Editor's note: Described as one of the worst since 1924 by Chief Minister Pinarayi Vijayan, the rains in Kerala have left over 350 dead and rendered thousands of people homeless. According to the latest tally, 80,000 have been rescued so far. Over 1,500 relief camps have been set up across the state that currently house at least 2,23,139 people. In a multi-part series, Firstpost will attempt to analyse the short-term and long-term impact of these unprecedented floods on the lives of the people, economy of the state, and the environment.
Some economists claim that a natural disaster is a curse that can be turned into a blessing. They argue that tonnes of money pumped into rehabilitation work not only creates more jobs but also ramps up the economy of a calamity-struck region and even makes it a better place than it used to be. This is based on a simple premise: If something is ruined in a disaster, you wouldn't replace it with an exact replica of whatever there was, but you would rebuild a better thing, with better technology and better utility — and something not easily prone to damage by a future calamity.
This is an old premise that acquired a new name during the 2004 tsunami: "Build back better". It also had a new focus: Safety.
'Better' meant 'safer', apart from 'faster'. So the emphasis is now on rebuilding lost infrastructure after a calamity quickly and in ways that will make it disaster-resilient. It's hardly surprising that the Kerala government is now chanting the same mantra in the aftermath of the recent floods. It told the high court on Wednesday that build-back-better was exactly the route it would take to undertake rebuilding in flood-ravaged regions. Chief Minister Pinarayi Vijayan is also talking about a big nudge all this would give the state's economy.
Lessons for Kerala
The rebuilding effort will surely generate jobs in the immediate future, but will that jump-start the economy in the longer term and make the state a better — and safer — place than it was? There is no easy answer to this question, at least for now.
To begin with, these are two separate things: What rehabilitation work can do to a region's economy, and what build-back-better can do to improve upon earlier infrastructure.
As for the former, not all economists agree with the very idea that disaster stimulates growth. This has been a contentious prognosis in a world increasingly susceptible to extreme weather events triggered by climate change. Sceptics consider it either wishful thinking based on skewed data or an overly simplistic view of a web of complex post-disaster economic factors. They argue that the sudden burst of new work that you see after a calamity is only replacing old work that would have happened anyway in normal times.
A year after the 1995 Kobe earthquake, Japan indeed saw an economy boost, but there aren’t too many examples for the growth-after-disaster theory. And the record of success in build-back-better strategies too hasn’t been very encouraging. Forget growth and better infrastructure, even normal recovery from many major disasters such as Hurricane Katrina of 2005 in the US and the Haiti earthquake of 2010 — remarkable if you consider the cataclysmic damage — is only deemed to be partial.
Kerala was in an economic slump even before the floods, and expecting it to soar into stratosphere with flying colours with the help of rehabilitation funds may turn out to be a chimera that Vijayan and others are chasing.
What Kerala can hope for
Past failures must, of course, never discourage future ventures. And not all is lost for Kerala, even though not everything is easy either.
A drop in Kerala's GDP is already being predicted, as is common after major disasters. What's also common is that this GDP fall is usually made up by the huge spending on rehabilitation. Translating this into a real growth in economy may — if it ever happens — take a decade or even longer and is tough. That may also call for measures and reforms which have nothing to with the current calamity and rehabilitation.
What matters right now is how quickly the task of reconstruction will begin and whether it will really be done on the lines of 'build-back-better'.
Replacing roads and buildings washed away by the floods, with new ones will surely give parts of Kerala a new and natty look. Even the state's famed holiday resorts that were ruined may look smarter once rebuilt. All that would be build-back-better in the dictionary sense of it. But would that be build-back-safer and disaster-resilient the way it should be, even though that’s what the state government says it wants?
That again would be a hard task, not least because of the higher costs. World Bank expert Raja Rehan Arshad says: "Building back better isn't always easy — recent studies by the World Bank indicate costs can be between about 10 to 50 percent more than simply replacing the original structures. But in the long run, the benefits greatly outweigh the costs, both in terms of economic losses and lives saved."
But even if it's more expensive, build-back-better is a necessity, not a luxury. The damage done to the climate has only raised the frequency of calamities. As Muralee Thummarukudy, Chief of Disaster Risk Reduction and Operations in UN Environment warns, "The last major flood in Kerala was in 1924, which means the current flood is happening after 94 years. The next flood will not wait for another 94 years. This is going to happen soon."
Vijayan also said that large numbers of flood-affected people have to be shifted from ecologically-fragile locations to safer places, but in a state starved of land and prone to litigation and controversy, that's easier said than done.
Jobs are fine, but who gets richer?
The Kerala government is talking of "lakhs of jobs" that will be created now. In a state that suffers from an acute unemployment crisis that drives lakhs of Malayalees to other states and countries for jobs, this sounds like a marvellous prospect. But this resurgence in employment market is unlikely to hold out unless the rebuilding work also perks up economic growth and generates more businesses and jobs, like it did in a limited fashion in New Orleans after Hurricane Katrina.
The infusion of large amounts of money into rebuilding work, also raises the inevitable question of who will get richer from it. Writing in UNChronicle, a United Nations magazine, economist Sonali Deraniyagala says: "Who wins and who loses from post-disaster economic recovery? This is an important question to ask because the beneficiaries may not always be those with the greatest economic losses."
And that's what Kerala must guard against. Despite the laudable Human Development Index of which Kerala boasts, a significant section of the state's population suffers from what some economists call 'disguised poverty' and are in debt. Unless the state does everything to help them first, they will only end up taking more high-interest private loans to build or rebuild or refurbish the modest dwellings that they have lost. Micro-financing at liberal terms can come in handy and save at least some of them from debt traps.
Companies and businessmen involved in rehab work shouldn’t be the only ones to get richer. Build-back-better has as much to with lives of ordinary people as it has with roads and homes.
Author tweets @sprasadindia
Updated Date: Aug 30, 2018 14:01 PM