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Today, the lingering ramifications of the pandemic, surging debt, stalled poverty reduction, and violent conflict are all threatening growth prospects. Many countries face tepid growth, partly due to underinvestment in people, infrastructure and productivity. But as resources are scarce, countries must ensure that investments in building resilience also contribute to their broader growth objectives and strengthen their development strategies and economic policies.

Disaster preparedness and resilience measures were traditionally seen to serve one purpose: reducing losses when shocks occur. While valid, this narrow perspective makes resilience measures politically challenging - especially when large up-front investments are needed to protect against low-probability events, so that benefits seem uncertain and distant. The time that passes before a major hazard, like an earthquake or cyclone, long exceeds average political mandates and attention spans, when countries have other urgent daily needs. And even when the right intervention prevents a disaster from happening, this success is hardly visible and . That's why it is critical to highlight the potential immediate economic gains resulting from resilience investments, such as flood protection, drainage systems, early warning systems, or shock-responsive social protection.

That's why, exactly 10 years ago, we introduced the , a report funded by , to better capture the development contributions of disaster and climate resilience. It highlights that investments in disaster prevention, preparedness, and resilience yield tangible economic and social returns - or dividends - regardless of whether or when a shock occurs.

Dividend 1: Saving lives and avoiding losses

Let's state the obvious first: By preparing for shocks and disasters, we can mitigate their impacts when they happen. For instance, investments in prevented what could have been large scale flooding in 2024. In , countless lives are saved each year by high seismic standards throughout its infrastructure, and multi-hazard early warning systems.

Resilience investments also mitigate the impacts of frequent smaller shocks- such as seasonal flooding, heatwaves, or storms. Their impacts are less visible as they tend to cause more economic than physical damage, but often weigh heaviest for poorer groups. In , regular rainy season flooding costs $1.2 million per day as commuters' time is lost in navigating flooded and congested streets. In , businesses report relatively low on-site damages from seasonal flooding, but flood-induced transport and power disruptions cause over $250 million in indirect losses per year.

Dividend 2: Economic stimulus, job creation, and investments

are widely recognized by economists to suppress key drivers of growth and job creation. Unpredictability reduces planning horizons and positive risk taking. Looming background risks - like the possibility of instability, regulatory uncertainty, or financial crises - cause firms to hold back on investments that boost capacity and productivity, including technology upgrades, hiring, or research and development.

The same is true for looming natural risks - when the lack of disaster prevention measures means that shocks could quickly wipe out newly upgraded manufacturing equipment, then firms refrain from such investments. In , tourism managers are more likely to invest in new facilities if they don't anticipate them to be soon destroyed by hurricanes.

In short, when downside risks are well managed, then households and firms are reassured to invest in upside opportunities. They are less likely to hold on to cash reserves to cope with potential shocks and instead invest in productive assets that can drive economic prospects, modernization, and job creation.

And the benefits can extend to entire communities. Because unmanaged disaster risks make land less attractive, risk reduction measures can boost property values and associated tax revenues. In , flood-prone properties face a 30 percent discount compared with flood-safe properties. In , flood protection investments could lead to land value appreciations that would more than offset the investment costs.

Dividend 3: The co-benefits

To avoid displacing people, communal spaces, and biodiversity, these investments are often integrated into the existing social and natural environment. demonstrate how we can manage disaster risks, such as extreme or flooding, while providing green parks and urban regeneration that provide neighborhood amenities year round. Mangrove belts in not only mitigate storm surges but also support ecotourism. not only withstands shocks, but also offers higher service quality and reliability.

These co-benefits are central to realizing the gains from urbanization. After all, enhanced livability and quality of life make cities more desirable destinations for tourism, investments, and skilled labor.

Managing risk is a foundation for growth

Natural hazards and frequent disasters exacerbate these risks, contribute to high capital costs, and suppress investments in growth. However, because investments in resilience can reduce losses, unlock investments, and deliver short-term amenities, they can be a powerful lever for accelerating development. even suggest that their economic dividends can far exceed the avoided disaster losses. Thus, resilience measures - and each of their dividends - play a key role in shaping and communities that support socio-economic development and growth.