Table Of ContentEconomics
of
Natural Disasters
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Economics
of
Natural Disasters
Editors
Suman Kumari Sharma • Euston Quah
Nanyang Technological University, Singapore
with additional contributions by
Zach Lee
World Scientific
NEW JERSEY • LONDON • SINGAPORE • BEIJING • SHANGHAI • HONG KONG • TAIPEI • CHENNAI • TOKYO
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Published by
World Scientific Publishing Co. Pte. Ltd.
5 Toh Tuck Link, Singapore 596224
USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601
UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library.
ECONOMICS OF NATURAL DISASTERS
Copyright © 2019 by World Scientific Publishing Co. Pte. Ltd.
All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means,
electronic or mechanical, including photocopying, recording or any information storage and retrieval
system now known or to be invented, without written permission from the publishers.
For photocopying of material in this volume, please pay a copying fee through the Copyright Clearance
Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. In this case permission to photocopy
is not required from the publishers.
ISBN 978-981-4723-22-0
For any available supplementary material, please visit
https://www.worldscientific.com/worldscibooks/10.1142/9791#t=suppl
Desk Editor: Sandhya Venkatesh
Typeset by Stallion Press
Email: [email protected]
Printed in Singapore
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DEDICATION
I dedicate thisbookto my husband,Mohan Sharma,forhisimmense
faith in me and my work whose continued love and supportthrough-
out made this possible. Also, the value of honesty, integrity and faith
inhumanitythatIsharewithhimweremyinitialmotivationstowork
in areas aimed at reducing peoples’ pains and sufferings caused by
disasters.Ialsodedicatethisbooktomy twodaughters,AvaSharma
and Sima Sharma, for their constant support and encouragement.
Suman K. Sharma
I dedicate this book to the memory of all those who have suffered
or perished in natural disasters. I also dedicate this book to the
memory of my mentor and teacher, Professor E.J. Mishan of the
London School of Economics who taught me much on the value of
wisdominadditiontoknowledge. Finally, thelove formyfamily who
understands and supports my endeavours, as always.
Professor Euston Quah
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b2530 International Strategic Relations and China’s National Security: World at the Crossroads
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PREFACE
Natural disasters are not only catastrophic and often damaging to
lives and property, they can also displace people’s livelihood and job
options. Major catastrophic events usually resultin lost productivity
and can exert severe adverse impacts on the affected economy.
Intangible damages such as psychological pain and suffering, and
emotional stress are often underestimated.
In recent times, natural disasters’ adverse consequences are
seen to be more severe where societies and peoples’ lives and
livelihoods are more and more connected. Furthermore, recent
disasters’ consequences have extended over regions, time and sectors
depicting that major catastrophic events can disrupt economies far
beyond the local ones largely in terms of global infrastructure and
interconnectedsupplychainsandmarkets.Consequently,thegrowing
need to understand natural disasters’ impacts cannot be emphasized
enough. Comprehending disasters will not only help understand
the underlying financial risks but also enable the policymakers
and development actors to devise and implement effective disaster
risk reduction policies and strategies aimed at mitigating risks and
minimizing potential disaster threats and building resilience.
Much has been written on the devastating impacts of natural
disasters and the resilience of countries and societies. However, there
is a paucity of work on the economics of natural disasters. This
book attempts to fill in this much neglected gap, and hopefully, the
examples of various types of natural disasters occurring especially in
Asia can help to understand better and enrich the literature.
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viii Economics of Natural Disasters
The topics covered in this book range from Poverty and Natural
Disasters, Impacton Growth, Government Budget andDepth, Inter-
national Trade and Financial Flows, Human Capital and Political
Economy, Quantification for Economic Losses, Risk Exposure to
Extreme Events, to Impacts on Residential Property Values to
disaster risk reduction policy agenda, government planning and
building resilience.
Detailed case studies of natural disasters such as the Great
Hanshin-Kobe Earthquake are also discussed.
It is perhaps ominously coincidental that one of us (Euston
Quah), had experienced first-hand, the June 19, 2018, Osaka Earth-
quake when he was visiting Kobe University. The magnitude of this
earthquake which reached 6.1 on the Richter scale struck Osaka at
7.58am, and reached its neighbouring city Kobe at 8am. Awakened
by the big jolt of the earthquake, the entire hotel (Sheraton Kobe
Bay) shook and swayed for almost two minutes before normalcy
returned.Itwas emotionally distressing,andthoughts of thispresent
book being prepared quickly met reality.
We would like to place on record the valuable advice and
encouragement throughout by Ms. Sandhya Venkatesh of World
Scientific Publishing, as we worked to get the manuscript ready for
publication. We have also benefitted from Luke Luldashov, our very
capable and diligent research assistant.
Needless to say, all errors remain with the editors.
Dr Suman K. Sharma and Professor Euston Quah
Editors
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ABOUT THE CONTRIBUTORS
Azreen Karim is an applied economist and is currently based at
the Bangladesh Institute of Development Studies (BIDS), Dhaka,
Bangladesh. Besides her qualitative work on establishing a concep-
tual framework on disaster-development nexus, her current research
interestsincludeenvironmentalanddisastereconomics,international
and development economics. Azreen’s articles have appeared in
international reputed journals namely World Development, The
Singapore Economic Review, and Review of Economics and Insti-
tutions. In 2015, she was awarded the prestigious Jan Whitwell
Prize for best presentation of work undertaken by a doctoral
student. She had consulted and developed projects for United
Nations Development Programme (UNDP), The World Bank, Inter-
national Institute for Sustainable Development (IISD), International
CentreforTradeandSustainableDevelopment(ICTSD),Sustainable
Development Policy Institute (SDPI), Trade Knowledge Network
(TKN) and Economic Research Institute for ASEAN and East Asia
(ERIA).
Ilan Noy is the Chair in the Economics of Disasters and a Professor
of Economics at Victoria University of Wellington, New Zealand.
His research and teaching focus on the economic aspects of natural
hazards’ and disasters, and other related topics in environmental,
development, and international economics. He is also the founding
Editor-in-Chief of Economics of Disasters and Climate Change, a
journal published by SpringerNature. He previously worked at the
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