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Lack of resilience to natural disasters leaves growth economies at risk
Written by Deborah Ritchie
With less than 10,000 lives lost worldwide, 2012 was the least deadly for natural disasters in the last 10 years, due largely to the lack of major events outside high-income countries with the infrastructure and resources to withstand their socio-economic impacts. However, new research from risk analysis company, Maplecroft reveals that resilience to major weather and seismic events is not improving in some of the world’s most important growth markets, leaving large sections of their populations and economies at ‘extreme risk.’
Over 2012, fatalities from natural hazards stood at nine per cent of the yearly average of 106,000 from the previous decade, while recorded natural disasters also saw a significant fall to 251 events, constituting a 65% drop on the 10 year average of 380.
According to Maplecroft’s annual Natural Hazards Risk Atlas, which evaluates the exposure and resilience of 197 countries to 12 natural hazards, there is a danger that the relatively quiet year of 2012 may lead to further complacency in relation to disaster risk preparedness in some of the most exposed and least resilient countries. This would have potentially devastating consequences when major natural hazards inevitably do occur. Consequently, supply chains and investors are exposed to greater risk than anticipated, as natural disasters can exacerbate other political and societal risks, such as regime stability, food security and social unrest.
Maplecroft states that the substantial drop in global fatalities not only relates to the reduced number of natural hazards, but also to the strength of resilience in the countries where 2012’s major events occurred. Superstorm Sandy, in spite of its strength and size, killed only 110 people in the United States, due largely to the country’s highly sophisticated response and well developed infrastructure and communications networks. In contrast, the deadliest event of 2012, Typhoon Bopha in the Philippines, resulted in over 1,000 deaths even though fewer people were exposed to the storm’s path as it swept across Manila and the surrounding region.
This disparity is revealed in Maplecroft’s Socio-economic Resilience Index, a key element of the Natural Hazard Risk Atlas, which ranks the US at 169th and ‘low risk’, despite it featuring in the 20 most at risk countries for exposure to hurricanes, tsunamis, extra-tropical cyclones, storm surges, flooding, volcanic risk and wildfires. The Philippine’s socio-economic resilience to natural disasters is meanwhile ranked 65th and ‘high risk.’ In spite of economic growth of over 5% in each of the last four years, better disaster resilience has not materialised and the country’s ranking in the index has not improved.
The slow rate of progress in socio-economic resilience can also be seen in other emerging growth markets, especially in Asia, including: Bangladesh (42nd), India (60th), Indonesia (68th), Vietnam (72nd) and China (93rd), all of which are rated ‘high risk.’ None saw any significant improvement in the index from 2012. These countries are not only exposed to multiple devastating hazards, but lack resilience to the impacts and show a poor capacity to bounce back, which could undermine economic growth; disrupt business operations and supply chains. Without significant improvements in resilience, Maplecroft states that natural hazards are more likely to manifest as disasters in these countries – particularly in the mega-cities, where growing populations expand into disaster prone areas, such as flood plains and low lying coastal regions.
They also feature prominently in Maplecroft’s Natural Hazard Risk – Absolute Economic Exposure Index, which assesses the proportion of a country's non-agricultural economy exposed to natural hazard risks. In this index, China (3) and the Philippines (4) are rated ‘extreme risk,’ while India (4th) and Indonesia (7th) feature in the ‘high risk’ category. This ranking reflects that these countries have the most globally significant concentrations of economic assets exposed to major natural hazards.
“With the increasing global economic importance of these nations and their interconnectivity to global markets, a major event in one these financial centres increases the risk of economic contagion,” stated Helen Hodge, head of maps and indices at Maplecroft. “In particular, a limited resilience capacity to ‘bounce-back’ from disasters will amplify this risk and prolong economic down-time.”
According to Maplecroft, a lack of socio-economic resilience to the impacts of natural disasters is felt most acutely by the world’s poorest states, particularly in Africa, which hosts 19 of the 23 ‘extreme risk’ countries in the index. The ten countries with the least resilience to disasters include: Somalia, Afghanistan, DR Congo, Sudan, Central African Republic, Chad, South Sudan, Yemen, Eritrea and Guinea-Bissau. Many of these economies are, however, resource rich mineral producers where investments will be highly exposed should a disaster occur.