When disasters can help development

Euston Quah & Suman Kumari Sharma, Straits Times 8 Jul 09;

DISASTER events cause losses in infrastructure, physical injuries and fatalities. Last year alone, natural disasters caused 235,816 fatalities, affected 2.1 billion people and resulted in economic damages worth US$181 billion (S$264 billion).

When disaster costs are expressed in terms of gross domestic product (GDP) of a country, the ratios are seen to be higher in developing countries than in developed countries.

Historically, Asian countries have suffered a greater loss in human lives and property damage due to a higher population density, rapid urbanisation, inadequate infrastructure growth and a higher rate of natural hazard incidents.

Prior to the 1970s, disasters were considered as outcomes of exogenous, unpredictable events. Disaster research primarily remained the domain of physical scientists and engineers. This dominant approach of disaster analysis primarily focused on physical systems, structures and material damage without any consideration to social, economic, demographic and political forces associated with the vulnerabilities of countries and societies.

An alternative approach, initiated during the mid-1970s, highlights the need to incorporate the underlying socio-economic and political aspects in disaster analysis. This approach maintains that issues related to hazards and disasters cannot be understood unless their linkages with societies and the affected communities are taken into account.

Since a hazard can become a disaster only through its impact on vulnerable population, an effective development strategy must, therefore, incorporate vulnerability reduction measures to preclude a hazard from turning into a disaster.

The foundation of this alternative approach is based on a clearer understanding of the relationship between disaster and development, together with a country's resilience in coping with a disaster.

While it is evident that disasters have a short-term negative impact on development, the question remains: Do they always hamper development efforts? This question does not have a simple answer as the relationship between disaster and development shows a two-way causality.

Disasters cause temporary setbacks to a country's development via direct effect - loss to physical assets and human capital such as buildings, bridges, dams and infrastructure, loss of lives and injuries to humans and animals - and indirect effect when it slows economic activity such as in the agriculture and financial sectors.

Both effects can cause production in the affected area to decline, disrupting macro-economic variables of an economy, such as GDP, investment, trade, public expenditure, inflation and unemployment.

Disasters can negatively influence a number of cross-cutting themes, such as environment, governance, human psychology, gender and institutions. Furthermore, major disasters can have differential impacts on marginalised groups, particularly women and minorities.

Development failure on its own may aggravate disaster risk. At times, development failure may increase individuals' and/or community's vulnerabilities to hazard events. Examples include environmental degradation, over-exploitation of resources, institutional failure in governing development activities and corruption. Furthermore, a failure to address issues related to climate change may result in even higher losses as a consequence of extreme weather events.

Responses to a disaster can increase hazard risk and induce future disasters. In the immediate aftermath of a disaster, humanitarian assistance can, at times, undermine local institutions, governance and technical capabilities which are needed for longer-term resilience. Donor financing, at times, may not be adequately aligned with longer-term needs. The responses of governments in the aftermath of a disaster can divert resources away from other development activities.

Approached properly, however, disasters can offer opportunities for longer- term development. Case studies on post-disaster responses show that an efficient and participatory governance structure can provide opportunities for physical, social, political and environmental development in the affected area not only through reconstruction but also through adoption of longer-term perspective plans.

Disasters raise short-term awareness among policymakers where areas were neglected in past policies. But the real opportunity for improvement comes when long-term policies are formulated and carried out. For example, a disaster could spur donors and organisations to provide savings and credit facilities, insurance services, reserve creation and risk transfers.

Disasters can also provide opportunities for improving and strengthening cooperation and good neighbourliness among countries affected by the same event. Disaster responses across countries can lead to better relationships as countries realise that one nation's actions alone may not be adequate to cope with the disaster.

For instance, the haze and forest fire episodes in South-east Asia in 1997 and 2006 provided the affected countries opportunities to voice their concerns, mobilise resources and seek longer-term solutions that benefit all.

The relationship between development and disasters is, therefore, not straightforward. Major disasters typically cause short-run disruptions to a country's development but their longer-term impacts are influenced by many interlinked factors.

However, in order for disasters to have a positive impact on development, disaster issues should be managed and governed properly through an efficient and participatory institutional structure.

Such a structure can mitigate future impacts and increase societal resilience to disasters, making future disasters manageable, predictable and non-disruptable to any country's course of development. Indeed, disasters can only strengthen the resolve to correct weaknesses in an economy and in doing so, advances a country's path to further sustainable development and higher economic growth.

Euston Quah is Professor of Environmental Economics and Suman Kumari Sharma is a lecturer in economics at the Nanyang Technological University.