UNITED NATIONS -- Officials saluted Peru for being a leader in disaster risk reduction, as the U.N. launched a startling global assessment of economic losses on Wednesday.
Peru’s budget, which in 2010 made risk reduction measures a condition for funding major public projects, was held up as an example of development policy for other nations prone to natural disasters to emulate and for investors willing to fund projects after disasters strike.
Peru’s approach has been spreading to other-disaster prone nations in Latin America and the Caribbean, says the U.N. Office for Disaster Risk Reduction..
“It’s important for us to have these types of tools,” said Victor Munoz, an official responsible for sustainable development with Peru’s U.N. delegation.
“We do not need to be aligned to a particular ideology to be aware of the importance of taking action on disaster risk reduction,” Munoz said. “Most of us [in the region] will not contest this approach.”
Peru has been hit by three major earthquakes in the last decade, one of the largest in 2007, causing an estimated $300 million in economic losses, according to the American Society of Civil Engineers.
During the launch of the latest Global Assessment Report on Disaster Risk Reduction, Secretary General Ban Ki-moon called on global business investors to adopt new strategies for reducing the “out of control” economic losses tied to natural disasters around the world.
Direct losses from floods, earthquakes and drought have been underestimated by a startling 50 percent and are in the range of $2.5 trillion since 2000, the report finds.
“For too long, markets have placed greater value on short-term returns than on sustainability and resilience,” Ban said. “At long last, we are coming to understand that reducing exposure to disaster is not a cost but an opportunity to make that investment more attractive in the long-term.”
The responsibility for infrastructure development generally rests with the public sector, but it’s businesses that stands to lose most when bridges fall and flooded roads become impassable after disasters.
Andrew Maskrey, the lead author of the assessment report, said the private sector should take the lead in disaster risk reduction where local governments are reluctant or lack the resources.
“We can’t blame ill preparedness on mother nature and earthquakes,” Maskrey said. “Disaster-proof investments will have decades of impact for both the private and public sectors.”
Still, many small island nations in the Caribbean aren’t positioned to see disaster risk reduction as a strictly business investment priority. If a hurricane hits Mexico, a relatively small segment of its economy will be impacted, compared to the same hurricane hitting relatively small islands such as St. Lucia or Antigua, Maskrey said.
“Every time they have a disaster, [Caribbean nations] have to take on new loans to actually rebuild, which actually makes them more indebted,” Maskrey said. “It’s a little bit of a downward spiral.”
But that doesn’t absolve vulnerable nations from seriously tackling risk reduction, says Margareta Wahlstrom, Ban’s special representative for Disaster Risk Reduction.
“We’ve looked at this from a practical perspective for the countries that are exposed and are economically vulnerable,” Wahlstrom said. “I think for them by calling on the investors to invest in the viability of new development is something that they can do.
“The cards are in their hands. They don’t need to feel that they need to take every bad [development] offer,” she added.