A Japanese couple offer prayers for the victims of the earthquake and tsunami at Kesennuma city in Miyagi prefecture on March 11, 2012.
A new study by Maplecroft risk analysis firm says emerging Asian economies face the greatest financial risk from natural disasters.
The study suggests that the limited ability of some Asian states has left them exposed to “major destructive natural hazards, such as earthquakes, flooding and tropical cyclones,” researchers wrote.
“Businesses operating in, investing in or sourcing from emerging economies are therefore particularly exposed… and need to build their resilience to mitigate the disruption and impact of an event.”
Japan’s earthquake and tsunami made last year the most costly 12 months on record for natural disasters, costing US USD 380bn.
According to study lead author Helen Hodge, Asian economies, – especially those located in the south-east of the continent, face a variety of potentially devastating hazards.
“The Pacific Ring of Fire is a belt of seismic risk that draws in Indonesia, Philippines, Japan and Taiwan etc,” she told the state-funded BBC.
“So that exposes these nations to seismic risk, and high risk from earthquakes, but also – as we saw in Japan – the secondary risk of tsunamis.
“This combined with the hydro-meteorological risks. For example, along the Mekong Delta, we do see very high flood risks.
“There are the drought risks as well when we see Monsoons failing or arriving late.
“It is not really one risk in particular but it is the combination of multiple risks that are prominent in the areas.”
The report said that although Japan, the US, China, Taiwan and Mexico were the countries with the highest economic exposure to natural hazards, but huge economies could recover relatively quickly because of established infrastructure, disaster preparedness and tight building regulations.
“A way to explain how this might differ is by looking at somewhere like the US, where clearly down the west coast and alongside the east coast, you have got major concentrations of economic output hazards – earthquakes on the west, and hurricanes on the east,” Ms. Hodge explained.
“That alone is going to drive the US into high rankings for absolute economic exposure.
“However, if you look at that as the wider relative economic output – because there are concentrations of economic exposure in places like the mid-west that are not as heavily exposed to this risks – this has a balancing effect.”
“[But] when you consider that the Haitian earthquake in 2010, if you look at the proportion of the Haitian economy that was exposed to that earthquake, some of the upper estimates was close to the nation’s annual GDP.”
