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Tuesday, January 04, 2005

SO-CALLED “NATURAL” DISASTERS
Part II. The Need for a Global Disaster-Relief Agency
James S. Henry

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So far, the Boxing Day 2004 Sumatra tsunami is still not quite the most destructive earthquake-related disaster in history, but this may soon change.  Until now, the casualty records have been held by the 7.8 Richter-scale earthquake that leveled Tangshan, China, in 1976, claiming at least 244,000 lives, and by the 1556 earthquake in China’s Shanxi province that claimed 830,000.

However, the Sumatran quake has already resulted in more than 150,000 deaths, including 94,081 confirmed dead in Indonesia, nearly 9000 dead or missing in Thailand, 15160 in India, (andup to 20,000 more in the Andaman and Nicobar Islands), 44,000 in Sri Lanka, and 396 in Tanzania, Somalia, the Seychelles, Madagascar, the Maldives, Burma, Malaysia, and Bangladesh. Furthermore, the latest reports from UN observers in the region indicate that even these death tolls may grow “exponentially.”

For the bankers and investors in the audience, the purely economic impact of the Sumatra tsunami is expected to be relatively slight, since most of its victims were indigenous poor people in remote areas, and the region's tourist industry will quickly recover. Japan’s 1995 Kobe earthquake, in contrast,  caused more than $100 billion of property damage. 

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However, in terms of lives lost, injuries, displaced people, and damage caused beyond the boundaries of the country where the earthquake originated, Sumatra is already a record-setter. While other tsunamis have taken lives outside their countries of origin, this one’s long-distance impact has already taken more lives in more countries than all other tsunamis since 1800. The potential human and geopolitical impact of all this is much more significant than the destruction of over-valued Kobe high-rises.

In other words, this is one of the most profound transnational disasters ever. It is therefore not surprising that, as discussed below, it has already commanded an overwhelming global response from the world's aid donors -- at least on paper.

_40684617_gloves_1 For the moment, at least, the developing world may have finally succeeded in capturing our attention, if by nothing more than the sheer power of its own suffering.  Perhaps we will finally now come to understand that both the relief and the prevention of such disasters are appropriate global responsibilities.

We may also wish to reserve some of our benevolence and good will for the victims of more "routine" Third World perils -- for example, the two million children who die from drinking dirty water each year, the 1.6 million people who still die each year from tuberculosis, and the 1.2 million who die from malaria. These continuing disasters may not be as dramatic, sudden, and visible as tsunamis and earthquakes, but they are no less worthy of our concern.    

TO THE RESCUE?

Après le fait, the world community has mounted a huge relief effort to provide clean drinking water, food, medicine, energy, medical care, and temporary shelter for 5 million displaced people.

The most rapid progress has been made on fund-raising.  In one week, 45 governments and international institutions pledged  more than $3.2 billion in humanitarian aid, more than the world spent on all such disasters from 2002 on. The tsunami pledges so far include an incredible $680 million from Germany, $500 million from Japan ($3.91 per capita),  $350 million from the US ($1.19 per capita), $182 million from Norway ($39.13 per capita), $96 million from the UK ($1.59 per capita), $76 million from Sweden ($8.39 per capita), $76 million from Denmark ($14 per capita), $250 million from the World Bank, $175 million from the Asian Development Bank, $309 million from other EU member countries ($1.06 per capita), $66 million from Canada ($2.06 per capita), about $60 million apiece from Australia ($3 per capita) and China (5 cents per capita), $50 million from South Korea, and $25 million from Qatar. Somewhat less generously, Saudi Arabia and Kuwait have each contributed $10 million, New Zealand $3.6 million, Singapore $3 million, Venezuela, Libya, Tunisia, and UAE $2 million, Turkey $1.25 million and Mexico $100,000.

Furthermore, there are also discussions underway among G-8 countries to provide debt relief for Indonesia, Sri Lanka, and the other victim countries, which might yield another $3 billion a year -- so long as these countries agreed to spend it on aid for tsunami victims.

Three days after the quake, President Bush had promised just $35 million. As several observers noted, that was just 12 cents per capita, less than 10 percent of Canada’s per capita effort. As Vermont Senator Patrick Leahy said, “We spend $35 million before breakfast in Iraq.”

Furthermore, in 2004, the US Congress had provided $13.6 billion to Florida’s hurricane victims, 5.6 times more than the $2.4 billion that the US spent on all global humanitarian assistance that year. Colin Powell rebuked the critics in public, reminding them that the $2.4 billion was 40 percent of the entire world’s budget for humanitarian relief in 2004. Apparently he also quietly lobbied the President to increase the official US aid.

Meanwhile, in addition to the pledges of official government aid, more than fifty private relief agencies have also pitched in, from Action Against Hunger, CARE, Catholic Relief, Doctors Without Borders, Islamic Relief, Oxfam, the International Red Cross, and Save the Children to UNICEF, World Action, and WorldVision.  The  American Red Cross alone reports that it has already received more than $79 million in private aid pledges for tsunami victims, while CARE US has received $3.5 million, Doctors Without Borders $4 million, Save the Children $3 million, Americares $2 million, Oxfam US $1.6 million, Catholic Charities $1.1 million, and World Vision $1 million.

