its Gross Domestic Product (GDP).

By contrast, Micronesia incurred only $4.3 billion in losses, but this represented a staggering 46.1 per cent of its GDP.

The UNDRR report “shows the eye-watering losses inflicted by disasters today, which hit vulnerable people the hardest… and it demonstrates that, on our current trajectory, costs will continue to mount as the climate crisis worsens,” said UN Secretary-General António Guterres.

“But it also illustrates that, by boosting and sustaining investment in disaster risk reduction and prevention, we can slow that trend and reap economic benefits – saving lives and livelihoods while driving growth and prosperity to help reach our Sustainable Development Goals.”

Private sector role

Proven tools – such as flood protection infrastructure and early warning systems – can help the worst-affected nations curb the rising costs of climate-related disasters.

Increased investment in risk reduction and resilience can reverse current trends, said the head of UNDRR, Special Representative Kamal Kishore, citing the example of protection from overflowing rivers. 

“When riverbank communities have access to scientific tools for land use planning, resources for building flood protection systems, and early warning systems, they not only reduce damages and losses from floods, but also create conditions for prosperity and sustainable growth in their communities,” he said.

The private sector, UNDRR emphasised, must also step up to “fill the protection gap that leaves many countries in a worsening spiral of repeated disasters.”

Self-monitoring diabetes reduces future costs by half: Study

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Self-monitoring of type 2 diabetes used in combination with an electronic feedback system results in considerable savings on health care costs especially in sparsely populated areas, a new study from the University of Eastern Finland shows.

Self-monitoring delivers considerable savings on the overall costs of type 2 diabetes care, as well as on patients’ travel costs. Glycated hemoglobin testing is an important part of managing diabetes, and also a considerable cost item.

By replacing half of the required follow-up visits with self-measurements and electronic feedback, the annual total costs of glycated hemoglobin monitoring were reduced by nearly 60 per cent, bringing the per-patient cost down from 280 EUR (300 USD) to 120 EUR (130 USD). With fewer follow-up visits required, the average annual travel costs of patients were reduced over 60 per cent, from 45 EUR (48 USD) to 17 EUR (18 USD) per patient. The study was published in the International Journal of Medical Informatics.

Carried out in the region of North Karelia in Finland, the study applies geographic information systems (GIS) -based geospatial analysis combined with patient registers. This was the first time the costs of type 2 diabetes follow-up were systematically calculated over a health care district in Finland. The study analysed 9,070 patients diagnosed with type 2 diabetes. Combined travel and time costs amount to 21 per cent of the total costs of glycated hemoglobin monitoring for patients with type 2 diabetes.

“The societal cost-efficiency of type 2 diabetes care could be improved in by taking into consideration not only the direct costs of glycated hemoglobin monitoring, but also the indirect costs, such as patients’ travel costs,” Researcher Aapeli Leminen from the University of Eastern Finland says.

The study used a georeferenced cost model to analyse health care accessibility and different costs associated with the follow-up of type 2 diabetes. Patients’ travel and time costs were analysed by looking at how well health care services could be reached on foot or by bike, or by using a private car, a bus, or a taxi. According to Leminen, the combination of patient registers and GIS opens up new opportunities for research within the health care sector.

“This cost model we’ve now tested in the eastern part of Finland can easily be used in other places as well to calculate the costs of different diseases, such as cancer and cardiovascular diseases.”