Social risk management is a new conceptual framework assigned and designed by the World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

. The objective of SRM is to extend the traditional framework of social policy

Social policy

Social policy primarily refers to guidelines, principles, legislation and activities that affect the living conditions conducive to human welfare. Thus, social policy is that part of public policy that has to do with social issues...

 to the non-market based social protection

Social protection

Social protection, as defined by the United Nations Research Institute For Social Development, is concerned with preventing, managing, and overcoming situations that adversely affect people’s well being...

 of which its three primary strategies include prevention, mitigation, and coping. It is now well understood that social unrest is positively parallel to the poverty. Assisting individuals, households and communities to elevate living standard above the poverty level will harmonize global economy and strengthen the social security.

Prevention strategies

Prevention strategies are those implemented to avert a risk. Some typical measures could be:

• In the labor market, SRM intervention targets skill training or job function improvement to reduce the risk of un/under- employment or low wages which are probably man-made.
• In the financial market, SRM emphasize on optimizing macroeconomic policies to reduce the shocks
  Shock (economics)
  In economics a shock is an unexpected or unpredictable event that affects an economy, either positively or negatively. Technically, it refers to an unpredictable change in exogenous factors—that is, factors unexplained by economics—which may have an impact on endogenous economic variables.The...
  
   of financial crisis, such as oil price surges, or unpredictable market moves on currencies, indices and blue chip stocks.
• For natural disaster
  Natural disaster
  A natural disaster is the effect of a natural hazard . It leads to financial, environmental or human losses...
  
  s and environment degradation, SRM are gear to deploy a networked warning system or sustainable, renewable and environmental friendly eco-system to minimize the impact of the consequences.
• In health care, SRM focuses on the prevention of pandemic
  Pandemic
  A pandemic is an epidemic of infectious disease that is spreading through human populations across a large region; for instance multiple continents, or even worldwide. A widespread endemic disease that is stable in terms of how many people are getting sick from it is not a pandemic...
  
   illnesses by implementing vaccination
  Vaccination
  Vaccination is the administration of antigenic material to stimulate the immune system of an individual to develop adaptive immunity to a disease. Vaccines can prevent or ameliorate the effects of infection by many pathogens...
  
   and public health education programs. Setting up rehabilitation centers to help drug addicts.
• In the public social security, establishing a community-based insurance schemes to compensate pensioners, disability or chronic illness person's living expenses. Building up nursing homes for elderlies and setting up public housing for homelesses and orphans.

Mitigation strategies

Mitigation strategies focus on reducing the risk. Common practices are:

• In the financial market, diversify
  Diversification (finance)
  In finance, diversification means reducing risk by investing in a variety of assets. If the asset values do not move up and down in perfect synchrony, a diversified portfolio will have less risk than the weighted average risk of its constituent assets, and often less risk than the least risky of...
  
  ing portfolios or hedging
  Hedge (finance)
  A hedge is an investment position intended to offset potential losses that may be incurred by a companion investment.A hedge can be constructed from many types of financial instruments, including stocks, exchange-traded funds, insurance, forward contracts, swaps, options, many types of...
  
   stocks to decrease the exposure of the financial risks.
• Microfinance
  Microfinance
  Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services....
  
   to the poor or jobless people.

Coping strategies

Coping strategies are designed to relieve the impact of the risk event once it has occurred. The typical examples are

• Issuing government relieve fund or publicly raising money.
• Setting up unemployment benefit schemes.

