How vulnerability varies between and within countries

Development is, in part, a process of investment and capitalization of economies over multi-year periods. There are, of course, widely differing types of economies, each subject to different processes and patterns of investment, institutional change and structural re-organization. Each type will exhibit a different sensitivity both in the short and long term to the impacts from various kinds of major disasters and hazard agents.

For analytical purposes, consider four commonly defined categories of economy as examples. It should be emphasized that these economies represent generalized stages of development and overlap is inevitable. The main purpose here is to focus on broad differential effects. The four types of economies are as follows:

Newly Industrializing Economies, highly urbanized, with high density urban populations.

Rural/Agricultural Economies, characteristic of many less developed countries - structurally adjusting, resilient, decentralized.

Small Island Economies - single crop or single commodity economies.

Highly Stressed Economies - these are highly vulnerable and can slip into catastrophic economic decline quickly. The situation is often caused or exacerbated by civil war or related forms of internal conflict or disruption.

Using these four categories, we can begin to develop an overview of how the various types of economies differ in their overall vulnerability to each type of shock.

Newly industrializing economies

The economies of newly industrializing areas are fairly indifferent to agricultural damage. They can usually withstand losses in this sector. There are, for example, often sufficient financial reserves to purchase food on global commercial markets. There may also be more short-term alternative sources of employment for agricultural workers. On the other hand, these economies may be vulnerable to damage to infrastructure, e.g. power systems, transport, communications, and public utilities, by earthquake and tropical storms.

Rural/agricultural economies

These economies, which often characterize less developed countries, are relatively immune to disasters of short and sudden impact. However, they are susceptible to disasters which have extensive rural impact, particularly drought, severe pest damage and civil conflict.

Small island economies

Island economies are often highly dependent on a few crop types or commodities. They are often particularly susceptible to tropical storms (with crop destruction and damage to ports), drought, and volcanic eruptions. Two hurricanes in Dominica in the late 1970s caused direct, indirect, and secondary losses of around US$1700 million. In Jamaica in 1988, the Gross Domestic Product fell an estimated two percent after Hurricane Gilbert as compared with a projected growth for that year of five percent.

Highly stressed economies

Generally, economies under exceptional stress, and civil conflict are also particularly vulnerable to drought and widespread floods. But almost any disaster-related shock will have a destabilizing impact on these economies.

Disasters also can destabilize other processes which complement or underpin development activity, most notably structural adjustment activity. The requirements for immediate recovery and reconstruction after an extensive sudden disaster can reverse and disrupt this adjustment process, while further compounding its negative impacts. For example, depending on the particular conditions of the disaster, public expenditure requirements may increase substantially, while at the same time employment and output fall and investment and savings decline. The outcome will be a further decline in the prospects for future development.

Q. Which sectors of your country’s economy are most likely to be affected by disasters?

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