Disasters can take many different forms, and the duration can range from an hourly disruption to days or weeks of ongoing destruction. Disasters also can be caused by humans. Hazardous materials emergencies include chemical spills and groundwater contamination. Workplace fires are more common and can cause significant property damage and loss of life. Communities are also vulnerable to threats posed by extremist groups who use violence against both people and property.
High-risk targets include military and civilian government facilities, international airports, large cities and high-profile landmarks.
Cyber-terrorism involves attacks against computers and networks done to intimidate or coerce a government or its people for political or social objectives.
This assignment aims to outline disasters that may pose to be a threat to national development and explain how to effectively ensure preparedness for emergency response, post disaster management and business continuity.
· Agricultural diseases & pests
· Damaging Winds
· Drought and water shortage
· Floods and flash floods
Chemical threat and biological weapons
Natural disasters such as earthquakes, floods, typhoons, and hurricanes inflict serious damage and so seem to be bad for the economy.
For firms, natural disasters destroy tangible assets such as buildings and equipment as well as human capital and thereby deteriorate their production capacity. These adverse impacts may sometimes be fatal to the firms and result in them being forced to close down.
But the academic evidence on the economic impact of natural disasters is mixed.
As reviewed in surveys such, the existing studies report that natural disasters may even promote growth. One possible mechanism behind this positive impact is the enhancement of the productivity of the economy’s corporate sector. These studies use aggregate data, they cannot answer why and how corporate productivity improves due to natural disasters. We thus need analyses that use micro-data to clarify the mechanisms through which natural disasters affect the productivity of an economy’s corporate sector.
A channel through which natural disasters may enhance corporate productivity is the improvement in the productivity of firms that survive the disasters, which is due to the update of their capital stock and the adoption of new technologies. This mechanism is often called creative destruction.
There is some evidence for this hypothesis, although mixed. De Mel et al (2011) find that the firms that suffered more damage to their assets because of the devastating tsunami in Sri Lanka in 2004 exhibited smaller profits, sales, and capital stock. Cole et al. (2013) and Tanaka (2015) find that the plants located in the most devastated districts during the 1995 Kobe Earthquake exhibited smaller employment and value-added growth. These findings are inconsistent with creative destruction.
According to Hosono et al. (2012) the focus on the Kobe Earthquake find more investment by the firms located inside the affected area than those located outside, supporting the creative destruction hypothesis. Also consistent with this hypothesis, the European firms located in regions affected by a major flood in 2000 had higher asset and employment growth as compared with non-affected firms, although they also find that the firms in the affected regions exhibited smaller value-added. Finally, Cole et al (2013) find some evidence for a short-run increase in the productivity of damaged plants after the Kobe Earthquake, although they also report that this effect disappeared over time.
Aside from the channel through survived firms, there is another potentially important channel through which natural disasters may affect the corporate sector the selection, or exit, of firms due to the disasters. If natural disasters expel inefficient firms, or if natural selection is at work, then the average corporate productivity will increase. However, to the extent that efficient firms are also forced to exit, or an unnatural selection is at work, then the overall impact is unclear.
Compared to the effect of natural disasters on surviving firms, the empirical evidence on the firms’ post-disaster exits is scant. To fill this gap, a team of researchers including these authors examined the selection of firms in the form of bankruptcy after the Tohoku Earthquake in Japan that occurred on March 11, 2011. In the subsequent sections, we report our findings from this study.
Looking at a sample of firms located in the Tohoku area of Japan that we obtain from the database of Teikoku Databank ltd. (TDB). The TDB is a leading private credit bureau in Japan that covers a sufficient fraction of the firms in Japan. Our data contain rich information on the firms’ attributes, financial statements, and exits after the earthquake. We focus on bankruptcy as the type of firm exit, which is one of the most commonly observed types. To proxy for the firms’ efficiency, we use their ‘scores’ in the TDB. The TDB calculates these scores to evaluate the firms’ soundness of management, repayment ability, and creditworthiness as a safe trade counterpart from a third-party’s viewpoint. We also identify the firms whose headquarters were located inside the areas severely affected by the earthquake and create a dummy variable for such firms to represent damaged firms. Using these variables, we run profit model regressions for the firms’ bankruptcies and examine whether and how the working of the firms’ selection, the impact of their scores differs depending on the firms’ damage represented by their location.
