Disasters and National Economic Resilience: An analysis of BRACED Countries

Executive summary

This paper aims to provide an analysis of economic resilience at the national level, presenting a broad picture of changes in resilience to climate extremes over a 42 year period. It focuses on 12 countries in the Sahel, East Africa and Asia that are part of the UK Government funded resilience programme BRACED (Building Resilience and Adaptation to Climate Extremes and Disasters).

A cross-country statistical analysis over the period 1970–2012 reveals that BRACED countries have been disproportionally affected by disasters, particularly those related to hydrometeorological hazards, when compared with other groups of developing countries. This suggests there are some commonalities between BRACED countries and helps justify and substantiate their selection to be included in this programme. However, when we look more closely at the types of hazards and impacts, the group is found to be heterogeneous. In Mauritania, Niger, Sudan and Kenya mortality rates are highest, whereas Ethiopia and Sudan have the largest numbers of people affected by disaster.

In this paper, authors create a typology of risk for BRACED countries that can be used to inform approaches to building resilience. Burkina Faso and Mali have a ‘mono-risk’ profile as they have experienced relatively few events, whereas Nepal has a ‘multi-risk’ profile and has experienced various disasters over the 42 year period analysed. Meanwhile, droughts have had a disproportionate effect compared with other climate-related hazards, especially in Africa, whereas floods have been very frequent in all BRACED countries.

This paper looks at how the national economies of different sets of developing countries are affected by disasters and have been able to ‘bounce back’ afterwards. The findings confirm a negative significant effect of disasters on economic growth: a climate event that affects 1% of the population contributes to a reduction in gross domestic product of 0.05% on average. In particular, the negative effects of climate-induced events are highly significant and important in landlocked countries, a category that includes many BRACED countries. More specifically in BRACED countries, shocks seem to be absorbed one year following a disaster, but there is a negative impact on economic growth three years following a disaster. A sharp increase in international assistance could be one explanation for the upward trend witnessed in the year following the disasters; in this case, a slowdown in the third year may be happening as a result of aid withdrawal and/or the incapacity of these countries to smooth aid flows in time. Overall, the analysis suggests disasters do not prompt a temporary economic boom, as has been previously suggested (Skidmore and Toya, 2007).

This analysis of economic resilience in BRACED countries highlights a number of important issues of relevance to aid agencies engaging in resilience-building programmes. The disproportional attention paid to larger, rarer, events over smaller, more frequent, events may be misguided. There is also a clear need to consider the range of risks and types of impacts when considering interventions, as there is wide variation across the BRACED sample, despite the fact that all these countries can be broadly categorised as disaster-prone. A more in-depth analysis is also needed to assess the impact of aid on countries’ economic recovery process, as this could be undermining longer-term efforts to build resilience.