Economic evaluation of Nepal Earthquake (2015)

1. Economic evaluation of
Nepal Earthquake (2015)
Gursharanjit Singh
Rupa Ramachandran
Samridhi Nigam
Soundarya Venkatachalam
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2. Contents
• Introduction
• Effects of natural disaster
• Types of damage
• Factors affecting the impact of natural disaster
• Nepal and its economy
• Nepal earthquake and its aftermath
• Financial instrument
• Economic impact of earthquake
• Suggestions
• References
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3. What is disaster?
According to EM-DAT, an event is said to be a disaster if it has
the following characteristics.
• More than 10 people killed
• More than 100 people affected
• Emergency declared
• Call for international assistance
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4. Effects of natural disasters
Short run
• 0-3 years
• Physical destruction
• Disruption of utilities
• Emotional damage
• Social consequences
Long run
• More than 5 years
• Difficult to determine
• Damage to local economy due
to destruction
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5. Types of damage
Direct damage
• Assets
• Buildings
• Agricultural lands
• Historical sites
Indirect damage
• Productivity
• Economic activity
• Food security
• Access to healthcare
• Access to essentials
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6. Factors affecting the impact of natural
disaster
• Population size
• Geographic location
• Political factors
• Economic factors
• Resource allocation
• Infrastructure
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7. Nepal
• South Asia
• Borders with India and China
• In Himalaya range
• Has Hills, Mountains, terrain
• No plains
• Developing country, Ranked
145th on Human development
index 2014
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8. Economy of Nepal
• Least developing country
• Long term political turmoil – Delay in economic development
• 40% unemployment rate
• GDP ($19 Billion in 2012) - Smaller than any state in USA.
• 33.7% agriculture (use 75% of workforce)
• 52.2% services such as tourism , hotel , restaurants
• 14% Industries such as manufacturing
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9. 9

10. Nepal
earthquake
• 25th April and 12th May 2015
• 7.8 and 7.3 Richter scale
• Epi-centre – Less than 50 miles
north-west of Kathmandu
• Depth – 11km/6.8 miles
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11. Aftermath
• 8,790 killed
• 22,300 injured
• 498,852 houses destroyed
• 256,697 houses partially damaged
• Thousands of schools and other public buildings destroyed
• Millions displaced
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12. Aftermath
• Less than 5 percent: Percentage of homes rebuilt so far
• $6.6 billion: total estimated cost for reconstruction
• $4.1 billion: amount pledged so far in donations
• $308,880: total funding Nepal has offered for reconstructing
homes
• 661: number of Nepalese families who have received
reconstruction funding
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13. Economic impact
• Tourism affected
• Clean water and sanitation disrupted.
• Scarcity of food and agriculture fields were damaged.
• Health care facilities, medical care were damaged.
• Health and Education infrastructure system was severely
damaged.
• Infrastructure services like electricity and telecommunications
were severely damaged.
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14. Major figures
• 8,856: Number of deaths
• 22,309: Number of injuries
• 602,257: Number of houses destroyed
• 185,099: Number of houses damaged
• 6,430: Number of government buildings damaged
• 35,000: Number of classrooms destroyed
• Nearly 1 million: Number of children left with no school
• 9.1 million: Total number of school-age children in Nepal
• 956: Number of hospitals and clinics damaged
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15. Figures
Number of people pushed into poverty by
the earthquake700,000
Number of people receiving humanitarian
aid
3.7
million
Number of families who lived in high-
altitude temporary shelters through winter200,000
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16. Financial instruments
• Quantify the risk – Risk assessment – Natural disasters are low
frequency and high risk
• Use computer aided technology to track natural events – Develop a model
based on the observation
• World bank – supports many catastrophic risk insurance – Ex :
Turkey , Catastrophic insurance pool – Insurance to middle income
households – Funded by WB
• Catastrophe insurance – Provided for people who are a part of catastrophic
insurance pool
• Property catastrophe insurance programs for homeowners
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17. Most of the national insurance
catastrophic program
• Focus on the disaster
• Regional aspect
• Provide coverage for dwellings and contents
• Premium rates reflect the characteristics of the risk
• No direct government subsidy
• Encourage safer construction practices
• Reply on distribution and servicing capabilities of the private
insurance
• In low and middle income countries – There is an inadequate
development of domestic insurance market
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18. Suggestions
• Develop hazard map showing earthquake risk zones
• Using construction techniques that are shock resistant
• Instituting incentives to remove unsafe buildings and buildings on
unsafe sites or, more probably, to upgrade their level of safety.
• Ensuring that future development is on safer sites and apply safer
methods of construction through abiding by:
• Land use controls (zoning).
• Building Codes and standards and means of enforcing them.
• Favourable taxation, loans, or subsidies to qualify buildings, methods and
sites.
• Land development incentives.
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19. • Reducing possible damage from secondary effects by:
• Identifying potential landslide sites and restricting construction in those
areas.
• Installing devices that will keep breakages in electrical lines and gas mains
from producing fires.
• Verifying the capability of dams to resist earthquake forces, and upgrading as
necessary.
• A high percentage of losses in earthquakes is due to failure of non-
structural elements such as ceilings, windows, doors, partitions,
cupboard and shelves, external cladding, electrical and mechanical
systems, and other components of buildings. Non-structural
components comprise 60-80% of the cost of the building.
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20. Referenes
• Cummins JD, Mahul O. (2009). Catastrophe risk financing in
developing countries: principles for public intervention. The World
Bank: Washington DC.
• Cavallo E, Noy I. (2010). The economics of natural disasters: a
survey. IDB working paper series No. IDB-WP-124.
• CDEMA Earthquake Readiness - Earthquake Damage Reduction.
Weready.org. Retrieved 9 March 2017, from
http://www.weready.org/earthquake/index.php?option=com_conte
nt&view=article&id=16&Itemid=53
• A list of some effects from Nepal's earthquake 1 year ago. Mail
Online. Retrieved 9 March 2017, from
http://www.dailymail.co.uk/wires/ap/article-3551129/A-list-effects-
Nepals-earthquake-1-year-ago.html
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21. Thank you
:)
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