UN: $2.5 trillion in disaster losses since 2000

UNITED NATIONS –  Economic losses from disasters since 2000 are in the range of $2.5 trillion, a figure at least 50 percent higher than previous international estimates, according to a U.N. report released Wednesday.

The U.N. Office for Disaster Risk Reduction warned in the 246-page report that economic losses from floods, earthquakes and drought will continue to escalate unless businesses take action to reduce their exposure to disaster risks.

U.N. Secretary-General Ban Ki-moon launched the report saying the review of disaster losses in 56 countries clearly demonstrates that "economic losses from disasters are out of control" and can only be reduced in partnership with the private sector.

"Our startling finding is that direct losses from floods, earthquakes and drought have been underestimated by at least 50 percent," Ban said. "So far this century, direct losses from disasters are in the range of $2.5 trillion. This is unacceptable when we have the knowledge to reduce the losses and benefit from the gains."

For too many years, the secretary-general said, financial markets have placed greater value on short-term returns than on sustainability and resilience, which in the long-term are far more attractive and can save millions of dollars.

"In the years ahead, trillions of dollars will be invested in hazard-exposed regions," Ban said. "If that money fails to account for natural hazards and vulnerabilities, risk will increase. Where such spending does address underlying risk factors, risk will go down."

The report said recent major disasters such as Hurricane Sandy in 2012, the 2011 floods in Thailand and the 2011 Japanese earthquake and tsunami put a spotlight on the growing impact of disasters on the private sector.

The report says increasing globalization, the search for lower costs and higher productivity, and quick delivery "are driving business into hazard-prone locations with little or no consideration of the consequences on global supply chains."

For example, it said Toyota lost $1.2 billion in product revenue from the Japanese quake due to parts shortages that caused 150,000 fewer cars to be manufactured in the United States and a 70 percent reduction in production in India and a 50 percent reduction in China.

On the other hand, Orion, which owns and operates one of the largest electricity distribution networks in New Zealand, invested $6 million in seismic protection that saved the company $65 million in the 2010 and 2011 earthquakes, the report said. And preventive investments by fishermen in Mexico saved each individual entrepreneur US$35,000 during Hurricane Wilma in 2005, it said.

But Margareta Wahlstrom, the U.N. special representative for disaster risk reduction, said: "In a world of ongoing population growth, rapid urbanization, climate change and an approach to investment that continually discounts disaster risk, this increased potential for future losses is of major concern."

A new global risk model developed by the U.N. office demonstrates that average losses just from earthquake and cyclonic wind damage are expected to be about $180 billion per year throughout this century — and this figure doesn't include damage from floods, landslides, fires and storms, the report said.

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On the web: www.unisdr.org

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Greek markets recover losses from Cyprus crisis

ATHENS, Greece –  Shares on the Athens Stock exchange rebounded Wednesday from heavy losses suffered over Cyprus' financial crisis, as a political spat erupted in Greece over whether the government is being too compliant with demands by its own rescue lenders.

Banking stocks rose nearly 5 percent, as the general share index closed up 0.8 percent higher at 930.73.

The market had slumped on Tuesday, with bank share loses nearing 10 percent, in the first trading session since it was announced early Saturday that Cyprus would raid bank deposits to fund its bailout.

Cyprus' parliament later rejected such a confiscation of deposits — touching off a political dispute in Greece, which is struggling to implement harsh austerity measures linked to its own bailout program.

The left-wing opposition in Greece called for the resignation of officials in their country's conservative-led government involved in handling the Cyprus crisis. The government ignored the demand.

"This is a message to our government, which votes 'yes' to everything and has destroyed the country by doing so," Zoe Konstantopoulou, a lawmaker from the left-wing Syriza party, told parliament. "Cyprus has taught you a lesson: that the word 'no' also exists in our vocabulary," he said.

Greece has been surviving for the past three on rescue loans from other eurozone countries and the International Monetary Fund in return for draconian deficit-cutting measures that have hammered public support for the country's mainstream political parties along with its economy — putting nearly 1 million people out of work.

"Cyprus' parliament's decision has exposed the Greek government which advocates that that there are no other alternatives ... And it shows that there is room for negotiation," prominent Syriza lawmaker Rena Dourou, who is on a fact-finding trip to Cyprus, told The Associated Press.

"We have consistently held the view that Europe's crisis is systemic and concerns its integration — and that's how it should be dealt with."

German Chancellor Angela Merkel said she regretted the decision by Cypriot lawmakers to reject the plan to contribute to the bailout package by seizing people's bank savings, but the vote was applauded in Greece.

"Cyprus dares to say no to Germany," the conservative daily Eleftheros Typos headlined, while an opinion poll for private Alpha television found 75.6 percent of Greeks backed the "no" vote in Cyprus.

"Cyprus has shown that it is much better at negotiating than we are in Greece," said Dimitris Mardas, an associate professor of economics at the University of Thessaloniki. "They haven't taken any unilateral action, but they are looking for a better outcome. So politicians here could learn something from them."

Greek government officials argued that Greece's bailout packages worth €240 billion ($310.7 billion) could not be compared with that proposed for Cyprus, worth some €10 billion ($12.9 billion).

"The causes of the crisis in Cyprus and the crisis in Greece are not the same," said Greek government spokesman Simos Kedikoglou. "We must be realistic and look for solutions. Politics — it must be remembered — is the art of the possible."

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