The World Bank Strikes Again

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The blog Disaster Preparedness: saving lives and livelihoods was pointing out the concern over the increase in natural disasters. The writer is not the only one who is concerned about the issue as World Bank together with UN published a new report called Natural Hazards, UnNatural Disasters: The Economics of Effective Prevention (2010) giving us insights of how to handle the unbearable costs of growing disasters that are now often linked to the climate change (see for example Climate Change and Disaster Risk Reduction by UNISDR, 2008). To those who will not have time to read all the report, I will introduce here some of the policy advices that were recommended. However, be warned, the matters I bring out here, do not include the entire report which can also be credited in many aspects. The specific points I mention are chosen to reflect my subjective and biased point of view, others may disagree with me. The report does mention that it is looking at disasters through an economic lens so naturally that will also influence the things they want to bring to our attention. However, I still feel that there is a need to take a look at some chosen policy implications to fight the disasters and, hence, also the climate change.

The report mentions that “when land and housing markets work, property values reflect hazard risks, guiding people’s decisions on where to live and what prevention measures to take” (p.4) and continues recommending that “getting land and rental markets to work can go a long way to inducing people to locate in appropriate areas and take preventive measures” (p.5).  According to the report, it is the rental controls, taxing property sales and controlling market prices and imports that are the reasons why the ‘poor’ live in bad houses and disaster vulnerable areas. However, it is somehow difficult to understand how letting markets to control the housing prices – so that the prices will most likely increase – is helping those with less income. Would you not think that it goes exactly to the opposite direction; when prices rise, only people with money (and probably lots of it) can afford any kind of decent housing. This could also push the people who before were just about able to pay their rent towards informal housing, or like the report mentions, away from appropriate areas. And those who were marginalised to start with will be even further on from the goal of getting a place for themselves. Whatever the case, the conclusion seems to be that letting the market to function freely, problems are fixed in no time.

However, even though the report suggests that government interventions in the market affects the ‘poor people’ in harmful ways, the report continues to recommend in the next instance that “governments must provide adequate infrastructure and other public services” (p.6). So government intervention is needed in some cases after all? According to the report, governments should not only invest in infrastructure maintenance but also make investments into some “other less obvious public services” like “reliable city transport” (p.6). Public transportation? Never would have thought of that without this report.

The report also remembers to emphasise the important role of good institutions. Good institutions are better equipped to deal with natural disasters but also to “allow divergent views to percolate into the public consciousness” because “permitting dissent allows the public to be informed and involved when alternative proposals and opposing views compete for their support” (p. 7). Just remember that it happens within the market structures. Taking a bit of radical standing the report continues by stating that “often, institutions are linked to democracy, but this report finds that it is not the label of democracy or dictatorship that matters. Good institutions are associated with political competition more than voting alone…” (p. 8). Excellent news as someone might have thought that dictatorship can occasionally hinder political competition.

We must give the report credit for pointing out that most official aid is spent on disaster relief and not enough have been done to prevent natural disasters. However, in order to remind us what this is all about, the report points out “the Samaritan’s dilemma: the inability to deny help following a disaster to those who have not taken sufficient prevention measures” (p.10). So the blame is still on the bad ‘developing countries’ and ‘poor people’ who have not been prepared for all these adverse effects of climate change that, basically, have been created by the actions of the so-called ‘developed’ countries.

I was hoping that we are given some new policy insights regarding the important issue of disaster prevention and climate change but somehow I get the feeling that I have read this same report before. Reports’ names and publication years might change but content stays the same. Well, looking at the bright side, at least some things are stable in this complex, disaster vulnerable world.

Due to technical difficulties was not able to add the link to the text above, so if you want to see the World Bank and UN report, here is the link: http://www.reliefweb.int/rw/lib.nsf/db900sid/VVOS-8B4SKR/$file/WorldBank_Nov2010.pdf?openelement

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