Natural Disasters Bring Huge Losses and Profits Simultaneously

Reports about natural disasters happening on the globe appear almost every day. Cataclysms claim thousands of human lives and cause enormous damage to economies. However, specialists say that some people derive profit from such catastrophes.

Two days ago people found themselves absolutely helpless again when a strong earthquake struck the southwest of China. Practically all buildings and roads were destroyed in the town of Jiegu. At least 617 were killed, over 300 are missing, about 9,200 were injured.

The damage, which the quake caused, has not been evaluated yet, but the Chinese authorities said that they will assign 200 million yuans ($29.3 million) for recovery efforts.

Other recent mammoth earthquakes took place in Chile and Haiti. TV channels were showing hungry children looking for their parents and adults ready to slay each other for a box of biscuits.

In Haiti, over 3.5 million people received food help, about one million people were provided with temporal places of living, over 500,000 were vaccinated against infectious diseases. These are just a few results of the activities conducted by the United Nations Organization.

In addition, Haiti will receive nearly $10 billion during the upcoming ten years. The disaster-stricken and impoverished nation will also receive the additional $5 billion for the liquidation of the consequences of the mammoth quake.

Nearly 50 countries announced their readiness to help Haiti. Venezuela promised to assign $2 billion, the EU- $1.6 billion, the USA - $1.15 billion. The association of non-governmental organizations in the USA promised $500 million, Canada - $390 and the World Bank - $479 million.

According to the UN, earthquakes hold the largest death toll – 60% in all natural disasters that struck Earth during the recent ten years. Storms, hurricanes and extreme temperatures (droughts and frosts) follow with 22 and 11 percent of human losses respectively.

One of the deadliest natural disasters that occurred from 2000 to 2009 is the South Asian tsunami of 2004, which affected several countries on the coast of the Indian Ocean and killed over 226,000 people.

Cyclone Nargis struck Myanmar in 2008 caused 138,000 fatalities. The earthquake in China’s Sichuan claimed the lives of over 87,000 people the same year. The quake in Pakistan in 2005 killed 73,000, whereas extreme heat in Europe in 2003 killed more than 72,000.

Winter storm Xynthia ravaged Europe on February 26-28, 2010 and became one of the strongest storms in 20 years. It caused the damage of one billion euros.

The number of natural disasters has increased recently too. There were approximately 385 disasters a year during the 200s, whereas the number was smaller during the 1990s – 258 a year and 165 a year – during the 1980s.

The most dreadful natural disaster in the history of the human civilization is the Chinese flood in 1931, which killed from one to four million people.

The 3,852 natural disasters, which took place during the recent ten years, killed nearly one million people and injured over 2 billion. The economic damage that the cataclysms caused during the decade is evaluated at nearly $960 billion.

“Any natural disaster is a test for the economy, the state structure, the infrastructure and public relations. It is not the first time when the Chinese authorities face the problem of liquidating the consequences of earthquakes and they have succeeded a lot at this point. There is no national catastrophe in China, although the life of every human being is priceless, of course. Now the government will have to recreate roads, buildings and communications, which implies huge spending. It will obviously affect the nation’s economy, although China has another opportunity to demonstrate its modernization abilities to the whole world,” Ilya Rykhlov, general director of Gulf Stream Company said in a interview with

Analysts of Kalita Finance Group said that it is extremely hard to evaluate the influence of force majeure circumstances on the world economy.

“Second World War, for example, gave the USA an opportunity to become the world’s largest economy. Nevertheless, natural disasters and cataclysms affect the world negatively. As for the recent events, earthquakes and hurricanes in the Americas result in the growth of prices on natural resources extracted in the region. The prices on oil and copper grow, which is good for exporters and bad for importers,” an expert said.

Sergey Gorev of UFS Investment Company also believes that natural disasters affect the lives of common people only negatively, although from the economic point of view they create prerequisites for gradual economic recoveries.

“When the destroyed infrastructure needs to be recreated, people have more job opportunities, builders receive more orders, and the economy gradually recovers,” he said.

Ekaterina Yevstigneeva.

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Author`s name Dmitry Sudakov