Debate regarding the relationship between socioeconomic development and natural disasters remains at the fore of global discussions, as the potential risk from climate extremes and uncertainty pose an increasing threat to developmental prospects. This study reviews statistical investigations of disaster and development linkages, across topics of macroeconomic growth, public governance and others to identify key challenges to the current approach to macro-level statistical investigation. Both theoretically and qualitatively, disaster is known to affect development through a number of channels: haphazard development, weak institutions, lack of social safety nets and short-termism of our decision-making practices are some of the factors that drive natural disaster risk. Developmental potentials, including the prospects for sustainable and equitable growth, are in turn threatened by such accumulation of disaster risks. However, quantitative evidence regarding these complex causality chains remains contested due to several reasons. A number of theoretical and methodological limitations have been identified, including the use of GDP as a proxy measurement of welfare, issues with natural disaster damage reporting and the adoption of ad hoc model specifications and variables, which render interpretation and cross-comparison of statistical analysis difficult. Additionally, while greater attention is paid to economic and institutional parameters such as GDP, remittance, corruption and public expenditure as opposed to hard-to-quantify yet critical factors such as environmental conditions and social vulnerabilities. These are gaps in our approach that hamper our comprehensive understanding of the disaster-development nexus.
The specific social-ecological contexts in which disaster risk arises are highly complex, as are their immediate and longer-term implications. The concept of development is equally multi-dimensional. When these complex factors must be framed within statistically testable questions, it is easy to imagine that finding a robust ‘yes’ or ‘no’ answer can be extremely challenging. Even on the relatively narrower topic of the relationship between natural disasters and GDP growth implications, international confidence is considered ‘medium’, as explained in the recent Special Report on Managing the Risk of Extreme Events (SREX) report IPCC, 2012: Differences [in estimates of disaster impacts on the macroeconomy] can be partly explained by the lack of a robust counterfactual in some studies (e.g. what would GDP have been if a disaster had not occurred?), failure to account for the informal sector, varying ways of accounting for insurance and aid flows, different patterns of impacts resulting from, for example, earthquakes versus floods, and the fact that national accounting does not record the destruction of assets, but reports relief and reconstruction as additions to GDP.
Disaster derail development
According to the United Nations, over the past twenty years disasters from natural hazards have affected 4.4 billion people, claimed 1.3 million lives and caused $2 trillion in economic losses. For the first time, disaster losses globally have topped $100bn for three consecutive years (2010–2012), far outstripping humanitarian aid. According to Ban Ki Moon, „Economic losses from disasters are out of control.‟2 Disasters have a devastating impact on development. Families lose homes, livelihoods and loved ones, communities lose businesses, jobs and services, children and particularly girls miss school and are at risk of early marriage – the list of impacts goes on.
Disasters lead to enormous economic losses that are both immediate as well as long term in nature and demand additional revenues. Also, as an immediate fall-out, disasters reduce revenues from the affected region due to lower levels of economic activity leading to loss of direct and indirect taxes. In addition, unplanned budgetary allocation to disaster recovery can hamper development interventions and lead to unmet developmental targets.
Disasters may also reduce availability of new investment, further constricting the growth of the region. Besides, additional pressures may be imposed on finances of the government through investments in relief and rehabilitation work.
In the 2001 earthquake in Gujarat, more than 14,000 lives were lost, ten lakh houses were damaged and the asset loss has been indicated to be worth 15,000 crore. Tables 7.2 to 7.5 give an indication of the magnitude of the damage and losses incurred by the country in recent natural disasters.
The extent to which a population is affected by a calamity does not purely lie in the physical components of vulnerability, but is contextual also to the prevailing social and economic conditions and its consequential effect on human activities within a given society. Research in areas affected by earthquakes indicates that single parent families, women, handicapped people, children and the aged are particularly vulnerable social groups. The geophysical setting with unplanned and inadequate developmental activity is a cause for increased losses during disasters. In the case of India, the contribution of over-population to high population density, which in turn results in escalating losses, deserves to be noted. This factor sometimes tends to be as important as physical vulnerability attributed to geography and infrastructure alone.
The incidence of disasters from natural hazards is increasing in every region of the world; reported weather-related disasters have tripled in 30 years. The numbers of people exposed to floods and tropical cyclones have doubled and tripled respectively since 1970.In the Sahel region of West Africa, a food crisis used to strike once a decade; but there have been three major food crises in the last 10 years, so people have had little time to get back on their feet, let alone develop buffers, before the next one hits.
Sustainable and significant reduction of disaster risk can only be achieved by working across policy frameworks. The development of the post2015 development framework, the successor to the Hyogo Framework for Action, and a new international climate change agreement, all in 2015, offer an unparalleled opportunity to go beyond the incremental progress to date, to significantly reduce risk for vulnerable and marginalised people all over the world.
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