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The international community spent $13.5 billion on reducing the risk of disasters in the past two decades, just 40 cents for every $100 of aid, and a tiny amount compared with the $862 billion in disaster losses suffered by developing countries, according to a new study.

The report from the London-based Overseas Development Institute (ODI) said funding for disaster risk reduction (DRR) has been concentrated in a small number of middle-income countries, such as China and Indonesia, with many high-risk nations - especially poor, drought-prone states in sub-Saharan Africa - receiving negligible financing.

The top ten countries received nearly $8 billion between them, and the remaining 144 just $5.6 billion combined. The inequity of disaster risk reduction spending is clear when broken down on a per capita basis. Ecuador, the second-highest recipient per capita, got 19 times more than Afghanistan, 100 times more than Costa Rica and 600 times more than Democratic Republic of Congo , for example.

There has been some progress in protecting people and their assets from floods and other disasters caused by natural hazards, the report said. National governments have started to put in place more effective ways of warning and evacuating their populations, as well as reducing their vulnerability to economic shocks.

"Lives have been saved, livelihoods protected and resilience built. However, we need more, faster and better action to contain the current trend of risk," the report said.

The researchers analysed data on more than a million aid projects, for the period between 1991 and 2010. Of $3 trillion in total aid over that period, nearly $107 billion was spent on natural disasters. Within the disaster funding, 12.7 percent ($13.5 billion) went to disaster risk reduction, compared with 65.5 percent for emergency response ($69.9 billion) and 21.8 percent ($23.3 billion) for reconstruction and rehabilitation.

"Nine out of 10 dollars is spent only after a disaster has already hit," Jan Kellett, the report's lead author and senior ODI research advisor on climate and environment, told a launch event on Friday. Yet, despite the "worrying" evidence presented in the study, Kellett identified some positive signs.

Donors are now allocating less to big infrastructure projects for flood prevention and more to technical support for developing-country governments and early warning systems. Spending levels have become more stable in the past few years, at close to $1 billion per year, and international investment is moving away from the richest middle-income countries, Kellett noted.

One key development has been the growing allocation of money from climate change adaptation budgets since 2008, with disaster risk reduction activities now accounting for a quarter of that pot, he added.

MORE MONEY, BETTER MONEY

At the same time, there is a need to channel much more disaster risk reduction funding towards low-income African countries that have been hit by persistent droughts in recent years, the report said. Niger, Eritrea, Zimbabwe, Kenya and Malawi saw 105 million people affected by drought in the past two decades, but their combined disaster risk reduction financing was just $116.5 million - the same as Honduras alone.

Muhammadu Dikko Ladan, Niger's Honorary Consul in Britain, told the London discussion that his country did not have enough money to spend on disaster reduction because cash that was meant for this has been diverted to tackle hunger and the spill-over effects of conflicts in the region, especially in neighbouring Mali.

ODI's Kellett said the problem in war-torn, fragile states such as Afghanistan is the "disconnect" between different communities in the aid world, with those working on conflict tending to overlook often interlinked issues of climate change and natural disasters. If an aid group is leading a community reconciliation initiative, it could also look at how to protect those same people from floods, storms or earthquakes, he suggested.

Experts welcomed the growing sums being spent on disaster risk reduction by developing countries themselves - with Indonesia, the Philippines, China, Colombia and Mexico blazing a trail. Francis Ghesquiere, head of the Global Facility for Disaster Reduction and Recovery at the World Bank, which jointly funded the research, said this has been partly driven by the growing availability of information about actual and potential disaster losses.

"Now there is a much more informed dialogue, and it is starting to stick," he said. "We have seen more and more ministries of finance - and then line ministries - that actually understand that if they want to protect their national budget and their fiscal balance, they need to have a certain buffer because they will be affected by disasters, but that they also have to start investing to reduce the risk overall." We are "only seeing the beginning of investment in DRR", and volumes will rise in the future, he predicted.

While there may be limited scope for overall aid levels to increase given fiscal constraints in many rich donor nations, it is widely expected that a larger proportion of international development spending will become more sensitive to risk, and that disaster risk reduction will be incorporated in the next set of global development goals, due to start in 2016.

Humanitarian agencies that respond directly to crises have also become much more aware of the need to prevent the same disasters happening again, said Saleh Saeed who heads the Disasters Emergency Committee, a UK-based alliance of 14 aid charities that runs joint appeals for public donations.

"Our agencies have become more effective at deciding to spend a proportion of their funds on disaster risk reduction," he said. "DRR should not compete with emergency response, but complement it."

While the report called for an increase in disaster risk reduction money from donor governments, it also stressed the need for "better financing" – that is, finance that is integrated with other types of aid spending, well-coordinated, and targeted where it is most needed.

"This demands, above all else, that the business case for investing in the reduction of disaster risk becomes clearer and stronger – and this is one of the key tasks ahead,” Kellett said in a statement on the study.

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