Monday 23 April 2018

The €2.6 trillion toll of Asian misery rises with quake

A Nepalese man walks through destruction caused the earthquake (AP)

Rina Chandran and John Mulligan

The devastating earthquake in Nepal over the weekend has killed almost 4,000 people and left tens of thousands homeless.

Its impact on the mountain kingdom's economy is likely to be severe, with near-term growth set to contract without international aid.

Nepal is one of Asia's poorest countries, and the US Geological Survey initially estimated economic losses from the earthquake at 9pc to 50pc of its gross domestic product, with a best guess of 35pc.

According to the UN, the Asia-Pacific region is the world's most disaster-prone.

The economic impact of nature's wrath is big: between 1970 and 2013, over $2.8 trillion (€2.6 trillion) in economic losses were reported globally from natural disasters, with Asia and the Pacific alone reporting $1.15 trillion (€1 trillion) of that total, according to the United Nations Economic and Social Commission for Asia and the Pacific.

The share of Asia and the Pacific in the global total has shown an increasing trend, reaching half of global economic losses in recent years, said the agency.

The economic loss not only includes the damage to infrastructure, commercial and private property, but also the impact that destruction of factories and offices can have through resulting redundancies and business closures.

While the economic cost of natural disasters anywhere is hard to calculate, it's clear that some of the biggest natural shocks to the region in the past few years gave had significant economic impact.

In May 2008, the strongest quake to hit China since 1950 struck the Sichuan province, with over 87,000 people reported killed or missing.

It was one of the most devastating earthquakes ever recorded. It was estimated that $135bn (€124bn) was spent rebuilding affected areas.

Japan's Tohoku earthquake and subsequent tsunami of 2011 left almost 19,000 people dead or missing and hundreds of thousands more homeless.

The World Bank's estimated economic cost of the disaster was $235bn (€217bn), while catastrophe database CATDAT reckons the combined economic cost, including up to $290bn due to the earthquake, $258bn as a result of the tsunami and $162bn because of the nuclear power plant meltdown, brought the total to between $479bn and $710bn (€442bn to €655bn).

Persistent severe flooding in Thailand in 2011 wreaked havoc on the country. The floods killed more than 800 people and resulted in thousands of factories being closed, causing disruptions to global supply chains for months.

The Haiyan super-typhoon that struck Philippines in November 2013 killed more than 6,000 people. Economic losses from the disaster were estimated at between $12bn and $15bn (€11bn to €14bn), or about 5pc of economic output in the island nation. In Nepal, rebuilding costs could "easily exceed" $5bn (€4.6bn), US information and research group IHS estimates.


Irish Independent

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