Economic Effects Of Natural Disasters

Infrastructure DestructionBesides loss of life, infrastructure destruction is by far the most obvious type of damage that comes to mind when we think about natural disasters.But the economic consequences are rarely considered beyond what the cost will be to rebuild. That’s a serious problem for the victims of natural disasters because it’s the economic fallout that leaves some of the longest-lasting scars.

Source: http://goo.gl/eDkNXz

The Unforeseen Problem

- Business disruption

Example :On a grand scale, that’s what happened after Hurricane Katrina ravaged the Gulf coast back in 2005 – as companies reeled from catastrophic losses, millions of workers in Louisiana, Texas and Mississippi

- Mass unemployment

-Cutback in consumer spending

The Commodity Effect and Scarcity

-Affect the commodity prices

- extra effects included diminished margins for industries - from transportation to consumer goods.

- strikes, scarcity rules, and regular staples like food, merchandise and even housing can become commoditized as a result

In the next slide, you will find a diagram that represent the economic losses of natural disasters since 1965 until 2010. Note the name of the disaster and its loss.

The financial effects of natural disasters

Source: http://cdn.static-conomist.com/sites/default/files/20110326_WOC402.gif

forbes/Jonas Elmerraji. 2011. Financial Effects Of Natural Disasters. [ONLINE] Available at:

http://www.forbes.com/sites/greatspeculations/2011/03/15/financial-effects-of-natural-disasters/

. [Accessed 11 November 15].

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