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Poverty and inequality

Poverty is both a driver and consequence of disasters, and the processes that further disaster risk related poverty are permeated with inequality

Socio-economic inequality is likely to continue to increase and with it disaster risk for those countries, communities, households and businesses that have only limited opportunities to manage their risks and strengthen their resilience. The geography of inequality expresses itself at all scales: between regions and countries, within countries and inside cities and localities (UNISDR, 2015a).

Vulnerability is not simply about poverty, but extensive research over the past 30 years has revealed that it is generally the poor who tend to suffer worst from disasters (DFID, 2004; Twigg, 2004; Wisner et al., 2004; UNISDR, 2009b). Impoverished people are more likely to live in hazard-exposed areas and are less able to invest in risk-reducing measures. The lack of access to insurance and social protection means that people in poverty are often forced to use their already limited assets to buffer disaster losses, which drives them into further poverty. Poverty is therefore both a cause and consequence of disaster risk (Wisner et al., 2004), particularly extensive risk, with drought being the hazard most closely associated with poverty (Shepard et al., 2013). The impact of disasters on the poor can, in addition to loss of life, injury and damage, cause a total loss of livelihoods, displacement, poor health, food insecurity, among other consequences.

Climate change and exposure to natural hazards threaten to derail international efforts to eradicate poverty by 2030 (Shepard et al., 2013).

The disaster-risk poverty nexus UNISDR (2015a)

Research suggests that disasters cause impoverishment, which can lead to a cycle of losses, poverty traps and a slowing of efforts to reduce poverty. However, not every disaster leads to such negative long-term impacts and recovery can be relatively quick in some countries compared to others – with notable differences between and among different socio-economic groups (Shepard et al., 2013).

The richest 2% of the world’s adult population now own over 50% of global wealth (Davies et al., 2012), whereas the bottom 50% own less than 1% of global wealth (Credit Suisse, 2013; UNISDR, 2015b).

While absolute losses tend to be higher amongst wealthier groups, the relative impact of disasters on low-income households is far greater. Take the example of Hurricane Mitch - in 1998, which destroyed over a quarter of the household implements, tools or animals of the wealthiest 20% of households but only a tenth in the case of the poorest 20% of households. However, because the poorest households had so little to start with, the impact of their losses was more severe. The poorest group lost nearly 18% of their pre-Mitch asset value and 40% of their total crop value, compared to just 3% and 25% respectively for the wealthiest group (UNISDR, 2009b).

Disaster risks in rural areas may be particularly invisible, given the low density of produced capital and declining population (UNISDR, 2013). Poor rural livelihoods are highly exposed and vulnerable to weather-related hazards and have a low resilience to loss because they have little or no surplus capacity to absorb crop or livestock income losses and to recover. Even a small loss might feedback into further poverty and future vulnerability (UNISDR, 2009b).

Poverty and disaster risk are also pervasive in urban areas. Generally, poor urban households derive most or all their income from work in the informal economy, meaning that precise figures on urban poverty are lacking (UNISDR, 2009b). Housing is usually the principal economic asset of poor urban households, providing not only shelter and personal security, but also often their livelihood. Damage or loss to housing, together with essential domestic possessions, therefore, places enormous strain on household economies, given the high monetary cost of replacing lost assets, relative to low and irregular incomes, and the absence of insurance or safety nets (UNISDR, 2009a). Urban poverty is now understood to have many additional dimensions - including ‘voicelessness’ and ‘powerlessness’, and inadequate provision of infrastructure and basic services. Most of the immediate causes of the deprivations associated with urban poverty are risk related. (Tacoli et al., 2015).

Inequality is not just about the unequal distribution of income.

Disaster risk is shaped by a range of social and economic factors that determine entitlements and capabilities (Shepherd et al., 2013). Access to services, political voice, and social and economic status directly affect disaster risk and resilience (Satterthwaite and Mitlin, 2014). Key factors in underprivileged areas include low-quality and insecure housing, which in turn limits access to basic services such as health care, public transport, communications, and infrastructure such as water, sanitation, drainage and roads (Satterthwaite and Mitlin, 2014). Higher mortality and morbidity rates among children, the elderly and women are directly linked to these different poverty factors (see UNISDR, 2015a for examples).

The world is nearing what can be considered absolute levels of inequality (UNISDR, 2015b).

Inequality facilities the transfer of disaster risks from those who benefit from risk taking to those who bear the cost, through ineffective accountability and increased corruption (see UNISDR, 2015a for examples). Inequality is linked to other risk drivers, since it redistributes disaster risk through uneven economic development, segregated urban development, climate change and the overconsumption of resources (UNISDR, 2015a). If inequality continues to rise, it may become a destabilising global force that manifests not only in increasing disaster risk but also in decreasing capacities to manage those risks (UNISDR, 2015a).

