6th SAES - Presentation by Mia Mikic (UNESCAP, Bangkok) on Building Resilience to Natural Disaster and Major Economic Crises

7/29/2019 6th SAES - Presentation by Mia Mikic (UNESCAP, Bangkok) on Building Resilience to Natural Disaster and Major Economic Crises

1/19

Dr. Mia Miki

Chief/ ARTNeT Coordinator

Trade Policy and Analysis Section

TID, ESCAP

6th SEAS

Towards a Stronger, Dynamic & Inclusive South Asia2-4 September 2013, Colombo, Sri Lanka

Side Event

ESCAP Policy DialogueBuilding Resilience to Natural Disaster and Major

Economic Crises


2/19

Study is available fromwww.unescap.org/publications


3/19

Focus of this summary

What is resilience (to multiple shocks)?

Are Asia-Pacific economies resilient and why

does it matter?

What to do to build/improve resilience?


4/19

What is resilience?

The capacity of countries and their people towithstand, adapt to, and recover from naturaldisasters and major economic crisesand to

continue to lead the kind of lives they value.


5/19

Asia-Pacific faces multiple, overlapping/ sequential, and increasinglylarge shocksnew normal for the region

A woman digs out potatoes Tuesday in her former garden,ravaged by wildfires that also burned her house, in VerkhnyayaVereya village, Russia. Source: European Presphoto Agency

Aug. 29, 2012 photo, Unemployed educated Indian women stand ina queue to register themselves at the Employment Exchange Officein Allahabad, India. (AP Photo/Rajesh Kumar Singh)

A rescue worker carries an elderly resident across a surgingriver in New Bataan, Philippines, two days after TyphoonBopha hit the province. Photo: AFP

Lehman Brothers collapsed in September 2008. Some 6,000 of thebank's creditors are still waiting for payouts. Photograph: Linda Nyli ndfor the Guardian

A man with his child while escaping floods in Risalpur,Pakistan. http://newredindian.wordpress.com/2010/08/25/social-inequality-worsens-the-impact-of-the-floods-in-pakistan/

Traders frantically signal trades at the Chicago Mercantile Exchange.1999 file p hoto. REUTERS/Scott Olson

Flickr. All rights reserved by getolympus.
http://newredindian.files.wordpress.com/2010/08/pakistan-flood.jpghttp://socioecohistory.files.wordpress.com/2010/08/europe_drought_n_heat_wave_2010.jpghttp://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=jZ2b0YPwKE-88M&tbnid=U6S6Jemj__7-3M:&ved=0CAUQjRw&url=http%3A%2F%2Fmarketspace.thinktosustain.com%2F2012%2F11%2Fpushing-food-security-up-the-development-agenda%2F&ei=5wIrUYz5C-yfiAeUm4HoBQ&bvm=bv.42768644,d.bmk&psig=AFQjCNE_lzrpLtfqoIaXJd1lFTvLQLX-bA&ust=1361859672305371


6/19

The region faces increasingly complex shocks

Globe

Regions

Countries

Cities

Areas

Spatial

Decades

Annual

Seasonal

Daily

Rates, Durations

and frequencies

Temporal

Slow Long

Fast Short

Inter-

governmental

National

Localities

Administrations

Jurisdictional

Provincial

Globe

Regions

Countries

Cities

Areas

Spatial

Decades

Annual

Seasonal

Daily

Rates, Durations

and frequencies

Temporal

Slow Long

Fast Short

Inter-

governmental

National

Localities

Administrations

Jurisdictional

Provincial

Cross-scales and cross-levels Interactions

Cross-scales and cross-levels Interactions

Source: ESCAP based on Cash, David W., W. Neil Adger, Fikret Berkes, Po Garden, Louis Lebel, and Per Olsson (2006). Scale and Cross-Scale Dynamics: Governance andInformation in a Multilevel World. Ecology and Society 11 (2): 8.


7/19

- Asia-Pacific is

the mostdisaster proneregion in the

world

- and themost affected:

2 Mill killed

4x Africa

25x E, NASource: ESCAP based on data f rom EM-DAT, 2000-2012: The OFDA/CRED International Disaster Database

Disasters by region (1980-2011)

0

50

100

150

200

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Asia Pacific Africa

Latin America and Caribbean North America

Europe

People affected

Europe

North

America

Af rica

Latin America

and

Caribbean

Asia Pacific

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000

People affected (per 1,000 population)

North

America

Europe

Latin America

and

Caribbean

Af rica

Asia Pacific

00.10.20.30.40.50.6


8/19

- Economic losses

from disasters arerising globally

$293 billion in 2011

In Asia-Pacific

and low-incomecountries are themost affected

- Vulnerable groupsin particular in SriLanka 80% ofTsunami victimswere women

0

50

100

150

200

250

300

350

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Billion

do

llars2005

Economic damage Expon. (Economic damage)

China:

Drought

Japan: Great

East Japan

Earthquake

China:

Sichuan

EarthquakeTurkey:Earthquake

United

States:

KatrinaJapan: Kobe

Earthquake

Algeria: El

Asnam

Earthquake Iran: Manjil-

RudbarEart

hquake

Japan:

Chetsu

Earthquake

Spain:

Floods

Economic damage (%GDP) (2006-2010)

Low income

Lower middleincome

Upper middle

income

High income

0.0 0.2 0.4 0.6 0.8 1.0 1.2


9/19

Though Asia-Pacific has not been breedinggrounds for financial crises.

