'It is a common theme that marginal farmers, small-scale entrepreneurs and poor urban households shoulder the greatest losses in disasters'
By Andy McElroy
GENEVA, 14 November 2013 –
It is the poor and people engaged in family-based and informal sector enterprises who will bear the brunt of typhoon Haiyan.
As initial estimates of economic losses from the disaster are put at up to $US 15 billion, or 5 per cent of the Philippines’ annual GDP, the Head of Advocacy and Outreach of the UN Office for Disaster Risk Reduction (UNISDR), Mr Jerry Velasquez, said: “It is a common theme across Asia that marginal farmers, fishermen, small-scale entrepreneurs and poor urban households shoulder the greatest losses from disasters.”
Losses from the less devastating tropical Ketsana and typhoon Parma, which hit Luzon in quick succession in 2009, were estimated at 2.7 percent of GDP. A post disaster needs assessment of these disasters found that it was the poor and informal business enterprises that were hardest hit.
Mr Velasquez added that evidence from typhoon Ketsana in Lao in 2009, the Pakistan floods in 2010 and the Thailand floods in 2011 was also consistent: “It is struggling private citizens and communities who pay the highest price.”
Meanwhile, the Philippines government faces the possibility of ever-widening fiscal gaps as the hazards it experiences intensify because of climate change-induced ocean warming.
The UN’s 2013 Global Assessment Report on Disaster Risk reduction (GAR13) highlights the country’s fiscal vulnerability: “The Philippines has constantly experienced financing gaps owing to disasters since 2000.”
The Report also said countries that experience such severe typhoons will “experience lower GDP growth in the 15 years that follow compared with the estimated growth that would have occurred without cyclone impacts”.
Mr Velasquez said: “Unfortunately countries that can least afford to lose investment are losing the most. In such countries as the Philippines it is vital to protect economic growth through disaster risk sensitive investment.
“A country’s economic resilience refers to its capacity to absorb losses and recover. It also depends on the government’s ability to finance recovery through an array of public and private mechanisms. The Philippines has a long and costly road to recovery ahead.”
“The direct economic cost of a disaster of course carries a big negative impact. However, it is the indirect costs of absent workers, interrupted production and distribution and disrupted power, telecommunication and water supplies that often hits the private sector and public finances hardest.”
“Such rising economic losses are part of a global trend because of increased exposure of assets in hazard-prone coastal areas and river basins. These losses will continue to escalate unless disaster risk management becomes a core part of business investment strategies for both governments and businesses.”
Mr Velasquez said reducing economic exposure would need to be at the heart of any effective post-2015 international framework due to be agreed at the 3rd World Conference on Disaster Risk Reduction in March 2015, in Japan.
The UN’s 2012 Asia Pacific Disaster Report highlighted said that between 1970 and 2010, the number of people in Asia Pacific residing in cyclone-prone areas has grown from 71.8 million to 120.7 million.