Halfway through 2011, estimated economic losses already USD265 billion – DRR needed more than ever, says UN

Geneva, 14 July - So far this year, the economic losses from very severe natural hazards totals some USD265 billion. According to reinsurance giant Munich RE, 2011 is the highest-ever loss year on record, despite the fact the first half of the year has only just been completed. Reducing human and economic losses is needed now more than ever and that means investing in disaster risk reduction.

Expanding on Munich RE’s assessment, the 2011 Global Assessment Report on Disaster Risk Reduction (GAR11) released by the United Nations secretariat of the International Strategy for Disaster Reduction in May, revealed that the risk of economic loss is now rising faster than wealth creation. This is particularly apparent in high-income countries. For example, since 1980, the risk of economic loss to tropical cyclones increased by 262 percent in high-income countries compared to 155 percent in low-income countries.

“The figures released by Munich RE highlight the trend, particularly for developed countries, that was reported in GAR11,” said Margareta Wahlström, Special Representative of the Secretary-General for Disaster Risk Reduction. “The USD265 billion losses exceed the USD220 billion for the whole year of 2005, previously the costliest year. And, we are only halfway through 2011,” added Ms. Wahlström. Most of the 2011 losses were caused by the earthquake in Japan on 11 March.

“We can do nothing about the severity of earthquakes, tsunamis, cyclones and other natural hazards. But, what we can do is to understand our risks and reduce our vulnerability as well as the impact to our economies to these hazards. We cannot afford to wait as the costs from disasters continue to rise,” warned Ms. Wahlström.

Investing in disaster risk reduction has been on the agenda for both governments and the international community. In the Second Session of the Global Platform on Disaster Risk Reduction held in 2009, participants agreed to target the equivalent of 10 per cent of humanitarian relief funds for risk reduction. Similarly, 10 per cent was also proposed for post-disaster reconstruction and recovery projects as well as national preparedness and response plans. Calls were also made for at least one per cent of all national development funding and all development assistance funding to be allocated to risk reduction measures.

Munich RE, one of the members of UNISDR’s private sector advisory group (PSAG), noted that first-half calendar year losses are typically less than second-half losses which are often affected by hurricanes in the Atlantic and typhoons in the northwest Pacific.