Preparing for natural disasters makes economic sense

Donors, governments and aid agencies prefer to invest in post-disaster relief rather than disaster prevention and preparedness. Building a culture of prevention is not easy, for the costs of prevention have to be paid in the present, but there are clear economic benefits.

The focus of natural disaster management has been shifting towards preparing for the impacts through measures such as early warning systems, evacuation planning and the protection of safe drinking water supplies. Governments are supporting community-level initiatives to reduce the negative impacts of disasters. A report from Tearfund (UK) applies cost benefit analysis to disaster mitigation and preparedness (DMP) actions in the Indian states of Andhra Pradesh and Bihar. Cost benefit analysis compares the economic costs and benefits of specific events and actions to provide a balanced framework for decision making.

DMP actions have provided assistance to the Bihari community – which is prone to annual flooding that washes away the villagers’ few physical assets – in the form of material actions and development of local skills and resources. An escape road has been built, evacuation boats have been purchased and raised hand pumps that stay above flood levels and remain functioning after the flooding recedes have been installed. Committees including women and other disadvantaged people have developed plans that prioritise helping those most at risk.

Both droughts and floods regularly affect the Andhra Pradesh community. The installation of raised hand pumps has ensured clean water supplies and reduced post-flood diarrhoea. A hand pump caretaker training programme has improved community skills and hybrid seed varieties that are more resistant to the pests common after floods have been introduced.

The authors find that:

• The cost benefit analysis demonstrates the economic benefits of DMP.
• Non-economic impacts (not covered by the cost benefit analysis) such as the local communities’ empowerment and improved cooperation also contribute to village development.
• Investment in development may be useless if it does not consider local conditions and integrate DMP in hazard-prone areas.

While it must not be used in isolation, cost benefit analysis can be a powerful contributor to the debate on DMP initiatives, and can help non-governmental organisations (NGOs) develop measures that make the greatest impact while demonstrating to potential donors the cost-effectiveness of proposed activities.

To reduce the vulnerability of populations living in disaster-prone areas:

• DMP should be integrated into development planning, especially in disaster-prone areas: studies in such areas in Africa and Central America should be carried out.
• A strategy should be developed to replicate and expand DMP initiatives based on proven economic benefits.
• Communities and NGOs should be helped to develop their skills and resources so they can undertake local level cost benefit analysis.
• Community initiatives should be linked with reforms and programmes at government level: a demonstration project would be very useful.
• Cultural contexts, ineffective governance and globalisation of trade should be considered, as they are among the root causes of such vulnerability.

A lack of evidence of the effectiveness of DMP, combined with the traditional separation of humanitarian relief and development activities, has led to the slow incorporation of DMP into aid agency practice. However, it is becoming clear that any development initiatives in disaster-prone areas must account for natural hazard risk.

Source(s):
‘Disaster preparedness programmes in India: a cost benefit analysis’ Network Paper No. 49, Overseas Development Institute, by Courtenay Cabot Venton and Paul Venton, November 2004 Full document.

Funded by: Tearfund

id21 Research Highlight: 25 October 2005

Further Information:
Paul Venton
Disaster Response Team
Tearfund
100 Church Road
Teddington
Middlesex, TW11 8QE
UK

Contact the contributor: paul.venton@tearfund.org

Tear Fund

Humanitarian Practice Network (HPN)
Overseas Development Institute
111 Westminster Bridge Road
London, SE1 7JD
UK

Tel: +44 (0) 20 7922 0331/74
Fax: +44 (0) 20 7922 0399
Contact the contributor: hpn@odi.org.uk

Humanitarian Practice Network, ODI, UK

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'Coping with disasters in the Philippines'

'Natural disasters: the business of Asian business?'

'Disasterproofing: reducing the impact of natural disasters'

'Disaster mitigation and preparedness: too important to be left to governments?'