Global economy can endure disaster for a week

Nina Chestney in AlertNet, via Reuters: The global economy could withstand widespread disruption from a major natural disaster or attack by militants for only a week, a report by UK-based think-tank Chatham House said on Friday.

The frequency of natural disasters, such as extreme weather events, appears to be increasing and globalisation has increased their impact, the report found.

Events such as the 2010 volcanic ash cloud, which grounded flights in Europe, Japan's earthquake and tsunami and Thailand's floods last year, showed that key sectors and businesses can be severely affected if disruption to production or transport goes on for more than a week. "One week seems to be the maximum tolerance of the 'just-in-time' global economy," Chatham House said.

The world's economy is currently fragile, leaving it particularly vulnerable to unforeseen shocks. Up to 30 percent of developed countries' gross domestic product could be directly threatened by crises, especially in the manufacturing and tourism sectors, it said.

It is estimated that the 2003 outbreak of severe acute respiratory syndrome (SARS) in Asia cost businesses $60 billion, or about two percent of east Asian GDP, the report said. After the Japanese tsunami and nuclear crisis in March last year, global industrial production declined by 1.1 percent the following month, according to the World Bank....

ณวSuriya Thonawanik took this picture of the 2011 floods in the Ayutthaya province of Thailand, and generously released it into the public domain