With the devastation caused by Tropical Cyclone Pam, progress in developing the small island state of Vanuatu has been wiped out. Focus is now rightly being placed on getting immediate relief to people suffering, and on rebuilding. But once the headlines disappear and the aid workers board their last plane home, then what?
Our research shows that tropical cyclones, like the one that hit Vanuatu, change the way investments are made, slow development, and leave an imprint on the economy for decades.
That means that while the progress made by negotiators at this week’s U.N. disaster risk reduction conference in Sendai which aims to reduce immediate risks and impacts of disasters is crucial and necessary, policies should also focus on long-term development. Otherwise, children born today could still be paying the cost 20 years from now.
Economists have long believed that disasters boost an economy because of the influx in investments. Our research shows the opposite: a country’s income declines after a cyclone strikes and does not recover even after two decades.