Tuesday, May 12, 2015

DISASTER ECONOMIC COST...RISING INCOME IN-EQUALITY

Economic cost of the society across the globe is increasing simultaneously with the increase of income in-equality and we are entering into a phase death of the global economy. We are already having prolonged financial crisis, slow down of GDP growth followed with austerity measures and over above the economic cost due to natural calamities. I am not discussing here about the incident of Nepal and its economic cost. I am discussing about the broader picture of the global economy where natural disaster are creating huge economic cost and creating income in-equality among the people across the globe. The point of focus would be income in-equality growing form the natural disasters. The surprising part of this story is that we are creating such natural disasters and capitalist community is ignorant or rather has closed their eyes. Only a handful number of people are raising their voices on the same.

Let’s get into real life stories of few past incidents of natural disaster, their effect on economic cost and widening gap of income in-equality.

·         On September 18, 2003, the family was at home waiting for Hurricane Isabel. It came and blew off the normal life of the people. The family had flood insurance and qualified for assistance from the Federal Emergency Management Agency (FEMA), they still had to take out a loan to cover the cost of rebuilding. The damages to the house alone cost well over $50,000, and that didn't include the additional expenses of rebuilding their lives. They had to repair the walls where the water splashed above three feet, buy new household items, pay for temporary housing, and re-landscape the yard. They had lost nearly everything. The loan surged and they had nearly nothing left to carry on except the tiny job which survived them for paying loans. At that point of time a report from the Munich-Re, the world’s largest re-insurance agency, reports that disaster-related economic losses topped US $145 billion in 2004, up from $65 billion in 2003, for about the same number (650) of natural disasters in each year, making 2004 the most expensive year to date.
·         In another segment I find that between 1994 and 2013, EM-DAT recorded 6,873 natural geophysical disasters (earthquakes, tsunamis, volcanic eruptions and mass movements) worldwide, which claimed 1.35 million lives or almost 68,000 lives on average each year. In addition, 218 million people were affected by natural disasters on average per annum during this 20-year period.

·         The burden of economic cost only takes calculation of the cost borne by Insurance and government pocket whereas the cost of families taking additional loans and not able to pay back those loans and particularly when there is an extensive slowdown in the economy like now.


·         We don’t take account that when disaster strikes despite of support from the insurance companies many things are left uncovered which takes time and huge cost to amend the same. Moreover if there is loss of life then its takes huge toll on the families.

·         Coming to the part of income in-equality in my research I have found and I don’t want to name that many families lost their sole bread earner and due to which they have to take prostitution and other low level jobs. This is not covered under the economic cost of losses when they are being calculated.

·         Income in-equality is driving down the societies in deep problems. Inflation spooks up which also increase the burden of living for the people. Crop insurance and others takes an huge toll which creates problems in the long term. Fertility of the soil etc also creates huge impact on recovery of the same levels.

The Arctic Circle has been very much active on the minds of readers about the slow depletion of the ice. I am surprised that developed economies gives thousands words of speeches under climate conference but they themselves are busy in creating assets for the capitalist at the cost of climate. The recent approval of Obama administration gave conditional approval to allow Shell to start drilling for oil off the Alaskan coast this summer is perfect example. We are already having abundant oil and the demand is also not so high and even if it increases in the nearby time production is adequate to take care of the same. A country like India who is focusing aggressively on alternative energy compared to that I don’t find the logical matrix behind the capitalist mind for drilling oil form the Arctic circle.

·         The effects of drilling oil would be that the acoustic disturbance form noise of setting up the infrastructure would create problem for marine mammals as underwater noise would affect, migration, feeding, mating and other important functions in whales, seals and walrus.

·         The oil spill threat is the biggest and this is bound to happen and will pollute the sea and other living beings there. We have strong memory about what happened previously Gulf of Mexico's Deepwater Horizon just 5 years before.

·         According to a new study by scientists at Scripps Institution of Oceanography finds that the Arctic sea may go ice free in the summer faster than previous models had projected. Somehow climate deniers took this to mean something completely different.

·         According to the National Oceanic and Atmospheric Administration scientists there was less ice in the Arctic this winter than in any other winter during the satellite era. Arctic is returning to a warm period with the overall trend over the decades continuing to show temperatures getting hotter and ice melting faster. Earthquakes and Tsunami warnings are going to create havoc situations due to the after affect of ice melting and sea level increasing faster. Researchers have noted that polar bears may very well be incapable of surviving on land on geese eggs.

·         According to the National Oceanic and Atmospheric Administration scientists Arctic would have entirely ice-free summers by 2040 which is just 25 years from now.


·         Capitalism should have a limitation and everywhere the same theory cannot be implemented. We need to understand the just doing summits of environment would not resolve the issues.

The point research is that what legacy we will keep for the next generation. We have already given them one of the worst lives of unemployment, poor education as parents are unemployed and hence can pay for better education and burden of debt which will never end. Moreover we are giving them life of earthquake, pollution full air, high sea level and no ice to skate on.

Now another part of story of economic cost is that we have taken only natural calamities as a part of the economic cost. What about those cost which insurance companies and families takes due to increase of diseases. The increases of diseases due to high level of insecticides and pollution have increased the cost of the government and cost of the insurance companies. I will not be surprised that down the lane if there is a catastrophic natural disaster insurance companies would file for bankruptcy.


The conclusion is that we need to be educated about the nature and its preservation. If we violate the nature’s rules be prepared to pay for the same. Economic cost is simply becoming out of control in the near time. Income in-equality is driving people wide enough where crimes will grow in the next generation level. We need to understand the about what we will keep for our next generation. Well the problem for the people become more catastrophic when the government of these countries are not well prepared for the same.

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