Erikson (1976), Disasters involve considerable harm to the physical and social environment; they happen suddenly or are socially defined as having reached one or more acute stages; and something can be done to mitigate their effects before or after they happen quoted in Kreps, 1998. In other words, disasters involve a stochastic negative shock whose severity can be affected through a process of prevention and relief. It is precisely that process that we model.
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. Disasters have a devastating impact on development. Families lose homes, livelihoods and loved ones, communities lose businesses, jobs and services, children and particularly girl’s school and are at risk of early marriage the list of impacts goes on. Disasters can cancel progress on poverty reduction. This was certainly the experience in the Philippines, struck in 2009 by tropical storm Ondoy and typhoon Pepeng. Rizal, one of the provinces hit hardest, saw the poverty incidence almost double, from 5.5 per cent in 2006 to 9.5 per cent in 2009. Six years later, recovery was still far off, with 7.6 per cent of families still below the poverty line. Typhoon Haiyan, which hit one of the poorest areas of the Philippines, is likely to have a similar impact.
The drive for economic growth can expose countries to more risk cities can be engines of growth, but unplanned urbanisation exposes many people to risk. Flood destruction in parts of
Asia and Central America has been significantly exacerbated by major development new hotels, roads, and dams in fragile ecological systems. In this way, disasters can reveal the boundaries and limits to development.
The development challenge posed by disaster risks is starting to be recognised, with increasing reference to disasters across policy arenas, such as the Busan partnership on aid effectiveness, the Riot outcome document, the G20 agenda in 2012, an IPCC Special Report, the latest World Bank report on Managing Risk for Development and the recent UNFCCC decision to establish an international mechanism on loss and damage.
Whilst all countries suffer disasters, they have the greatest impact on poor countries. For example, 86 per cent of deaths from flooding occur in low or low-middle income countries, compared with ten per cent in upper middle and four per cent in high income countries. And whilst absolute financial losses are higher in developed countries, they take a deeper toll in developing countries the East Japan earthquake in 2011 was one of the most expensive disasters in history, costing around $200bn, equivalent to three per cent of Japan’s GDP the 2010 earthquake in Haiti is estimated to have cost $14bn, equivalent to 160 per cent of Haiti’s GDP.
The concept of leaving no one behind is a powerful one, and requires a focus on equality and specific investments for marginalised people.
Disaster risk is not shared equally between rich and poor. People are vulnerable because they are politically, socially or economically excluded, with little access to resources, influence, information or decision making.
Poverty and inequality often push people to live on the margins, in places that are risky, such as alongside rivers, floodplains, marginal land and hillsides. This perpetuates a vicious cycle of disaster, debt and destitution. According to Chen and Mark (2010), critical infrastructure is a series of complex system that involves production, Transportation, health, communication, safety and all the teams that is society needs to run. Now any destruction of this complex system or affect the overall economy as well as the working structure of the word. The potential sources of affecting the infrastructure can come from natural causes, technological causes or human origin causes. The disaster can also be triggered by a simple mistake which has a big consequence over the environment. And those risks can combine with each other to lead to an event complex situations where the consequences are even bigger. Natural reasons involve earthquakes, tsunamis, volcanic eruptions and other natural emissions including floods, hurricanes, tornadoes, storms and climate change. On the other hand, the technological list on infrastructure involves fire, explosion, pick toxic chemicals release and other mechanical explosions that can affect infrastructure.
The impact of floods, droughts, storms, on development
Droughts, floods, storms and other disasters triggered by climate change have risen in frequency and severity over the last three decades, increasing the damage caused to the agricultural sectors of many developing countries and putting them at risk of growing food insecurity, FAO warned in a new report released today ahead of the United Nations Climate Change Conference (COP 21) in Paris.
Worldwide, between 2003 and 2013 – the period analysed in the study – the average annual number of disasters caused by all types of natural hazards, including climate-related events, almost doubled since the 1980s. The total economic damage caused is estimated at $1.5 trillion.
Focusing specifically on the impact of climate-related disasters in developing countries, some 25 percent of the negative economic impacts were borne by the crop, livestock, fisheries and forestry sectors alone. In the case of drought, over 80 percent of the damage and losses affected the agriculture sector, especially livestock and crop production.
The FAO report is based on a review of 78 on the ground post disaster needs-assessments conducted in developing countries coupled with statistical analyses of production losses, changes in trade flows and agriculture sector growth associated with 140 medium and large scale disasters – defined as those affecting at least 250,000 people.
