In this century alone, disasters killed approximately 1.2 million people and affected 2.9 billion people, almost half the world’s population. Furthermore, disaster risks continue to grow every day due to population growth, poverty, weak governance, rapid and unplanned urbanization—especially in hazard-prone areas, climate change, and a general lack of awareness on disaster risks and losses.
The United Nations Office for Disaster Risk Reduction (UNISDR)’s third Global Assessment Report (GAR13) was launched this month in the U.S., revealing how transformation of the global economy over the past few decades has led to an increase in disaster risks globally. The report, ‘From Shared Risk to Shared Value: The Business Case for Disaster Risk Reduction,’ highlights disaster losses in the past and also explores potential future disaster losses in business-as-usual scenarios.
Direct economic losses from disasters during this century—including the 2011 Japan earthquake and tsunami —are estimated at $2.5 trillion. Photo credit: Master Sgt. Jeremy Lock/U.S. Air Force
USAID’s Office of U.S. Foreign Disaster Assistance (USAID/OFDA) seeks to save lives and alleviate suffering caused by disasters overseas—and significant progress has been made so far. However, challenges remain in mitigating the economic impacts of disasters and building resilience in communities and countries, a goal USAID/OFDA works toward and the reason why the Office lends support to the GAR13’s research and findings.
Recent major disasters, including the 2011 earthquake in Japan, the 2011 floods in Thailand, and last year’s Hurricane Sandy in the U.S., showcased how truly devastating disasters can be to businesses. Direct economic losses from this century are estimated at $2.5 trillion, a figure that is largely underestimated.
However, indirect losses are even worse. For example, if a factory is destroyed by an earthquake and forced to close for a few months, not only is its output stalled but its workers also lose precious time while out of much needed work. If a flash flood demolishes a bridge, both small and large businesses are affected. A small local farm may become isolated, for example, preventing it from delivering its goods. This in turn will disrupt the supply chain for larger corporations. Even businesses in safe locations can be affected by disasters that impact their counterparts and suppliers in other parts of the world.
It is clear that the benefits of disaster risk reduction efforts extend to businesses as well as affected individuals, and that incorporating the private sector into the process of reducing disaster risks in hazard-prone communities is necessary in today’s world. Disasters don’t recognize boundaries, and USAID/OFDA will continue to search for opportunities to engage the international community—including the private sector, public sector, our partners, and the people we seek to help—as we strive to save lives, alleviate suffering, and mitigate the economic and social impacts of future disasters.
