standard Countries at risk of paying the greatest economic costs for disasters

A new report has ranked 196 countries according to their levels of economic risk to natural disasters.  Published by Maplecroft, a private risk research firm based in Bath, UK, the report ranks countries according to their economic exposure to hazards, including earthquakes, tsunamis, volcanoes and landslides, along with other factors such as socioeconomic resilience.  While the results certainly provide some depth in understanding countries that are most economically vulnerable to hazards, the impact of disasters can hardly be expressed in economic terms alone.  Data for the report (from 2005-2010) was derived from the World Bank, International Monetary Fund and the Central Intelligence Agency in the US, according to AFP.  Here are the top eleven countries classified as ‘extreme’ and ‘high’ risk’ of paying the greatest economic costs for disasters:

Extreme Risk

1. United States

2. Japan

3. China

4. Taiwan

High Risk

5. Mexico

6. India

7. Philippines

8. Turkey

9. Indonesia

10. Italy

11. Canada

As many people are aware, hazards kill hundreds to tens or even hundreds of thousands of people, but only analysing the economic costs provides a contrasting picture to what actually takes place globally.  In his research, Director of IHRR Dave Petley has recorded hundreds of people killed by landslides alone every year (see How many people die from landslides? and Landslide fatalities in 2010).  The Maplecroft report says the US is the top country at risk of paying the greatest economic costs for disasters.  But in terms of loss of life, without a doubt developing countries pay the biggest price.  In Haiti, for example, more than 230,000 people were killed by the 2010 earthquake in Port-au-Prince.  Interestingly, the US and Japan were rated by Maplecroft as ‘low risk’ when it comes to ‘social and economic ability to cope with a disaster’.  Japan in particular has been struggling economically after the earthquake and subsequent tsunami ripped through the northeast inciting one of the worst nuclear disasters in history.  Japan is certainly able to cope, but taking into account recent events, its level of risk in dealing with disasters socially and economically is at least debatable.

The fact that the US is most at risk when it comes to paying out for disasters comes as no surprise.  In recent years, the US has exposed its vulnerability to many different kinds of disasters, not all of them ‘natural’.  It has been swept up into one disaster after the next from Hurricane Katrina to the Deepwater Horizon oil spill, the 2010 banking crisis, forest fires, tornadoes and more recently a hurricane that hit the east coast.  Nearly 10 years ago the country was devastated by the 9/11 attacks and in some ways is still coping, especially with the US government’s implementation of advanced, high-tech forms of security that the world has never before seen.  Meanwhile, the west coast is well over due for a high-magnitude earthquake that could be truly devastating in terms of loss of life and economic cost.

Understanding economic vulnerability is important for preparing for disasters as it is definitely a primary driver for mitigating large or small-scale hazards.  According to Maplecroft, ‘natural disasters have been more costly this year than any other year on record’.  This is without including costs associated with drought and damage to agriculture, which countries such as China, Pakistan and many developing countries are extremely vulnerable to.  Last year’s massive flood in Pakistan has cost billions of dollars.  African countries are also highly susceptible to drought that is expected to worsen due to climate change.

In some situations developed countries do stand to lose the most economically from disasters because they have the most money and resources, but the developing world takes on the heaviest burden as a whole when it comes to hazards.  China was ranked as the third highest in ‘extreme risk’ to paying the most money for disasters.  As countries develop rapidly, ironically, they also have more to lose economically as a whole, yet developing the necessary infrastructure will not only help them to mitigate hazards, but save lives and allow them to become more resilient to future disasters.  When it comes to loss of life, an earthquake that takes place in a developed country such as New Zealand does not have the same impact as a similar magnitude earthquake in India.  Dr Alex Densmore and Dr Mark Allen organised a workshop (see When the Shaking Stops) that included researchers who are specialised in buildings that can withstand earthquakes (see Seismic safety in India) and it is these forms of infrastructure that developed countries have and developing countries like Haiti need.

Further dialogue (or any dialogue) between developed and developing countries in how they plan for or mitigate disasters could prove extremely helpful in the long-run.  People in developing countries could greatly benefit from advances made in science and technology as well as disaster management, while developed countries could learn a great deal more about the hazards that many people in the developing world experience on a regular basis.  Regardless of where disaster strikes, people are often left with little to nothing and if the developed world can learn how to be resilient with fewer resources from those who know how to survive with next to nothing, it could likely be to everyone’s advantage.

Links

Natural Hazards Risk Atlas 2011. Maplecroft

Asia’s giants exposed to natural disasters – survey. AFP

Natural Hazards Risk Atlas 2011: Nations Most Exposed To Natural Disasters. Huffington Post

Haiti’s Buildings Weren’t Fit To Withstand Quakes. NPR

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