Just a minute speech on Natural disasters and their impact on economic growth
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Answer:
RISK & INNOVATION
The Impact of Natural Disasters on the Global Economy
OVERVIEW
While most natural disasters are fairly local in their impact, the worst can change the planet. The 1815 eruption of the Indonesian volcano Tamora pumped so much sulfur into the atmosphere that the world’s temperature dropped by 2 degrees Fahrenheit (1 degree Celsius) for two years afterwards. The March 2011 earthquake in Japan even shifted the earth’s axis, shortening the length of the day.
The economic impact on the world can be just as profound. The 2005 Atlantic hurricane season saw a record 28 storms, including seven major hurricanes. Hurricane Katrina took the headlines as the most expensive tropical cyclone in history by both economic and insured losses, but the season as a whole caused aggregate economic losses of US$209 billion, equal to the seventh most costly year on record for natural disasters.
Beyond the headline costs are the potential chain reactions of negative economic impacts to countries around the globe. With every region at risk of natural disasters, and supply chains and markets increasingly worldwide, it is becoming ever more important for businesses to develop robust disaster plans to reduce the potential impact. But to work out disaster plans, the starting point is to understand what that impact could be – and how events far from your core operations could hit your business.
Explanation:
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This finding suggests that after a flood, damaged production capabilities are offset by increased investments in assets and increased labor. Overall, these empirical studies suggest that the indirect effects of natural disasters significantly reduce economic growth, especially in low-income countries.
Disasters increase scarcity and reduce the output of economies. In simplest terms, inputs are necessary for outputs; fewer inputs means fewer outputs. When a disaster damages or destroys resources – whether labor, capital, or natural resources – total production in the economy must fall.