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Global Assessment Report on Disaster Risk Reduction 2013
From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction |
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Global Assessment Report on Disaster Risk Reduction 2013
From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction |
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insurance coverage. In contrast, informal sector producers and small and medium enterprises are more likely to be located in hazardous areas and less likely to have invested in protective risk-reducing schemes. A single disaster may wipe out all or a large part of these businesses’ capital; and only a small percentage have insurance coverage.
Disasters undermine longer-term competitiveness and sustainability
Some businesses never recover from disaster. The wider impacts can linger for years, undermining longer-term competitiveness and sustainability. Market share may be lost as clients transfer their business to competitors; skilled workers move or find other jobs; relationships with suppliers and retailers are severed; and business image and reputation may be permanently damaged. For example, before the 1995 earthquake, the port of Kobe was the world’s sixth busiest. Despite a massive investment in reconstruction and efforts to improve competitiveness by 2010 it had fallen to 47th place.6 When business leaves, it may never return.
New disaster data provides a more complete picture of losses
“One trillion dollars have been lost in the last decade due to disasters and one million people killed”.9 Such statements are familiar to investors and business developers. But they only partially reflect total disaster losses. A growing number of national disaster databases now provide access to detailed data on these losses. When combined with assessments of direct losses in major disasters as recorded by EMDAT10 , these data provide a more complete picture of the real dimension of direct disaster losses. Figure 2 shows what this picture might look like in the 40 low and middle-income countries with the largest losses recorded in national disaster databases.
Direct disaster losses are at least 50 percent higher than internationally reported figures
Between 1981 and 2011, total direct losses in these countries were approximately US$305 billion, of which internationally reported events represent
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