During the last decade more than one billion people were affected by natural disasters and assets worth of US$730 billion were lost. The 2004 UNDP report “Reducing Disaster Risk: A Challenge for Development” notes that the losses from natural hazards are increasing, and have a disproportionate impact on less developed countries.

Earthquakes are one of the most disastrous of natural hazards, coming without warning and affecting nations and peoples around the entire Pacific Rim, and from North Africa through the Balkans and Middle East, India and Indonesia, to Papua New Guinea and New Zealand. Countries as diverse as the Philippines, Mexico, India, Peru and Turkey, to name just a few, have suffered multiple earthquake disasters in recent decades. Earthquake with fatalities in the tens of thousands have the potential to occur in Manila, Istanbul, Teheran, Tokyo and other major cities in these regions.

The World Bank has been actively involved in post- disaster recovery and reconstruction projects in these regions and loaned US$40 billion for reconstruction and mitigation between 1980 and 2003. In addition to lending directly for recovery and reconstruction, the Bank has been reassigning significant loan amounts committed to regular development projects (as affected countries often do) for the timely funding of urgent reconstruction needs.