Loss of resources

Development resources are lost when a disaster wipes out the products of previous investment. The primary loss of development resources occurs from damage to capital stock and inventory. This is initially the most visible effect of sudden impact disasters. Tropical storms can destroy factories, fishing ports, power systems and telecommunications. Earthquakes damage and destroy buildings, transport, and public utilities. Disasters have a particularly destructive economic impact in areas where there are very few alternatives for assets which are destroyed or in areas where those assets are particularly critical.

There is a further loss of development resources from reduction in the production of goods and provision of services. This results from direct disruption by the disaster and its immediate local effects and, subsequently, from the increased cost of goods and services which then result. Income losses resulting from lost production have a particularly depressing impact on consumer ability to purchase goods and services. Lost productivity may also result in loss of export markets, for example, a coconut plantation in India lost to cyclone damage will take five years to regenerate during which time other coconut producing countries can increase market share.

UNDRO News, March/April