Real Risk

not mention disaster. Similarly, of the 59 Poverty Reduction

Strategy Papers prepared to date, only nine have incorporated

aspects of hazard risk management. At the project level,

economic analyses rarely consider the risk of disaster, even

though 176 bank projects have been interupted by disaster

during implementation.

Because most natural disasters are foreseeable to the extent

that it is possible to predict generally where an event is likely

to occur at some time in the near future, human and financial

risks should be calculated in advance, and donor policy and

practices need to provide a supportive framework for such an

approach. In terms of strategic thinking and policy formula-

tion, the World Bank and others can therefore go beyond

acknowledging the general existence of natural disasters and

identify with relative precision the geographic ‘hotspots’ –

countries most vulnerable to natural disasters – anticipate fore-

seeable risks, and encourage borrowing targeted at reducing

risks, in line with these calculations ahead of the disaster event.

Careful long-term planning

Although the destructive impacts of disasters are tightly

connected with development, disasters are typically treated as

an interruption in development rather than risks that should

be a calculated part of development plans. Some countries are

even in a near-permanent state of recovery. Donors are often

funding post-disaster relief and recovery, rather than lending

for long-term development that takes into account disaster

risks. The Danish International Development Agency notes

that European long-term development assistance in Africa fell

by 20 per cent from 1994 to 1999, while emergency assistance

increased sharply. European humanitarian aid in the second

half of the 1990s was ten times that provided in the second

half of the 1980s.

But the incentives to engage in disaster response far

outweigh those of prevention – major political gains come

from the visibility of crisis response, while successful preven-

tion is invisible. Likewise, other pressing development

priorities often take precedence over mitigation, prevention,

and disaster risk management.

This thinking is costly. Studies show that USD1 spent on

prevention can save at least USD5 to USD8 on damage, and

sometimes up to USD40 on damage. Many countries have seen

risk mitigation as a cost rather than a benefit. Following floods

and landslides in 1998, Tajikistan found it too costly in the

short term to take the extra time needed to rebuild in a way

that would prevent the same disaster occurring again. But if in

the case of financial systems we are ready to spend more funds

on establishing mechanisms to avoid financial crisis, then we

need to do the same with disasters. Leaving choices only to

people’s preference or to the market is sometimes insufficient,

and a combination of cost-benefit analysis of mitigation

measures, financing incentives for mitigation, and regulation

is needed to ensure that risk mitigation is not neglected.

Reconstruction requires careful planning to ensure that a

similar disaster in the future would not result in a similar level

of suffering. Cleaning up damage and rebuilding structures

without addressing the human actions that repeatedly turn

recurring natural phenomena into disasters only ensures that

the inevitable next event will be as disastrous as the last.

For example, where environmental degradation turns

seasonal events into disaster, environmental restoration needs

to be part of the solution and part of ongoing development

plans. In other places, increased attention to infrastructure

and settlement design would increase disaster resilience.

Effective activities that address root causes of vulnerability and

mitigate the potential for future damage are key to reducing the

erosion of development gains that natural disasters represent.

Poor construction quality is a major reason for high mortal-

ity rates in developing countries stricken by disaster. Small

changes in building materials and design can save thousands

of lives

or put them at greater risk. Among the things that

would contribute to an improvement are: development of build-

ing codes, enforcement of construction standards, improved

procurement practices, and strengthened land use planning.

Quick response comes from emergency management

preparedness

Once a disaster strikes, a swift and effective response is vital

for both immediate relief and long-term recovery. Even devel-

oped countries that are ill-prepared can find themselves

floundering after a disaster. The Gulf Coast of the United States

suffered greatly after Hurricane Katrina because the response

capacity of the US Federal Emergency Management Agency

had been eroded by poor leadership and funding cuts. In

developing countries, where such agencies might not exist,

governments are overloaded after a major natural disaster, and

international response often lacks coordination.

The reconstruction process, if poorly initiated, has been

shown to seriously compromise long-term recovery. Early

warning systems, such as transponders in flood-prone rivers,

tsunami alerts, and better cyclone tracking devices can save

lives and property, but alone they are not enough. Countries

preparing to respond to natural disasters – especially those

in the medium- to high-risk category – need to have proce-

dures and systems in place to deal with disasters.

The importance of such organization can be seen in the

progress made in Bangladesh. Following a deadly cyclone in

1970 that took 500,000 lives, the Government created an alert

system involving radio communication and a village-based

volunteer system. The volunteers were trained to warn villagers,

rescue and evacuate them. In 1991 when a cyclone with even

higher wind speeds hit, fewer lives (140,000) were lost and

350,000 people were evacuated. After continued emergency

management development, a similar cyclone hit in 1997 – only

200 people perished and 1 million were successfully evacuated.

Cash transfers have proven to be swift and effective in aiding

recovery. They are quick to dispense and allow affected fami-

lies to spend on items they need. In-kind support, typically

unconnected to needs analysis, often goes unused or clogs up

critical facilities such as ports, warehouses, and paralyses

transport. It also consumes considerable management atten-

tion. Cash transfers allow self-assessment of need and help

protect productive assets and land that would otherwise have

to be sold off. They also permit families to stay together as the

wage earners are less likely to migrate in search of work,

leaving families behind. Cash transfers also regenerate the local

economy as the market tries to meet local demand and allow

reconstruction at costs much lower than the authorities could

provide. The chief difficulty with cash transfers is in finding or

designing delivery mechanisms that avoid corruption and

ensure that cash goes to the intended beneficiaries.

Involving local communities for lasting recovery

Natural disasters destroy more than lives and infrastructure;

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