Asia faces rising cost from disasters, report says

Nopporn Wong-Anan Reuters 21 Sep 10;

(Reuters) - China, India and Indonesia are likely to face much higher losses from natural disasters in coming decades as their economies grow faster than their capacity for disaster prevention and relief, a new report has forecast.

That means more foreign investment projects will be exposed to disaster damage as economic growth brings more factories, roads and other infrastructure to the region, which suffers the highest number of disasters in the world.

But the threat also brings opportunities for investors to help countries in the region with a poor track record of disaster management to improve their monitoring and relief capabilities, Political & Economic Risk Consultancy said in its latest report.

As Asian countries grow richer, natural disasters could have more political repercussions on governments, both democratic and authoritarian, if their responses are deemed inadequate, the Hong Kong-based firm said in its fortnightly report.

"If countries like China, India and Indonesia fail to improve their disaster response capabilities, it could create systemic shortcomings that ultimately result in social and political instability," PERC said.

Asia has not suffered the highest dollar costs from disaster damage, but it has had many more people killed and affected by disasters than other parts of the world due to having the largest share of the global population.

But the monetary costs in the rapidly developing region could rise sharply if governments fail to come up with effective warning systems and relief strategies, PERC said.

Commending Chinese authorities for their "good job" of staff mobilisation for relief efforts, the agency said China must be transparent in its handling of domestic emergencies and publicising human errors that could have aggravated them.

India is credited for its early warning system that has saved tens of thousands of lives each year, but officials are often criticised for their ineffective responses to major disasters.

Among 12 economies covered in the report, Thailand and the Philippines are criticised for their governments' inability to deal effectively with natural disasters and man-made emergencies such as the Manila hostage crisis and Bangkok political riots.

"Thailand's poor capabilities for managing life-threatening emergencies should be a concern for anyone investing or conducting business in the country," the report said, referring to a two-month cover up of the outbreaks of bird flu in 2003.

(Reporting by Nopporn Wong-Anan; Editing by Andrew Marshall)