Warning for emerging markets on urban development and natcat risk

The report has warned the unprecedented influx of people to urban areas across the developing world is leading to a large increase in people living in locations susceptible to natural disasters and the situation is exacerbated by the explosive expansion of informal settlements or ‘slums’. About 180,000 people move to urban areas every day, with 18% of all urban housing being non-permanent or ‘slums’. Urban land development is leading to the degradation or even total destruction of natural barriers like swamps, wetlands and mangroves. The report called for a much greater focus on preparing people for the possibility of an extreme natural event occurring and building disaster resilience into communities—as opposed to concentrating largely on reactive relief initiatives in response to disasters after they have occurred. In addition to fewer people being killed or injured, it is estimated every $1 spent on building preparedness and resilience can save as much as $4 in relief, recovery and reconstruction later. This action could also help avoid the consequences of these disasters extending to international markets and supply chains. ENGINEER LEADERS Dr Tim Fox, Head of Energy and Environment at the Institution of Mechanical Engineers and lead author of the report, said: “There is also the need for engineers to be more involved in the short-term response to natural disasters that have occurred, to help ensure effective decisions are made for the longer term. Expensive engineering and architecture isn’t the only solution—significant benefits could be achieved just by ensuring engineers are available to help locate temporary infrastructure such as camps and supplies of water, sanitation and energy, as well as transfer knowledge about resilience to local populations.”hideThe Institution of Mechanical Engineers has made three key recommendations to help the world become more resilient to the effects of natural events like earthquakes, floods and storms: To focus more international development funding on building future resilience. Build local capacity through knowledge transfer. Embed the long-term engineering view in the short-term response. Meanwhile, measured in terms of their economic output, emerging countries are excessively affected by losses from natural catastrophes, according to Munich Re. At the same time, insurance against natural catastrophes makes particular economic sense in these countries. This statement is backed strongly by evidence from a Munich Re survey and a scientific study conducted by the University of Würzburg on the basis of loss data from Munich Re’s NatCatSERVICE database. Globally, natural catastrophe losses have increased substantially since 1980, due chiefly to rising economic values. Besides the urbanisation of exposed river and coastal regions, the greater frequency of loss-relevant natural events in some regions also plays a role in this context. HARDER HITS There is clear evidence that emerging countries are hit particularly hard by natural catastrophe losses. For example, a survey by Munich Re’s economic research department found that in emerging countries direct losses from natural catastrophes total an average of approximately 2.9% of the gross domestic product each year. In industrialised countries, this figure was 0.8%; in developing countries 1.3%. Michael Menhart, Chief Economist at Munich Re, said: “While emerging countries already have a relatively substantial capital base, they often lack the resources or necessary effectiveness in their administration to protect themselves better against the consequences of natural catastrophes—for example, by means of structural measures.”

Warning for emerging markets on urban development and natcat risk

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