The interplay between socio-economic crises and disaster risks: Examples from the developed and developing world
Regardless of the origin, financial and socio-economic crises feature combinations of adverse conditions: lack of access to financing/credit, slump in investments, household demand and consumption, a falling GDP, high deficits and debt ratios, loss of income, unemployment, shrinkage of state provisions, poverty, enforced migration, homelessness, and an incapacity to satisfy basic needs. These translate into losses for collective and private agencies in the crisis community. The systemically interrelated losses are not only financial and economic but also physical, human, social, and political (e.g., loss of trust in political leadership). Each agency that suffers losses experiences an increase in vulnerability because vulnerability, by definition, is a susceptibility to loss. Resilience is also badly affected as a result of the crisis impacting properties through redundancy, robustness, diversity, self-sufficiency, autonomy, and flexibility.
Therefore, communities faced with socio-economic crises are simultaneously faced with a higher vulnerability and lower resilience. Thereby, disasters become high-probability events, even in the case of low-intensity hazards. The reverse is also true: High disaster risks (DRs) incubate socio-economic crises. This is evident in the case of slow-onset disasters related to critical resource scarcities which are systemically interconnected (e.g., water, fertile land, and food). DRs such as drought, desertification, and famine may trigger market speculation on scarce resources, rising prices, a decline of dependent economic sectors, a fall of GDP and income, an incapacity to satisfy basic needs, a disruption of social cohesion, and even armed conflicts. The basic reason DRs translate into socio-economic, and even geopolitical crises, lies with scarce resources being multiple necessities: input for socioeconomic sustainability, means to reduce exposure to the hazard of resource depletion, and assets for resilience building.
Case studies of developed (Greece) and developing countries (Somalia) test theoretical hypotheses and illustrate the ‘switchover’ processes from socio-economic crisis to reinforced DRs and vice versa. Both cases are evidence of a perpetual interplay between DRs and socio-economic crises. Breaking the vicious cycle requires (a) comprehensive policy packages integrating anti-crisis measures with DRR, (b) correction of risk misperceptions and (c) control of vulnerability and resilience dynamics that grow stronger in crisis periods. Establishment of Risk Observatories may prove to be an important step forward.
This paper is a contribution to the 2019 edition of the Global Assessment Report on Disaster Risk Reduction (GAR 2019).
To cite this paper:
Sapountzaki, K. The interplay between socio-economic crises and disaster risks: Examples from the developed and developing world. Contributing Paper to GAR 2019