Private donors from European countries have also been exceptionally generous. For example, Swedes’ 9 million people have contributed more than $60 million, in addition to the $76 million that their government has offered – more than $15 per capita. And Norway’s 4.6 million people have raised nearly $33 million in private donations, in addition to their government's $180 million -- a $46 per capita global record for tsunami relief.

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...THE PAPER THEY’RE PRINTED ON?   

Unfortunately, the historical record shows that such official government disaster aid pledges are cheap -- they often do not result in “new money,” and many countries actually renege on their official pledges completely.

For example, in the case of Iran’s Bam earthquake in December 2003,  40 donor countries also responded to a similar “UN flash appeal,”pledging $1.1 billion of aid. However, one year later, less than 2 percent ($17.5 million ) of that has been forthcoming.  Most foreign aid workers and journalists came and went in less than a month, and Bam’s reconstruction problems have long since disappeared from the headlines.  While significant progress has been made in restoring basic services like water and electricity, most of the city’s 100,000 former residents are still unemployed and living in tents.

Such reneging by the world community has also been the pattern in most other recent disasters, including Mozambique’s 2000 floods,  Central America’s Hurricane Mitch in 1998, and similar crises in Somalia, Afghanistan, and Bangladesh. 

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We will just have to see whether the victims of the Sumatran tsunami  experience something similar. UN Secretary General Kofi Annan has predicted that it will take a decade for many of the countries affected by the tsunami to recover.

ANOTHER AD HOC RELIEF EFFORT?

Each time there is a crisis, the world’s aid organizations have to scramble to pass the hat.

The outpouring of all this assistance for the tsunami’s victims on short notice has been impressive.  But perhaps we should not be so proud of ourselves. The reality is that this effort has been yet another ad hoc, “aid pick-up-game," where the world waits until there is already a life-and-death crisis with millions of people in peril to swing into action, raise money, and rush assistance to the front lines.

This reactive approach has many unfortunate side-effects:

~       Each time there is a crisis, the world’s aid organizations have to scramble to pass the hat,  even as they are also scrambling to organize assistance. 

~       The actual delivery of relief on the front lines is much slower than it needs to be.

As usual,  in the case of the Sumatra tsunami,  most of the victims are located in remote areas with poor transportation, sanitation, water, and health care systems,  and many other problems. Several key regions – in this case Indonesia’s Aceh province, Sri Lanka’s eastern regions, and Somalia – also have active guerilla movements or local warlords. Some countries -- India, in this case – have also insisted that they don’t need any foreign assistance, showing more concern for nationalism than their own people. 

However, when it comes to disaster relief, all of these problems are just par for the course, and predictable. What is inexcusable is the world has once again had to organize yet another massive relief effort from scratch.

One result is that in most of the affected countries,  it has taken more than a week to get medical aid and substantial quantities of  food, blankets, and clean water – to the victims. In a situation where hundreds of thousands are injured and each incremental day costs hundreds of lives, only Finland and Norway had relief planes in the air by Tuesday December 28, two days after the disaster. Most other donors needed a whole week.    

~       Given the semi-voluntary nature of the relief process, national interests, domestic politics and media exposure play an excessive role in deciding how much aid is given, who manages the assistance, and how much goes to any particular crisis – as compared with raw human need.

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~       One by-product of all this was last week’s unseemly spectacle, where donors like the US, the UK, and Japan conducted a veritable public auction for the value of their aid pledges. The results may have little to do with actual aid requirements. We can only hope that this time around most the pledges will be honored. 

~       There is a tendency for global aid efforts to be limited by the media’s attention span – as Bam’s victims, the residents of Sudan’s Dafur region, and the victims of other disasters have learned the hard way. When the number of “new bodies”  tapers off, so does the attention – and the aid.

THE NEEDS FOR A  GLOBAL AID ORGANIZATION

If global humanitarian aid were run on a more business-like basis, 

~       There would be an ample global “reserve” set aside for such emergencies. This would be funded by a global tax in proportion to objective measures of donor capacity like population size and wealth.

~       In case of an actual calamity, we would not try to assemble “aid brigades” on short notice from dozens of different organizations all over the globe and expect them to work well together under impossible conditions. There would be already be a solid global organization in place, ready to respond rapidly, with coordination agreements and contingency plans already worked out with local governments.

This organization would also have basic stocks of transportation equipment and relief supplies pre-positioned in key regions of likely need.  After all, the US military alone now has 890 bases around the world that are on ready-alert, prepared  to fight wars at a moment’s notice.  The world community has zero “aid bases,”  prepared to fight to save human lives at a moment's notice.

Given the increasingly global nature of  so-called “natural” disasters, the current approach to global humanitarian relief is no substitute for a permanent, well-funded, global aid organization.

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© James S. Henry, Submerging Markets™, January 05

http://www. submergingmarkets.com

January 4, 2005 at 04:00 PM | Permalink | Comments (1) | TrackBack