Disaster-prone Vietnam faces huge growth risks: report

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Current urbanization trends need to be reversed, experts say

 
  People stand on a broken dyke of the Mekong River in An Giang Province September 28, 2011. Vietnam is among the countries facing a high risk of natural disasters and other environmental impacts reversing its development gains. Photo: Reuters

In a double whammy, two separate reports released Wednesday warned natural disasters and environmental threats could hinder development and significantly reduce living standards in Vietnam and regional countries.

The reports are: the Natural Hazards Risk Atlas 2012, prepared by the UK-based global risk and strategic consulting firm Maplecroft; and the Asian Development Bank's Key Indicators for Asia and the Pacific 2012.

Vietnam is among Maplecroft's list of ten countries most at risk in its Natural Hazards Relative Economic Exposure Index, along with five other Asian countries Bangladesh, the Philippines, Myanmar, India and Laos.

These ten countries are considered to have the greatest proportion of their economic output exposed to natural hazards.

"In addition, they also demonstrate poor capability to recover from a significant event exposing investments in those countries to risk of supply chain and market disruptions," said the report, which assesses natural hazards risks in 197 countries.

It said that these countries, including some of the "most important growth economies in the region" have the highest financial risk from the threat of natural hazards, due to the high exposure of their cities and trading hubs to natural events like flooding, earthquakes and tropical cyclones.

It warned of business interruption costs, infrastructure damage and worsening societal unrest, food security, corruption, breakdown of the rule of law and even increased political risk.

"High exposure to natural hazards in these countries are compounded by a lack of resilience to combat the effects of a disaster, should one emerge," Maplecroft's Head of Maps and Indices Helen Hodge said in a statement on the launch of the report.

According to Maplecroft, these countries may take years to "bounce-back" from a natural disaster that is as destructive as the Japan's 2011 earthquake.

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"As the global influence of emerging economies increases, the importance of their inherent natural hazard exposure will have wider and deeper global implications," said Hodge.

"The test for emerging and developing economies is to build a stronger capacity to meet the challenge of hazard prone environments. Failure to do so will risk their ambitious economic growth when the inevitable natural hazards strike," she said.

The Germany-based reinsurance company Munich Re estimated economic losses due to natural disasters for 2011 at US$380 billion, with the March 2011 earthquake and tsunami in Japan accounting for approximately 55 percent of the total.

Koos Neefjes, senior advisor on climate change at the United Nations Development Program (UNDP) Vietnam, told Vietweek that rankings of countries for climate vulnerability or climate change vulnerability are a bit tricky, because every index can be challenged.

"But Vietnam always comes out as amongst the more or most vulnerable countries," he said.

Degrading environment

On Wednesday, the Asian Development Bank (ADB) also warned against more risks facing Asian countries with prospects of a rapidly degraded environment.

In its Key Indicators for Asia and the Pacific 2012 annual statistical publication, ADB examines the challenges and opportunities associated with the region's "breakneck urban boom" and calls for measures to turn these cities into "environmentally sustainable, inclusive growth centers."

The report said Asia has topped the world in urbanization speed since 1980s and the region has become home to almost half of all the world's city dwellers.

"This breakneck expansion has been accompanied by a sharp rise in pollution, slums, and widening economic and social inequalities which are causing rapid environmental degradation," the bank said in a statement Wednesday.

The report warned that more 400 million people in Asians cities will face risks of coastal flooding and roughly 350 million would be at risk of inland flooding by 2025.

"Unless managed properly, these trends could lead to widespread environmental degradation and declining standards of living," it said.

The report also struck an optimistic note saying critical masses of people in relatively small areas could make it easier and less costly to supply essential services like piped water and sanitation.

Rising education levels, factories leaving cities, the growth of middle classes and declining birth rates associated with urbanization could also have beneficial impacts on resource use and the environment, it added.

It said policymakers need to promote "climate resilient cities" to prevent disasters like the 2011 Bangkok floods.

Changyong Rhee, ADB's Chief Economist, said the challenge facing Asia is to put in place policies that will reverse the current trend of rapid, haphazard urbanization and "facilitate the development of green technology and green urbanization."

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