0

10

20

30

40

1971

1973

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2007

2009

2012

Asia-Pacific Other regions

Number of financial crises starting in a given year, period 1971-2012


10/19

The region has been hit hard

Growth rates of GDP and exports of Developing Asia-Pacific (percentage)

-30

-20

-10

0

10

20

30

2006 2007 2008 2009 2010 2011 2012 (p)

GDP exports services exports merchandise


11/19

1993

2010

World exports of merchandise goods

($ trillion)

0

2

4

6

8

10

12

14

16

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Capital goods Consumption goods Intermediate goods Other goods

-World has become

highly connectedthroughtrademoreexposed to tradeshocks

While the region hasdiversified

1. Increasing shareof trade is involatile parts &

components

2. Trading partnersbusiness cyclesare increasinglysynchronised

Source: ESCAP

Higher bilateral trade-value partners participating in 75% of globaltrade


12/19

Who is affected by economic crises and disasters?

- Poor and vulnerable are hardest hit

- They often experience multiple, repeated shocks from various sourcesall forms of

economic crisis, natural hazards, climate change impacts

- Each shock erodes the capacity to cope with the next shock

- Coping strategies may look resilient but could be detrimental to long term resilience

Evidence of resilience Evidence of vulnerability

Living off savings Cutting back basic consumption; fever and less nutritious meals

Internal migration for opportunities Cutting back essential nonfood consumption including soap and shampoo

Adapting business strategies Forgoing health care; switching to traditional healers

Cutting back nonessential spending; delaying large purchases Sale of assets needed for livelihood

Extending working hours Accumulation of unserviceable debtsWorking more jobs School dropouts; child labor; switching from private to public schools

Striving to keep kids in school High-risk income-generating activities

Returning to education or training Depletion or breakdown of community support mechanisms

Communal meals Theft; crime; drug selling

Mutual support groups; support from family and friends Divorce and abandonment

Saving-credit groups Increased alcohol and drug use

Lower resilience to other shocks


13/19

The New NormalThe world faces multiple, simultaneous, sequential and

increasingly large shocks.

Are we ready?


14/19

Is the region ready to face multipleshocks?

More often response is ad hoc and after the shock

Blind spots of policymakingdifficulties in internalizing risks

Cognitive failures: underestimate probability of relatively commonrisks; overestimate the knowledge of things you have no expertise

in; fail to consider risks to future generations

Tendency to treat problems in isolationthough multiple shocks

call for multi-sectoral solutions, systems thinking

Risk management requires more knowledge and new decision

makingtoolsscenario analysis, vulnerability identification,

participatory approaches to decision-making


15/19

Key policy messages

-Macroeconomic frameworks need to factor in disasters; build the capacity tohandle overlapping shocks

- Overarching goal should to be arrest the spread of a shock to the real economy,labour markets, and poor and vulnerable populations

- Macro stabilization should be interpreted flexibly during shocks

- Balance between short-term macro stability and long-term development

--Social policy should build on good coping strategies and minimize bad coping

strategies

- Universal social protection floor ++ approach

- social safety nets in place before a shock; be flexible to accommodate multipleshocks

- Governance is crucial: rethinking fiscal decentralization; strengthening localgovernance and participatory approaches to decision-making


16/19

Key policy messages: protect critical sectors and supplychains

-Integrated approach to addressing land-water-energy nexus within the context ofclimate adaptation

- Stakeholder involvement in decision making

- Adaptive governanceknowledge, experience, flexibility to be integrated into policy,institutions

--Identify critical infrastructure; integrate DRR into infrastructure projects (in high riskareas); capitalize on resilient land use planning

-Firms, governments both have responsibilities to protect supply chains

- Much needed capacity building for business continuity planning

- Risk transfer tools

- PPP support for disaster preparedness

Awareness building, Pricing, Regulation, Application of technology play crucial rolesto address the lack of knowledge, lack of understanding and internalising of risks,much to learn from each other


17/19

Key policy messagesRegional cooperation is of strategicimportance

Regional policy coordination--regional coordination ofmacroeconomic policies, and financial sector policy

Regional pooling of resources and systems for effective

monitoring and early warning

Regional pooling of risks

Bridging cross-regional cooperative mechanisms andinitiatives

Reducing risks and uncertainties through exchange of data

and information regionally


18/19

Building Resilience

The capacity of countries and

their people to withstand, adapt

to, and recover from naturaldisasters and major economic

crises so that their people can

continue to lead the kind of

lives they value.

Regional Cooperation

Community Resilience

Land, Water, Energy

CriticalInfrastructure

FinancialCooperation

Supply

ChainsEconomics of

Resilience


19/19

Thank you

ounce of prevention is worth a pound of cure

Failure to prevent and mitigate risks has tragic and costly

consequencesboth for crises and disasters

Documents

6th SAES - Presentation by Mia Mikic (UNESCAP, Bangkok) on Building Resilience to Natural Disaster and Major Economic Crises