Floods may cost South Asia $215b a year by 2030

Financial Chronicle - - COMPANIES & MARKETS - AR­CHANA CHAUD­HARY & BIBHUDATTA PRAD­HAN

AS GLOBAL at­ten­tion fo­cused on hur­ri­canes Har­vey and Irma, more than 41 mil­lion peo­ple across South Asia bat­tled floods and dis­place­ment.

From Afghanistan in the west to Bangladesh in the east, floods could cost South Asia —home to a fourth of the world’s peo­ple — as much as $215 bil­lion each year by 2030, ac­cord­ing to the World Re­sources In­sti­tute’s global flood an­a­lyzer launched in 2015.

“Com­pa­nies with op­er­a­tions on coasts, next to large rivers, on low-ly­ing flood plains and in ur­ban ar­eas with poor drainage and san­i­ta­tion are at great­est risk,” said Tom Hill, ex­ec­u­tive di­rec­tor, cri­sis and se­cu­rity con­sult­ing, at Con­trol Risks in New Delhi. “More rain and ex­treme weather will not only hit busi­nesses in South Asia, but also global com­pa­nies that source their prod­ucts and raw ma­te­ri­als from the re­gion.”

At least 1,200 died last month as wa­ter swamped cities like In­dia’s fi­nan­cial cap­i­tal Mum­bai, its tech­nol­ogy hub, Ben­galuru, Bangladesh’s cap­i­tal Dhaka, Pak­istan’s fi­nan­cial heart, Karachi, as well as swathes of Nepal and In­dia’s eastern states of Bi­har and As­sam. In the com­ing decade, dev­as­tat­ing floods are ex­pected to in­crease as changing weather pat­terns worsen risks in the re­gion, cli­mate re­searchers say.

Al­ready floods af­fect more than 9.5 mil­lion peo­ple in the re­gion each year, with GDP worth $14.4 bil­lion and $5.4 bil­lion at risk in In­dia and Bangladesh re­spec­tively, ac­cord­ing to WRI.

In 2016 alone, Asia re­ported losses worth $87 bil­lion from 320 nat­u­ral disas­ter events, the world’s biggest rein­surer Mu­nich Re re­ports. Of this, $77 bil­lion were unin­sured losses.

While vil­lages are more di­rectly hit by droughts, it is cities that bear the brunt of flood-re­lated losses, Jatin Singh, chief ex­ec­u­tive of­fi­cer at pri­vate weather fore­caster Skymet Weather Ser­vices said in a phone in­ter­view.

Thirty-four peo­ple died when Mum­bai ex­pe­ri­enced its worst floods in more than a decade on Au­gust 28 through Au­gust 29, with the hard­est-hit ar­eas re­port­ing as much as 150 mm (6 inches) of rain within an hour, ac­cord­ing to fore­caster Ac­cuWeather. On Au­gust 31 in Karachi, 23 peo­ple were killed when the city was swamped by 48 mm of rain.

Mean­while, two rounds of flood­ing in Bangladesh this year added to its im­port bill af­ter the govern­ment was forced to bring in 1.5 mil­lion tons of rice af­ter six years of self-suf­fi­ciency.

Flood­ing ac­counted for 47 per cent of all weath­er­re­lated global dis­as­ters be­tween 1995-2015, the United Na­tion’s of­fice for disas­ter risk re­duc­tion said in a re­port. Of the 2.3 bil­lion peo­ple af­fected, 95 per cent were in Asia. In a re­gion that houses three of the world’s 10 most-pop­u­lated coun­tries -- In­dia, Pak­istan and Bangladesh -the cost to lives and liveli­hoods adds up.

Ab­sence of re­siliency plan­ning by gov­ern­ments in pub­lic in­fra­struc­ture projects, fuel sup­plies and elec­tric­ity dis­tri­bu­tion net­works sug­gest that prob­lems aris­ing out of changing weather pat­terns are likely to con­tinue to pose sig­nif­i­cant threats, ac­cord­ing to Sid­dharth Goel, a se­nior an­a­lyst at Con­trol Risks. While com­pa­nies in South Asia aren’t known to have re­aligned in­vest­ment plans be­cause of weath­er­re­lated dis­rup­tions, more man­agers are try­ing to un­der­stand flood-re­lated risks to cut losses, Goel said.

Most of th­ese are in­fras­truc­tural risks, in­clud­ing elec­tric­ity and tech­nol­ogy back­ups for com­pa­nies, costs of re­pair­ing dams, roads, em­bank­ments for gov­ern­ments and the pro­vi­sion of flood re­lief, said Arivu­dai Nambi Ap­padu­rai, se­nior re­searcher at WRI.

Ap­padu­rai, who stud­ied the 2015 floods caused by 17 days of con­tin­u­ous rains in his home town Chen­nai and this year’s floods near Nepal’s cap­i­tal Kath­mandu, said plan­ners need to adapt by changing the way cities build in­fra­struc­ture.

“How can we blame only cli­mate change when our storm drains are clogged?” Ap­padu­rai said by phone from Chen­nai. “And all of th­ese risks are ex­ac­er­bated by the un­planned ex­pan­sion of our ur­ban sprawls.”

Lack of city plan­ning means about 130 mil­lion peo­ple, equal to the pop­u­la­tion of Ja­pan, live in slums or in­for­mal set­tle­ments across South Asia, ac­cord­ing to the World Bank. Th­ese set­tle­ments, which of­ten house smal­land-medium sized busi­nesses like the Dhar­avi slums in Mum­bai, suf­fer the worst flood da­m­ages.

With al­most 250 mil­lion more peo­ple ex­pected to live in South Asian cities by 2030, in­vest­ment in cli­mate change-re­silient ur­ban in­fra­struc­ture is gain­ing new ur­gency. In­dia, Bangladesh and Nepal are cur­rently in­vest­ing more than $32 bil­lion on build­ing 78 wa­ter projects to com­bat flood­ing, ac­cord­ing to BMI re­search.

With once-in-a-100year freak weather events now tak­ing place ev­ery three-to-four years, pol­icy mak­ers and cen­tral banks must fac­tor in cli­mate risks when for­mu­lat­ing plans, said Raghu­ram Ra­jan, In­dia’s for­mer cen­tral banker, in an in­ter­view.

“It’s time pol­icy mak­ers take th­ese risks into ac­count,” Ra­jan said. “They ab­so­lutely should.”

Floods hit over 9.5m peo­ple in the re­gion each year, with GDP worth $14.4b and $5.4b at risk in In­dia and Bangladesh

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