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Unlock This CourseWhen natural hazards strike, not everyone is affected equally. Some countries bounce back quickly, whilst others struggle for years to recover. This difference often comes down to economic vulnerability - how well a country's economy can cope with and recover from natural disasters.
Economic vulnerability isn't just about being rich or poor. It's about having the right systems, infrastructure and resources in place to deal with disasters when they happen. A wealthy country might still be vulnerable if it's not prepared, whilst a poorer country might cope better if it has good disaster planning.
Key Definitions:
Usually have lower economic vulnerability because they have better infrastructure, emergency services and insurance systems. However, the absolute cost of damage can be very high because they have more expensive buildings and technology.
Often have higher economic vulnerability because they lack resources for preparation and recovery. Even small disasters can have huge impacts on their economy and they may need international aid to recover.
Several factors determine how economically vulnerable a place is to natural hazards. Understanding these helps explain why some countries cope better than others when disasters strike.
A country's level of development is the biggest factor in economic vulnerability. This affects everything from building quality to emergency response capabilities.
Developed countries have stronger buildings, better roads and more reliable power systems that can withstand hazards better.
Wealthier countries have better-equipped fire services, hospitals and rescue teams that can respond quickly to disasters.
Developed countries have insurance companies that help people and businesses recover financially after disasters.
When comparing economic impacts of hazards, we need to look at both absolute costs (the actual amount of money lost) and relative costs (how much this represents compared to the country's total wealth).
A £1 billion disaster might barely affect a rich country with a £2 trillion economy (0.05% of GDP), but the same cost could devastate a poor country with a £10 billion economy (10% of GDP). This is why relative impact is often more important than absolute cost.
Immediate damage from the hazard itself:
Longer-term economic effects:
These two tropical storms show how economic vulnerability affects disaster impacts differently in developed and developing countries.
Hurricane Katrina hit New Orleans in 2005, causing massive damage to one of America's major cities. Despite the huge absolute costs, the USA's economic vulnerability was relatively low.
Economic Impacts:
Why vulnerability was low:
Cyclone Nargis hit Myanmar in 2008, causing relatively lower absolute damage but devastating the country's economy due to high vulnerability.
Economic Impacts:
Why vulnerability was high:
Countries can take steps to reduce their economic vulnerability to hazards. This involves both preparation before disasters and building systems that help recovery afterwards.
Building earthquake-resistant buildings, flood defences and backup power systems reduces damage when hazards strike.
Having different types of industries and not depending on just one economic activity reduces vulnerability.
Working with other countries and international organisations provides access to aid and expertise during disasters.
Insurance is crucial for reducing economic vulnerability. It spreads the cost of disasters across many people and over time, so no one person or business faces the full impact.
Types of disaster insurance:
Climate change is increasing economic vulnerability worldwide. More frequent and intense hazards mean higher costs, whilst rising sea levels threaten coastal economies. Countries must adapt their economic planning to deal with these changing risks.
Geographers and economists use various indicators to measure and compare economic vulnerability between different places. These help identify which areas need the most support for disaster preparedness.