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Resilience meets disaster economics

February 6, 2013

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Neal Keny-Guyer

Stanford Social Innovation Review
February, 2013

Investing to stop disasters before they start can save lives and money.

Each January, thousands of leaders—from the private sector, civil society and government—gather in the snowy hamlet of Davos, Switzerland, to participate in the World Economic Forum’s annual meeting. Each year, we wrestle with weighty issues, including global recession, energy crises, and political upheavals.

This year was different. Instead of focusing on the problems of today, we considered how to anticipate and better prepare for the problems of tomorrow. The World Economic Forum calls this concept “resilient dynamism.” I call it smart work that is long overdue.

Global needs for crisis response are increasing. From drought in the Horn of Africa to battering storms in Haiti, natural disasters are becoming common and responding to them can be expensive. At the same time, donor funds are becoming scarce, as the global economic outlook remains gloomy. According to the International Monetary Fund, the global economy grew by just 3.2 percent last year, the slowest pace since the 2009 recession. Growth for this year—in the face of lagging recovery in the United States and Europe, and even slowdown in emerging markets—does not look much stronger.

This confluence of circumstances should drive a change in how the world funds crisis response. It is cheaper and easier to deal with a disaster if devastation is mitigated or even prevented in the first place. Yet the UK’s Department for International Development (DFID) notes that in the 20 countries that received the most humanitarian aid over the last five years, only 1% of the $150 billion spent went toward helping people prevent and prepare for disasters.