Make disaster mitigation a part of the relief and rehabilitation package

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: This is the moment to reform relief, to make it effective in financing disaster losses in India. In the past 35 years, India has suffered direct losses of $30 billion. The most effective way to cut these is to reform relief in favour of effective financing of losses. The upcoming tsunami rehabilitation package can be the first to do so.

Officially, direct losses of property and infrastructure suffered due to floods, droughts, cyclones or earthquakes over the past 35 years amount to up to 2% of India’s GDP and up to 12% of the government’s revenues, according to the World Bank. When actual losses are accounted for, which includes losses not reported by individuals and institutions working in the informal sector of the economy, as well as losses suffered from small and local disasters, this figure would be at least double. Financing disaster losses can be made more effective by encouraging disaster mitigation as part of the relief package.

Infrastructure is usually most affected by disasters. And when it collapses, as it did due to the tsunami, there are lesser resources to replace it. Current budgets bend backwards to carry the heavy load of relief but remain inflexible to spending on mitigation. The expected acceleration of India’s economic growth due to increasing investments in infrastructure may be difficult to achieve because sound investments avoid exposure to unmitigated risk.

India’s poor suffer loss of shelter, access to basic services like water and sanitation, benefits of education and health, and also livelihoods due to natural disasters. A disaster such as this tsunami pushes them back to the poverty levels from which they try to move out. Gains made from decades of anti-poverty programmes are lost in a day. It takes five years to make a micro-credit self-help group become viable in coastal India. A tsunami busts the group’s business plan forever.

Providing immediate relief even when it is ineffective, slow, unaccountable, and expensive, is commonly accepted and widely promoted. But risk mitigation, which would reduce the need for immediate relief, is not on the public agenda.

Disaster Mitigation Institute, Ahmedabad, set up a Livelihood Relief Fund after the 1998 Kandla cyclone. This has provided ex-post support to 11,000 earthquake and riot-affected small businesses and other economic units in Gujarat. Results show that such funds make recovery faster, wider, and more sustainable.