STORY

Poverty underpins vulnerability in the Philippines

Philippines

Poverty is the single most important factor in determining disaster vulnerability in the Philippines. In 2009, the country was hit by tropical storm Ondoy and typhoon Pepeng in quick succession. Of the 9.3 million people severely affected by these two hazards, the poor were affected disproportionately.

SOURCE: Shepard et al. (2013)

TREND

Predicted poverty levels in hazard-prone countries in 2030

Projected poverty levels in 2030 in countries ranking highest on the multi-hazard (earthquakes, cyclones, droughts, extreme heat and floods) index © Shepard et al. (2013)

Global

Climate change and exposure to natural hazards threaten to derail international efforts to eradicate poverty by 2030.

SOURCE: Shepard et al. (2013)

Opportunities for building resilience

Poverty and inequality drive vulnerability, but even the vulnerable have some capacities to cope with disasters (Wisner, et al., 2012). Strengthening these capacities, so long as they address needs and disaster risk in the long-term, and not simply the short-term, can enable communities to recover from disasters. By enhancing resilience, households and society can also prosper in the face of disasters, breaking the cycle of disasters creating and being driven by poverty.

Strengthening livelihoods and increasing resilience is therefore critical to reducing both disaster risk and poverty. In rural areas, livelihoods are particularly sensitive and vulnerable to weather fluctuations and extremes (UNISDR, 2009b). The urban informal economy is growing, providing livelihoods for millions of people and with it environmental pressures – so how it evolves will be critical in transitioning to a more resilient economy (Brown et al., 2014). Building resilience in the urban informal economy is about working with and not against the urban poor, improving the formal regulatory systems and the operations of the informal economy (Brown et al., 2014).

Livelihood strengthening can have many dimensions, including:

Infrastructure development and basic services provision

E.g. watershed management, drought proofing, flood risk management, rainwater harvesting, cash for public works, construction of irrigation systems, canals, roads, disaster recovery and reconstruction, etc.

Natural resource management

E.g. agroforestry, sensitive irrigation, watershed restoration, etc.

Social assistance and protection

E.g. livelihood guarantee schemes, cash transfers, subsidies for public services, etc.

Livelihoods diversification

E.g. alternative sources of income that are resilient to different hazards. etc.

Strengthening livelihoods is about building human, social, political, physical, financial and natural assets. Assets perform two key functions: (1) they build capacity through better access to resources, (e.g. education leading to a better paid job) and (2) they reduce vulnerability by acting as the buffer between people and hazards and other shocks and stresses (Sanderson, 2012). Access to the resources people need to build assets is hindered by inequality owing to gender, age, disability or ethnicity based discrimination and legal and illegal control of assets (Sanderson, 2012). For instance, women are more prevalent in the low and unpaid segments of the urban informal economy (Brown et al., 2014).

Households with more assets are less vulnerable because assets provide buffers against disaster loss. For instance the opportunity to sell animals if a harvest fails. However, intensive disasters may destroy all assets, reducing the value of these asset buffers. Similarly, the coping strategies poor households may select (faced with scarcity) include overgrazing, deforestation or unsustainable extraction of water resources. While these provide food and income in the short-term, in the long-term these activities intensify hazards and drive disaster risk (UNISDR, 2009b). When microfinance schemes and social protection are available, households are less likely to adopt damaging coping capacities (UNISDR, 2009b).

Social protection programs are public interventions aimed at supporting the poor and more vulnerable members of society, as well as helping individuals, families, and communities manage risk (Arnold and de Cosmo, 2014). Social protection includes safety nets (social assistance and non-contributory transfers such as cash transfers, school feeding, targeted food assistance and subsidies), and social insurance (such as old-age, survivorship, disability pensions, and unemployment insurance). Many governments and development agencies invest in social protection programs to address poverty reduction goals (Arnold and de Cosmo, 2014) and, more recently, disaster risk reduction.

Social protection has four basic approaches (Arnold and de Cosmo, 2014):

  • Protective measures to provide relief;
  • Preventive measures to avoid damaging coping strategies;
  • Promotive measures to enhance resilience; and,
  • Transformative measures to combat discrimination underlying social and political vulnerability (Davies et al., 2008).

Many countries have made substantial gains in poverty reduction and development goals, which have been linked with a reduction in disaster related mortality. Furthermore, during the Hyogo Framework for Action monitoring period (2005 to 2015), food and social welfare sectors have made considerable progress in addressing poverty and inequality - food security is improving in many regions, and social protection coverage is increasing (UNISDR, 2015b). However, the ability to invest in social protection remains limited in many countries, with stark differences in the capacity of local governments to meet the needs of citizens (UNISDR, 2015a).