Source of social risks

The degree of social risks usually vary from idiosyncratic (micro), regional covariant (meso), to nation-wide covariant (macro). The following table lists the source of the risks that are being encompassed

Main Sources of Risks (adapted from Holzmann and Jorgensen, 2000)

	Micro (idiosyncratic)	Meso <-------->	Macro (covariate)
Natural		Rainfall Landslide Landslide A landslide or landslip is a geological phenomenon which includes a wide range of ground movement, such as rockfalls, deep failure of slopes and shallow debris flows, which can occur in offshore, coastal and onshore environments... s Volcanic eruption	Earthquake Earthquake An earthquake is the result of a sudden release of energy in the Earth's crust that creates seismic waves. The seismicity, seismism or seismic activity of an area refers to the frequency, type and size of earthquakes experienced over a period of time... s Flood Flood A flood is an overflow of an expanse of water that submerges land. The EU Floods directive defines a flood as a temporary covering by water of land not normally covered by water... s Drought Drought A drought is an extended period of months or years when a region notes a deficiency in its water supply. Generally, this occurs when a region receives consistently below average precipitation. It can have a substantial impact on the ecosystem and agriculture of the affected region...   Tornado Tornado A tornado is a violent, dangerous, rotating column of air that is in contact with both the surface of the earth and a cumulonimbus cloud or, in rare cases, the base of a cumulus cloud. They are often referred to as a twister or a cyclone, although the word cyclone is used in meteorology in a wider... es Asteroid impacts
Health	Illness Injury Disability Food poisoning	Pandemics  Food poisoning	Pandemics
Life-cycle	Birth Old age Death
Social	Crimes Domestic violences Drug addiction	Terrorism Terrorism Terrorism is the systematic use of terror, especially as a means of coercion. In the international community, however, terrorism has no universally agreed, legally binding, criminal law definition...   Gangs	Civil strife War War War is a state of organized, armed, and often prolonged conflict carried on between states, nations, or other parties typified by extreme aggression, social disruption, and usually high mortality. War should be understood as an actual, intentional and widespread armed conflict between political...   Social upheaval Drug addiction Child abuse Child abuse Child abuse is the physical, sexual, emotional mistreatment, or neglect of a child. In the United States, the Centers for Disease Control and Prevention and the Department of Children And Families define child maltreatment as any act or series of acts of commission or omission by a parent or... s
Economic	Unemployment Harvest failure	Unemployment Harvest failure Resettlement	Blue chip company collapsing Financial or currency crisis Market trading shocks
Administrative & Political	Ethnic discrimination	Ethnic conflict Riot Riot A riot is a form of civil disorder characterized often by what is thought of as disorganized groups lashing out in a sudden and intense rash of violence against authority, property or people. While individuals may attempt to lead or control a riot, riots are thought to be typically chaotic and... s Chemical & biological mass destruction Administrative induced accidents & disasters	Political induced malfunction on social programs Coup
Environmental		Pollution Deforestation Deforestation Deforestation is the removal of a forest or stand of trees where the land is thereafter converted to a nonforest use. Examples of deforestation include conversion of forestland to farms, ranches, or urban use....   Nuclear disasters Soil salinities Acid rain Acid rain Acid rain is a rain or any other form of precipitation that is unusually acidic, meaning that it possesses elevated levels of hydrogen ions . It can have harmful effects on plants, aquatic animals, and infrastructure. Acid rain is caused by emissions of carbon dioxide, sulfur dioxide and nitrogen... s	Global warming Global warming Global warming refers to the rising average temperature of Earth's atmosphere and oceans and its projected continuation. In the last 100 years, Earth's average surface temperature increased by about with about two thirds of the increase occurring over just the last three decades...

See also

• Emergency management
  Emergency management
  Emergency management is the generic name of an interdisciplinary field dealing with the strategic organizational management processes used to protect critical assets of an organization from hazard risks that can cause events like disasters or catastrophes and to ensure the continuance of the...
  
  
• Behavioral risk management
  Behavioral risk management
  Behavioral risk management is the process of managing* Individual behavior risks* Organizational behavior risks-See also:* Industrial and organizational psychology* Psychosomatic illness* Social risk management...
  
  
• Microcredit
  Microcredit
  Microcredit is the extension of very small loans to those in poverty designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit...
  
  
• Microfinance
  Microfinance
  Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services....
  
  
• Risk management
  Risk management
  Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities...