By Denis McClean
PARIS, 7 May 2014 - The Head of UNISDR, Margareta Wahlstrom, has said that the OECD can have a “critical impact” on the preparatory work leading up the adoption of a new global framework for disaster risk reduction at the Third UN World Conference on Disaster Risk Reduction in March 2015.
Speaking in advance of the adoption today by the OECD Annual Ministerial meeting of a new recommendation on risk governance, she said that the OECD has helped to reverse the perception that disasters are solely a problem for poor countries – a key overall achievement of actions inspired by the Hyogo Framework for Action adopted in 2005 by all UN member States.
Ms. Wahlstrom told a press briefing in Paris yesterday: “Disasters are a significant problem for the richest part of the world and I think this is the work that the OECD is doing in really opening up this conversation and demonstrating what it means in economic, social and, in fact, political and stability terms.”
The OECD Annual Ministerial Meeting in Paris today is set to adopt a new recommendation on the governance of critical risks to stem the tide of rising economic losses from disasters.
Ms. Wahlstrom congratulated the OECD on the publication of a new report Boosting Resilience through Innovative Risk Governance. She said it is an important work which provides a solid compilation of all the issues that lie ahead and it will be important to bring the knowledge and conclusions in the report to the UN World Conference on Disaster Risk Reduction next year and to the preparatory meetings which will take place in July and November in Geneva.
The OECD report estimates that earthquakes, social unrest, industrial accidents, terror attacks, pandemics and other disruptive events cost advanced and emerging nations around USD 1.5 trillion in damages and economic losses over the last decade, more than double what they cost over the previous 10 years.
It follows on the heels of UNISDR’s 2013 Global Assessment Report on Disaster Risk Reduction “From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction” (GAR13) which found that direct disaster losses are at least 50% higher than internationally reported figures.
GAR13 also found that the number of export-oriented Special Economic Zones has expanded from 176 zones in 47 countries in 1986 to 3,500 zones in 130 countries in 2006 and many such zones are in hazard-exposed areas.
According to the OECD report launched in Paris - without action - these economic losses from disasters could rise further as climate change, higher concentrations of people and assets in risk-prone areas and closer economic links between countries mean the impact of such events spreads more quickly across borders and business sectors.
“Major disruptive events are happening more frequently and our ever-denser cities and interconnected economies mean the costs are getting higher all the time,” said Rolf Alter, Director of Public Governance and Territorial Development at the OECD, launching the report at the OECD Forum in Paris. “Smarter risk management to improve our resilience to shocks is the only way to lessen the impact on societies and economies.”
The report identifies weaknesses that risk driving up future losses. These include lapses in maintenance of protective infrastructure, a failure of regulatory reform to keep pace with new risk patterns, deficiencies at some private-sector providers of key infrastructure like energy and insufficient investment by individuals to protect assets. It finds that one country’s failure to properly manage a major risk can have a serious impact on others.
Governments should take action to raise public awareness and reduce over-reliance on the state for covering the cost of disasters, the report says. It suggests making better use of financial incentives to encourage businesses and people to protect against risks, and more national and international coordination and data sharing as a way to lessen disaster costs.
OECD ministers are discussing the report during the Organisation’s annual Ministerial Meeting on 6-7 May in Paris with a view to formally recommending their governments to act on it.
On top of the tragic loss of life from recent disasters, earthquakes in Chile and New Zealand in 2010 and 2011 cost 10% and 20% of annual GDP respectively. Japan’s 2011 earthquake, tsunami and nuclear disaster contributed heavily to a 0.7% economic contraction that year and reverberated around the world economy by disrupting industrial supply chains.