TREND

Progress in poverty reduction

"Progress in selected human development indicators in Bangladesh" © UNISDR with data from the World Bank (UNISDR, 2015a [GAR15])

Bangladesh

In general, those countries that have managed to reduce disaster mortality significantly have also managed to enhance disaster management within a broader context of improving development indicators.

SOURCE: UNISDR (2015a) [GAR15]

STORY

Livelihood initiative helps poor women build community resilience

A member of the ‘Sekandikudyele’ group with a juice extracting machine © Tearfund

Malawi

Micro and medium-scale enterprises were developed during the project in order diversify the livelihoods of poor women in an area where the main livelihood – agriculture - is frequently hampered by droughts.

SOURCE: Adapted from Tearfund (In partnership with River of Life Relief and Development - ROLDD) in UNISDR (2008)

STORY

Social protection and poverty reduction to strengthen resilience to natural hazards in Bangladesh

Bangladesh

Bangladesh’s Chars Livelihoods Programme (CLP) is a large regional social protection and poverty reduction program which aims to secure and promote livelihoods opportunities while at the same time strengthening the resilience of its target population to natural shocks and climate variability.

SOURCE: World Bank (2013)

Related

Components of Risk

Disaster Risk
Risk is a forward looking concept, so disaster risk can be understood as the likelihood (or probability) of loss of life, injury or destruction and damage from a disaster in a given period of time (adapted from UNISDR, 2015a).
Hazard
A dangerous event that may cause loss of life, injury or other health impacts, as well as damage and loss to property, infrastructure, livelihoods and services, social and economic disruption and, or environmental damage is known as a hazard (UNISDR, 2009b).
Exposure
The presence and number of people, property, livelihoods, systems or other elements in hazard areas (and so thereby subject to potential losses) is known as exposure (UNISDR, 2009b and IPCC, 2012).
Vulnerability
The name given to the set of characteristics and circumstances of a community, system or asset that make it susceptible to the damaging effects of a hazard is vulnerability.

Risk Drivers

Climate change
Climate change can increase disaster risk in a variety of ways – by altering the frequency and intensity of hazard events, affecting vulnerability to hazards, and changing exposure patterns.
Environmental degradation
Environmental degradation is both a driver and consequence of disasters, reducing the capacity of the environment to meet social and ecological needs.
Globalized economic development
Globalized economic development can lead to increased exposure of assets in hazard-prone areas, leading to further increases in intensive risk if not managed.
Poverty & inequality
Poverty is both a driver and consequence of disasters, and the processes that further disaster risk related poverty are permeated with inequality
Poorly planned urban development
Whether or not disaster risk is factored into investment decisions in urban development will have a decisive influence on the future of disaster risk reduction.
Weak governance
Governance of disaster risk management must be improved, not only through specialized and stand-alone sectors, but also through strengthened governance arrangements across sectors and territories in order to address disaster risk.

Key Concepts

Capacity
Capacity refers to all the strengths, attributes and resources available within a community, organization or society that can be used to achieve agreed goals.
Deterministic & probabilistic risk
Deterministic risk considers the impact of a single risk scenario, whereas probabilistic risk considers all possible scenarios, their likelihood and associated impacts
Direct & indirect losses
Direct disaster losses refer to the number of people killed and the damage to buildings, infrastructure and natural resources. Indirect disaster losses include declines in output or revenue and generally arise from disruptions to the flow of goods and services.
Disaster risk reduction & disaster risk management
DRR is the policy objective of anticipating and reducing risk. Although often used interchangeably with DRR, DRM can be thought of as DRR implementation, since it describes the actions that aim to achieve the objective of reducing risk.
Intensive & extensive risk
Extensive risk is used to describe the risk of low-severity, high-frequency disasters, mainly but not exclusively associated with highly localized hazards. Intensive risk is used to describe the risk of high-severity, mid to low-frequency disasters, mainly associated with major hazards.
Resilience
Resilience refers to the ability of a system, community or society exposed to hazards to resist, absorb, accommodate to and recover from the effects of a hazard in a timely and efficient manner.
Sovereign risk
Sovereign risk is the economic impact a government would face in the event of a disaster.

Models

Risk modeling
We need data on hazard, exposure, vulnerability and losses in order to understand and assess disaster risk.

Datasets

Datasets
Data and statistics are important in understanding the impacts and costs of disasters.
Data Viewers
Open access, online data viewers present hazard, disaster, and risk data in an easily accessible manner.

EDITED 12 NOV 2015 BY: PREVENTIONWEB EDITOR