Disasters seem to have taken on an unprecedented scale in recent years, from major terrorist attacks to natural disasters, like the recent earthquakes in Iran and Morocco. But, says Lessons Learned from Large-Scale Disasters, today governments should be ready to deal more efficiently with the less obvious ramifications, such as uninsured losses, closed schools and businesses, medical costs, damaged transport infrastructure and labour problems.
Apart from immediate clean-up, relief and recovery operations, the ripple effects of a disaster may produce such indirect costs as higher insurance premiums, social security costs linked to death and disability benefits, tax deferrals/losses for businesses, plus the cost of measures to prevent such an accident from repeating itself.
These costs mount up. Take the impact of 9/11. The economic loss is estimated at US$120 billion, according to Lessons Learned from Large-Scale Disasters. The destruction damage alone accounted for approximately $16 billion and some 200,000 jobs were lost or relocated. Business and consumer confidence plummeted.
Natural disasters have had huge tolls too. The earthquakes in Marmara cost around $20 billion, roughly 9%-10% of Turkey’s GDP, with damages to buildings and infrastructure tallying up to $10.2 billion. Huge costs like these can be reduced by being prepared, but this cannot simply consist of guidelines and procedures. Immediate decisions usually have to be made on the basis of incomplete information, in a context of utmost urgency, and with considerable human, economic and political stakes.
A large-scale disaster, by definition, removes familiar landmarks and is disorienting. Lessons Learned from Large-Scale Disasters emphasises the importance of quick communication from reliable sources, as well as risksharing coverage, possibly even at international level.
By definition, no one can successfully predict disasters of such magnitude, but Lessons Learned from Large-Scale Disasters insists that governments can and must be better prepared to mitigate their economic and social impacts.
©OECD Observer No 242, March 2004
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