EghtesadOnline: Severe flooding that hit Iran in March and April was the world's ninth costliest weather disaster of 2019, according to insurance broker Aon (formerly called Aon Benfield).
It cost the country $8.3 billion in economic losses and $200 million in insured losses sustained by private insurers and government-sponsored programs, while claiming the lives of 77 people, the report reads.
The Earth was besieged in 2019 by weather disasters that inflicted losses worth $40 billion, tying with 2018 for the fourth-highest inflation-adjusted number of billion-dollar weather events on record, Financial Tribune reported.
The combined economic losses (insured and uninsured) from all 409 weather and earthquake disasters cataloged by Aon in 2019 were $232 billion.
The great bulk of the 2019 total came from weather-related disasters ($229 billion of the $232 billion), which was 17% above the 2000-19 inflation-adjusted average; 2019 ranked as the eighth costliest year on record for weather-related disasters.
In fact, the period was the costliest decade for natural disasters among the three decades in the Aon database.
From mid-March to April 2019, widespread flash flooding affected large parts of Iran, most severely in Golestan, Fars, Khuzestan and Lorestan.
The first wave of rain began on March 17, leading to flooding in two northern provinces, Golestan and Mazandaran, with the former receiving as much as 70% of its average annual rainfall in a single day.
Seyyed Mohammad Mousavi, the head of Disaster Management Department of Agriculture Ministry, recently said up until Feb. 3, a total of 17,861 billion rials ($132 million) have been paid as loans and grants to farmers in provinces hit by flooding in March-April 2019, ILNA reported.
Prone to Natural Disasters
Statistics show that only 3% of Iran are located in areas with a low probability of disasters.
Iran is exposed to 32 out of 43 natural disasters, the most common of which are drought, earthquake, flood, wildfire and landslide.
The Crisis Management Department says 75% of Iran’s population centers (geographical points that describe a central point of the region’s population) are exposed to flooding hazards and 80% of the country’s area are prone to other natural disasters like earthquake, the Persian newspaper Shahrvand reported.
Earthquake caused the highest number of human deaths in the country while flood and drought have incurred the biggest economic losses for Iran. In addition, the acceleration of climate change over the past few years is likely to make natural disasters even more frequent and more catastrophic.
Explaining Iran’s disproportionate vulnerability to natural disasters, Ali Beitollahi, the head of Engineering Seismology Department of Roads and Urban Development Research Center, said, “Over the past decades, our executive managers had been negligent in taking proactive policy approaches in the face of natural disasters. Advanced, short-, mid- and long-term planning is needed instead of post-disaster response to counter natural disasters.”
Beitollahi gave the example of Japan where infrastructures have been improved to direct rising water level of rivers to canals for preventing street flooding.
“In the absence of disaster prevention and preparedness like the dredging of Gorganroud river in northeastern Iran to facilitate and speed up the outflow of water, floods caused extensive damage to the country in spring,” he said.
A report by IMF entitled "Macroeconomic Outcomes in Disaster-Prone Countries" published in October 2019 categorized Iran among first quartile (0%-25%) of the annual probability distribution of natural disasters in non-disaster-prone countries.
Iran’s economic costs of natural disasters were equivalent to 0.27% on average and a maximum of 2.9% of the country’s GDP during 1998-2017.
The macroeconomic impact of natural disasters includes three stages. The first stage involves direct losses from the destruction of infrastructure and property. In the second stage, indirect losses accumulate from foregone output and incomes, and costs are incurred as individuals and businesses work around disruptions.
Finally, as the recovery starts, rebuilding of infrastructures and replacement of damaged goods give a temporary boost to activity and employment in the affected area. It also opens up the opportunity to upgrade infrastructures.
Apart from the cycle of impact and recovery from individual disasters, the periodic destruction of part of a country’s productive assets is an implicit tax on capital, which tends to deter investments and lower productivity and living standards on a sustained basis.