The cost of catastrophes


Hurricanes, droughts, floods and other natural disasters cost over 520 billion dollars each year and create 26 million new poor. This was stated by the World Bank in a study released yesterday that analyzes the impact of cataclysms on the world economy.

According to the experts of the institute the consequences of extreme weather conditions are much more serious than has always been thought.

How much does it cost me? The research analyzed the impacts of cataclysms on 117 countries and measured the impact on the well-being of the population in terms of consumption capacity.

Natural disasters mainly affect the poorest part of the population, the one that has the least chance of reacting, and cause a contraction in consumption estimated at around 520 billion dollars. An enormous figure, comparable to the GDP of Belgium and 60% higher than what was believed until today.

Cyclone Nargis, for example, which hit Myanmar in 2008, forced half of the country's farmers to sell their land to cover the debts and losses caused by the cataclysm. The impacts of Nargis will weigh on the population of Myanmar for generations.

Financial prevention and more. The research highlights for the first time the positive effects that prevention policies could have: anti-seismic buildings, insurance policies, early warning systems could reduce the economic consequences of natural disasters by 20%.

"Nations are facing an ever-increasing number of economic shocks caused by climate change, " explains Stephane Hallegatte, economist at the Global Facility for Disaster Reduction and Recovery who led the research. "The poorest need social and financial protection from these events that can no longer be postponed"
And indeed several countries, for example Kenya and Pakistan, are working to implement aid programs that support populations affected by drought or floods: in Pakistan alone the economic interventions that followed the 2010 floods saved 8 million people from poverty.