How are disasters linked to inequality? Review of ‘The Disaster Profiteers’

September 18, 2015

     By Duncan Green     

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Debbie Hillier, Oxfam’s Humanitarian Policy Adviser  reviews The Disaster Profiteers: How natural disasters makeDebbieHillier the rich richer and the poor even poorer, by John C Mutter

I really, really wanted to like this book.  As someone who has worked on disasters for some time, in an organisation whose focus is inequality, this seemed like the perfect book.

The basic thesis is that whilst disasters affect everyone, rich countries and rich people are protected by their wealth and can even profit.  Rich countries have more scientists, good early warning systems, better emergency response systems; in the aftermath, an elite few make out-of-sight decisions about rebuilding or not rebuilding, about who will benefit from the lucrative reconstruction contracts.  Poor people live on marginal lands away from productive resources, are more likely to be in debt, do not have savings or insurance, and receive poor government support.  They are politically, socially or economically excluded and hence have little access to resources, influence, information or decision-making power.

Disaster Profiteers_MECH_01.inddThis is not a new argument.  Crises are times when change can happen – as expressed by Milton Friedman, and described very well in Naomi Klein’s powerful book, the Shock Doctrine, which argues that crises open the door to ‘disaster capitalism’ – private companies making good use of the chaos for their own commercial benefit, grabbing money and power.

The book contains some very well-drawn and thought-provoking descriptions of the impact of specific cyclones, earthquakes and tsunamis, and there are also some interesting ideas in here:

  • The book challenges our assumption that disasters are always a bad thing by introducing the idea of Schumpeter’s ‘gale of creative destruction’ – whereby disasters destroy old inefficient capital, clearing the ground for new and better capital, and forcing technology upgrades. And there are examples of this.  But this clearly overlooks the human cost and really only benefits the rich.  And even where this does happen, surely there is an opportunity cost?
  • There are surprising parallels between the official response to Cyclone Nargis in Myanmar (a poor country with a military junta) and Hurricane Katrina in the US (a rich country with a democratic government). In both cases, the authorities downplayed the scale of the event, with inaction stemming from a deadly mixture of indifference, incapacity, and fear. Then they acted defensively, concerned more about mitigating political and reputational damage, and in Katrina’s case, using the social unrest to deflect from bad government performance.  But whilst Nargis was unusual, hurricanes regularly hit the southern US states and there was no forecaster’s error on Katrina.  The real cause of that disaster was much more to do with inequalities, racism and poor disaster risk reduction.
  • The corruption-disasters link is well made. Corruption in the building industry is the leading cause of earthquake mortality, particularly in South Asia, where building codes are violated and inspectors are paid to look the other way.  ‘Yes, buildings collapse because they are poorly built, but to say buildings kill people is like saying that guns kill people, when it is people with guns in their hands who kill people.’
  • Technical appendices show how a disaster’s economic impact depends on how fast or slow the economy is growing. Surprisingly, robustly growing economies – such as India or Brazil – might be the most vulnerable to disasters.

My main frustration with the book was the lack of long term analysis.  The book makes the point that the media focusKatrina cartoon is only on the disaster whilst it is more important to focus on what happens before and after the event, which is absolutely true.  So why is there so little in the book on the long term impacts of disasters?  The one exception is Hurricane Katrina, where the author draws on a vast literature of analysis to show that it is the wealthier – and whiter – neighbourhoods and businesses that are thriving in New Orleans; the poorest, and mostly African-American, areas of town remain vacant.

To really prove (or not) the link between inequality and disasters, what is needed is more study of disaster areas 3 or 5 years on.  For example, six months after the 2010 Haiti earthquake, rich people had started to recover, whereas the poorest people were still losing assets and getting poorer – suggesting increasing inequality. Yet national inequality rates didn’t change between 2001 and 2012, and actually fell slightly in urban areas – so maybe the earthquake didn’t deepen inequality?  What we need is the full picture of the recovery process over several years – who benefited, who didn’t, and how can we ensure that lessons are learned so that the disasters and development communities can design recovery processes that specifically improve equality.

And please, please, can we all stop using the phrase ‘natural disasters’ – the hazard is natural, but – as this book describes very well – the disaster is very much man-made.