In the battle against natural disasters, forward-thinking macroeconomic policy can help countries prepare for and mitigate the eventual blow
IMAGES of destruction and grief following Typhoon Haiyan, which hit the Philippines in November 2013, are still fresh in our minds. They summon up similar scenes of devastation following the great south Asian tsunami of 2004 and Hurricane Katrina, which hit the United States in 2005. And the damages are not limited to immediate effects.
The New York Times ran a heartbreaking front-page story in November 2013, describing the plight of a young man in the Philippines who sustained a simple leg fracture after Typhoon Haiyan (Bradsher, 2013). He lay on a gurney in a makeshift hospital, surrounded by his children, for five days awaiting treatment, only to die from an infection.
Not surprisingly, disasters have long-lasting psychological consequences. In addition to the immediate direct human cost, natural disasters often exacerbate poverty and undermine social welfare. Developing economies—and their most vulnerable populations—are especially at risk.
See full Article: http://www.imf.org/external/pubs/ft/fandd/2014/03/laframboise.htm
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