The report clearly demonstrates that natural hazards – particularly extreme weather events – regularly impact heavily on agriculture and hamper the eradication of hunger, poverty and the achievement of sustainable development.
The situation is likely to worsen unless measures are taken to strengthen the resilience of the agriculture sector and increase investments to boost food security and productivity and also curb the harmful effects of climate change.
This year alone, small-scale farmers, fisher folk, pastoralists and foresters from Myanmar to Guatemala and from Vanuatu to Malawi have seen their livelihoods eroded or erased by cyclones, droughts, floods and earthquakes. Note how the international community recently committed itself to achieving the Sustainable Development Goals and the Sendai Framework for Disaster Risk Reduction 2015-2030 and is expected to reach a climate change agreement at the COP 21. Measuring progress made in meeting these global targets will require accurate, up-to-date information, including on the impact of disasters.
National strategies for disaster risk reduction and climate change adaptation that support resilience must address the types of disasters with the greatest impact on the agriculture sector, the FAO Director-General said. He noted how sector-specific data on damage and losses are essential for effective policy and practice, and that the FAO study aims to contribute to national, regional and global efforts to develop comprehensive disaster data collection and monitoring systems.
Drought has an especially detrimental impact around 90 percent of production losses on agriculture in sub-Saharan Africa where the sector on average contributes to a quarter of GDP, rising to a half when agribusiness is included. At a conservative estimate, total crop and livestock production losses after major droughts were equivalent to more than $30 billion between 1991 and 2013 in the region.
Drought often has a major cascading effect on national economies as shown in Kenya where between 2008 and 2011 it caused significant losses in the food processing industry, particularly grain milling and coffee and tea processing.
Many Asian countries are particularly vulnerable to the impact of floods and storms. For example, crop production losses caused by the 2010 floods in Pakistan directly affected cotton ginning, rice processing and flour and sugar milling, while cotton and rice imports surged. In this case, some 50 percent of the $10 billion in total damages and losses fell on the agriculture sector.
Different disasters require different responses
Understanding the impact of different types of disasters is crucial to ensure that the most appropriate policies and practices are implemented.
Floods cause more than half of the total damage and loss to crops which are also very vulnerable to storms and drought. Around 85 percent of the damage caused to livestock is due to drought, while fisheries are overwhelmingly affected by tsunamis and storms such as hurricanes and cyclones. Most of the negative economic impact to forestry is caused by storms and floods.
Beyond production losses, the study shows how disasters can cause unemployment and erode incomes especially for small scale family farmers, thus threatening rural livelihoods. For instance, the 2010 floods in Pakistan affected 4.5 million workers, two-thirds of whom were employed in agriculture and over 70 percent of farmers lost more than half of their expected income.
Worldwide, the livelihoods of 2.5 billion people depend on agriculture, yet only 4.2 percent of total official development assistance was spent on agriculture between 2003 and 2012 – less than half the United Nations target of 10 percent. Investment in disaster risk reduction is extremely low: only around 0.4 percent of official development aid in 2010 and 2011.
FAO stresses that aid should better reflect the impact of disasters on the agriculture sector. Investments into disaster response and recovery should also build resilience to future shocks through risk reduction and management measures, particularly in countries facing recurrent disasters and where agriculture is a critical source of livelihoods, food and nutrition security, as well as a key driver of the economy.
Natural disasters have a greater impact on less economically developed countries than more developed countries.
In CAE, (2012) it is stated that states that, Natural disasters have always disastrous effects. These could be economic, social and/or environmental. Infrastructure damage can severely obstruct economic activity; social effects can include homelessness, illness, loss of life, injury, and destruction of communities; and environmental damage can range from the tree felling to landscape reshaping. While natural disaster can cause one or more of the aforementioned effects whichever country it impacts regardless of its economic situation.
According to Wills, (2009) generally, in some respects natural disasters may have a greater impact on more economically developed countries. For example, higher levels of infrastructure can be found in more economically developed countries, which is costly to mend if damage occurs. It may also be that although more economically developed counties are more able to cope with natural disasters than less economically developed countries, this ability is not uniform; for example, the earthquake in Northridge, California in 1994 was about 6.7. Although the Northridge earthquake is considered moderate in size, it caused over $20 billion of damage. This damage was due to the ground acceleration, which was one of the highest ever instrumentally recorded in an urban area in North America.