Charlotte Benson

Understanding the Economic and Financial Impacts of Natural Disasters

The study described here examines the short- and long-term economic, and financial impacts of natural disasters. It relies in part, on in-depth case studies of overall sensitivity to natural hazards in the small island economy of Dominica; public finance consequences of disasters in Bangladesh; and, the economic consequences of climatic variability, and the use of climatic forecasting in Malawi and southern Africa. Policy implications are drawn, and, where appropriate, recommendations are made. Finally, directions for future research, and cooperation are outlined. Major natural disasters can, and do have severe negativeshort-run economic impacts, and also appear to have adverse longer-term consequences for economic growth, development, and poverty reduction. But negative impacts are not inevitable. A full reassessment of the economic, and financial impacts of a major disaster, should be made 18 to 24 months after the event. It should be taken into account in reviewing the affected countrys short-term economic performance, and the assistance strategy for the country. Vulnerability to natural hazards is determined by a complex, dynamic set of influences that include the countrys economic structure, stage of development, and prevailing economic and policy conditions. The eclectic approach adopted in this study, which employed largely qualitative methods, is particularly useful in exploring the many complex, and dynamic pathways through which extreme hazard events influence an economy, and its financial system, as well as for identifying areas, and issues where further investigation, including quantification, would be worthwhile.

The Impact of Drought on Sub-Saharan African Economies. A Preliminary Examination

This paper arose out of interest in the broader implications of droughts in African countries and in particular, the droughts of Southern Africa in the mid-1990s. Although the physical aspects and agricultural impacts of drought and government and donor response as well as household coping and survival strategies in the event of drought have been well studied, little research has occurred on either its nonagricultural or economy-wide macroeconomic impacts in Sub-Saharan Africa. This paper has developed a new framework to understand the wider economic impacts of drought and explain why some economies are more susceptible to drought than others. Findings include the following: (a) Drought shocks have large but highly differentiated economy-wide impacts; (b) Counterintuitively, relatively more developed economies in Africa may be more vulnerable to drought shocks; (c) Different regions of Africa are experiencing different long-term climatic trends; (d) Structural adjustment programs can also provide a framework the broader economy-wide impacts may be more effectively contained; and (e) There has been typically little sustained interest in drought mitigation measures except in terms of improving food security.

NGO Initiatives in Risk Reduction: An Overview

NGOs appear to be well placed to play a significant role in natural disaster mitigation and preparedness (DMP), working, as they do, with poorer and marginalised groups in society. However, there is little information on the scale or nature of NGO DMP activities. This paper reports the findings of a study seeking to address that gap. It confirms that NGOs are involved in a diverse range of DMP activities but that a number of them are not labelled as such. Moreover, evidence of the demonstrable quality and benefits of DMP involvement is poor. The paper concludes that a number of problems need to be overcome before DMP can be satisfactorily mainstreamed into NGO development and post-disaster rehabilitation programmes. However, there are some early indications of momentum for change.

Additionality or diversion? food aid to Eastern Europe and the former Soviet Republics and the implications for developing countries

Abstract Substantial flows of assistance to Eastern Europe and the former Soviet republics (FSRs) since 1989 have coincided with stagnating flows of official development assistance to developing countries, raising concerns about the possible diversion of resources to the former from the latter. These concerns are examined empirically for food aid, which formed an important component of initial assistance to the region of Eastern Europe and the FSR, using a supply-based predictor model. Measuring diversion in terms of the difference between actual and forecast levels of food aid flows, the model indicates that European Union (EU) food aid, including Commission and Member State actions, largely involved additional resources. There was however, progressively greater diversion of US food aid from developing countries. The findings are supported by a qualitative examination of the budgetary practices of the US administration and the European Commission, the two largest providers, in financing their food aid to Eastern Europe and the FSR. Globally, the combination of statistical and budgetary evidence suggests that between 10–12 million tons of cereals food aid, or about 20% of shipments, was diverted from developing countries to the region between 1989–1990 and 1993–1994.

Aid for food: Acquisition of commodities in developing countries for food aid in the 1980s

Abstract The acquisition of commodities in developing countries for food aid operations through triangular transactions, local purchases and exchange or swap arrangements has increased significantly during the 1980s, particularly for use in sub-Saharan Africa. As largescale operations are a recent phenomenon conclusions on their impact and effectiveness must be regarded as provisional. Such operations have been largely cost-effective in terms of commodity and related costs as compared to ‘normal’ food aid actions. More appropriate commodities have been supplied. Some difficulties have been encountered regarding the timeliness of delivery and the assuredness of supply of commodities. The predominant use of commodities, local exchanges excepted, for emergency relief operations has limited the scope of longer-term development benefits in ‘source’ economies.

Food aid and food crisis in Sub-Saharan Africa: Statistical trends and implications*

This paper documents the rapid expansion and changes in food aid flows to Sub-Saharan Africa up to mid-1985. Trends for Sub-Saharan Africa as a whole and for the more seriously affected countries are examined, as are the comparative experiences of food aid of individual countries in the region. Table 11 lists the Sub-Saharan African countries and indicates the most seriously affected food-short countries, as defined by the WFP/FAO task force. It should be borne in mind that some practical problems exist in compiling data on food aid. These include lack of availability of reliable data, especially of most recent data; lack of common terminology and definitions; and different accounting systems. These data problems are sometimes a source of confusion. However, the basic facts are clear: food aid gradually emerged during the early 1980s as a resource too often of considerable significance to many countries of Sub-Saharan Africa. These trends were only accelerated with the crisis of 1984-1985. These facts provide a point of reference for further analysis of the sources of the crisis, its actual dimensions and consequences.

Disasters, Vulnerability and the Global Economy: Implications for Less-Developed Countries and Poor Populations

Two worldwide trends in recent decades are commonly noted and sometimes linked in discussing disasters. First, the reported global cost of natural disasters has risen significantly, with a 14-fold increase between the 1950s and 1990s (Munich Re, 1999). During the 1990s, major natural catastrophes are reported to have resulted in economic losses averaging an estimated US

The impact of drought on Sub-Saharan African economies

54 billion per annum (in 1999 prices) (ibid). Record losses of some US

Disasters, vulnerability, and the global economy

198 billion were recorded in 1995, the year of the Kobe earthquake – equivalent to 0.7 percent of global gross domestic product (GDP) (ibid).