Shrinking the financial fallout of natural disasters

IRIN: Relief will be more easily and quickly available, and the economic fallout much more manageable, if governments project and plan fiscally for potential natural disasters and their human and economic toll well in advance, experts say.

The UN Office for Disaster Risk Reduction (UNISDR) has calculated that since 2000, economies have lost as much as US$2.5 trillion due to natural hazards. In 2011 Thailand lost around 5 percent of its gross domestic product (GDP) to floods, and Japan lost some 4 percent of its GDP to the earthquake and tsunami.

The latest major disaster in the region, Typhoon Haiyan in the Philippines, is likely to cause losses of around $12.5 billion, or 5 percent of the 2012 GDP in this lower middle-income country, Margareta Wahlstrom, the Special Representative of the UN Secretary-General for Disaster Risk Reduction, told IRIN.

The death and destruction in the Philippines is the worst since 1991. Up to 9 December 2013, the typhoon, which struck on 8 November, had affected more than 12 million people, killed nearly 6,000 and left almost 1,800 more missing.

“It is vital that finance ministers and policymakers understand the simple truth that investing in reducing disaster risk, protecting critical infrastructure, such as schools, hospitals and transport systems, pays rich dividends,” Wahlstrom said...

Hurricane Irene seen from Cuba in 2011, shot by Superikonoskop, Wikimedia Commons, under the Creative Commons Attribution-Share Alike 3.0 Unported, 2.5 Generic, 2.0 Generic and 1.0 Generic license