Inside Story

Asia and the economics of natural disasters

How big a threat is the rising number of natural disasters to the rapid economic progress in the Asia-Pacific region?

Typhoon Bhopa has once again thrown a spotlight on Asia’s vulnerability to massive natural disasters.

For the first time it looks like growth rates themselves are a threat, which brings attention to finance ministers and leaders of countries the importance of addressing natural disasters.”

– Vinod Thomas, Asia Development Bank

The typhoon has killed at least 700 people in the southern Philippines, and rescuers are searching for another 800 – many of them deep-sea fishermen – who are listed as missing.

A new UN report bears out that vulnerability. It says Asia suffers from more natural disasters than anywhere else in the world.

The report says in 2012, it is the flooding that was the most destructive. Floods killed the most people and they caused the most losses. Of natural disasters this year, more than half of the deaths in Asia were because of flooding.

And though the number of people who die from disasters is decreasing, the economic impact remains significant.

Some of the economies in Asia …  are seeing phenomenal economic growth rates at the moment, and for me the key here is the ability to translate those phenomenal economic growth rates  into the short-term gains which are needed to build a more resilient society.

– Helen Hodge, Maplecroft

Asia’s economy has been the one glimmer of hope in an increasingly gloomy global outlook, but experts say that continued poor preparation for natural disasters could quickly curb that growth.

So, what are the economic implications of natural disasters? And what can be done to better protect people from these recurrent disasters?
To help answer these questions Inside Story is joined by guests: Margareta Wahlstrom, the special representative of the UN secretary-general for disaster risk reduction; Manu Gupta, the chair of the Asia Disaster Reduction and Response Network; and Helen Hodge, an associate director at the risk analysis company, Maplecroft.

“I don’t think we are learning fast enough because disasters are increasing in terms of their frequency and their intensity, leaving very little room for us to review what went wrong last time. This is becoming even more unpredictable by the day …. It’s a vicious cycle, we need to look at the causes that are pushing people from the rural hinterlands to urban areas ….  I don’t think governments are prepared to look at the abnormally-high level of urbanisation that is taking place …. We need better prediction systems. One thing about climate change is that we don’t have enough downscaled data to be able to come up with exact projections.”

Manu Gupta, the chair of the Asia Disaster Reduction and Response Network

Countries that have suffered the most deaths from natural disasters over the last 20 years:

  • Haiti, with almost 231,000 deaths; most of them killed in a 7.0 magnitude earthquake in 2010
  • Indonesia, with around 185,000 deaths; the country was the epicentre of the 2004 earthquake and tsunami which was one of the worst natural disasters in history
  • Myanmar, with almost 140,000 deaths; among the disasters that the country has faced was Cyclone Nargis in 2008
  • China, with around 128,000; the country was hit by a severe earthquake in Sichuan province in 2008
  • India, where natural disasters have killed just over 100,000 people