Caroline Hurford/ International Federation, Ethiopia 2000

Chapter 2 - summary
The ecology of disaster recovery

The planet's poorest are becoming more exposed to the risk of disaster – aggravated by climate change and globalization. Each year, 211 million people are affected by 'natural' disasters, setting back development by decades. Two-thirds of victims are from countries of low human development. If these trends continue, international development targets of 2015 will not be met.

Post-disaster recovery efforts will increasingly be judged not by how quickly structures are rebuilt – only to be destroyed again the next time disaster strikes – but by how reconstruction contributes to the long-term disaster resilience of communities. This chapter examines four themes central to post-disaster economic recovery:

• Sustainable livelihoods: key to disaster resilienct: Poor people suffer more in disasters. Poverty drives them to live in areas where disasters strike more often. The traditional response is to build barriers between nature and the poor. But this approach has been consistently challenged.
  
  Research into two decades of post-disaster reconstruction in south-eastern India suggests that people with sufficient resources could protect themselves even if physical defence systems are absent or fail. The research argues that "the best way to reduce vulnerability is to improve the socio-economic standing of the most vulnerable". This may be as simple as enabling the poorest to buy a cow or goats, to acquire savings or a plot of land to generate independent income.
  
  Status and access to resources will not be improved by an infrastructural approach to recovery. But the post-disaster period does provide an opportunity to introduce new ideas: local cooperative enterprises that promote self-help and self-employment; minimum and equal wages for men and women; saving schemes to build up a local credit facility; and using local materials and labour to rebuild destroyed homes.
  
  Failure to address livelihood issues can also hamper attempts to resolve conflict. Creating diverse income-generating opportunities is essential in demobilizing troops. But lessons are not being learnt. During 2000, a 70 per cent unemployment rate in East Timor was a major obstacle to reconciliation, say experts.

• Plug leaks to maximize benefit of incoming resources: Following disaster, millions of reconstruction dollars pour into often poor economies. How can resources be maximized to promote long-term livelihoods and reinvigorate the local economy? A weak local economy allows incoming resources to leak away.
  
  Plugging the leaks means paying for labour and resources locally, instead of buying-in ready-made replacement infrastructure, housing and services from outside contractors. Plans for disaster recovery need to be employment-rich and locally rooted, rather than flying in aid from abroad. Small, locally-based enterprises will be at the heart of rebuilding infrastructure and services. They also help absorb and retain incoming financial assistance.
  
  New ways of measuring the value of aid inputs are needed. Resources cannot be assumed to regenerate post-disaster communities until they can be demonstrated to have expanded the basis for sustainable livelihoods, and not displaced other local activities.
  
  The financial presence of aid interventions could have a positive impact on the local economy. However, the spending power of international aid workers and peacekeepers based in East Timor, estimated at around US$ 10 million a month during 2000, benefits mainly foreign entrepreneurs.
  
  If all the aid going into a post-disaster region is spent on externally supplied goods, services and consultants, then new money will quickly leave the area. If it is spent on services that are locally supplied, then aid will continue to circulate in the local economy

• Diversified local economies are stronger than monocultures: Hurricane Mitch's impact on the Honduran economy in 1998 was equivalent to three-quarters of annual gross domestic product (GDP). Bananas were the major export and their annihilation slashed the nation's chief source of income. Diversification not specialization, production for consumption not export, and redistribution of good-quality land would all increase food and economic security. Greater self-reliance reduces vulnerability to disaster.
  
  The highest post-disaster priority, according to the International Labour Organization, is "employment maximization" at the local level. Policies should identify small business opportunities, chances for cooperatives and make credit available to farmers. Special arrangements should accommodate female workers' needs such as "day care and collective arrangements for dependants".
  
  In Bangladesh, community-guaranteed micro-credit schemes allow post-disaster flexibility, because they provide cheap credit to people whose only other option would be extortionate commercial loans.
  
  When money is not available at the local level, communities can turn to 'Time Banks', which connect skilled people with time on their hands to recovery work that needs doing. Work done is paid in units of 'time currency', which can be exchanged for other goods and services.
  
  Strategies for post-disaster recovery must grow out of the cultural, economic and social character of affected communities – their ecology. As with diversity in ecosystems, diverse economies are more resilient and quicker to recover than economies dependent on single, specialized activities. Diversity is the key to retaining resources and crucial in mitigating disaster.

• Impacts of globalization and climate change drain recovery resources: Deregulation of investment is making it harder for host countries to keep profits in the place they were created. The poorer and more risk-prone a country is, the higher the rate of return demanded by investors – up to 30 per cent in sub-Saharan Africa.
  
  Meanwhile, factors boosting disaster resilience (e.g., strong health and education, diverse local economies) are undermined by the structural adjustment programmes that poor nations are encouraged to pursue. These programmes squeeze social-sector resources and concentrate on economic specialization and primary commodity exports.
  
  Recent United Nations (UN) research suggests global warming could raise seas seven metres, submerging many major cities. Poorest regions are most at risk, as agricultural yields drop and disasters increase. Estimates for the costs of weather-related disasters over the next 20 years range from US$ 6 trillion to 10 trillion – ten times likely aid flows. Meanwhile, aid to the world's least developed countries has fallen a third since 1991.
  
  The poorest are most exposed to disasters, yet their contributions to warming the atmosphere are negligible. The average US citizen is responsible for 300 times the carbon dioxide emissions of the average Mozambican.
  
  How should the international community respond? The US decision in 2001 not to ratify the Kyoto Protocol drew widespread concern. Bangladesh's environment minister, faced with the prospect of 20 million 'ecological refugees' as sea levels rise, said,"I would request developed countries of the world to rethink their immigration policies." Another proposal circulating suggests that poor, disaster-hit countries could seek compensation for climate change from industrialized countries through legal action.
  
  To conclude, lifting people out of poverty is the best way to reduce the number who have to be lifted out of mud, floodwaters or drought when disasters strike. Investment in local-level economic recovery is better at creating disaster-resilient communities than investment that depends on dams, dykes and concrete. Sustainable livelihoods may even hold the key to peace in war-torn countries. The poorest can best recover from today's disasters and conflicts on the foundations of strong, inclusive and diverse local economies, rather than trusting to the vague promises of the global economy.
  

This chapter was written by Andrew Simms, an economist at the New Economics Foundation, London. The box was written by Kies Rietveld, a medical doctor who has worked in Afghanistan and East Timor.