Major natural disasters carry significant economic consequences. Hurricanes, in particular, are extremely destructive forces in terms of both physical damage and large scale economic costs–and they occur with some regularity every year. Everyone knows that these storms are expensive, but just how expensive and the long term economic impact may be less clear to many. Recent studies have shown that hurricanes can be as devastating as many human induced economic challenges. Slowing down economic growth is a big consequence of severe natural disasters like major hurricanes. In general, the exact long term impact varies from location to location, and less developed regions lacking in comprehensive preparation may experience greater long term loss.
Hurricanes of a magnitude expected every few years are estimated to have the potential to slow economic growth on par with a tax, political, or currency crisis. For storms expected to occur around the world once a decade or so, economic losses could be on par with a banking crisis. The top percentile storms, however, could have enormous losses and catastrophic economic shocks unlike anything previously studied.
This all points to an inconvenient reality that severe tropical storms like hurricanes are economically devastating forces that require a kind of planning and economic fortification on par with any other potential man made crisis. The less a region or affected city is prepared for the impact of a hurricane, the greater the risk for long term economic consequences.
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The only way to deal with the economic effects of a natural disaster like a severe hurricane is through improved infrastructure projects and better investment in large scale preparation for residences and businesses. Reinforcing commercial buildings to resist high winds and rains and increasing training and response times for emergency personnel after a hurricane are steps that can help expedite the recovery process.
Outdated infrastructure is a major contributor to large economic losses during a hurricane. Improving infrastructure and emergency services requires investments, but the recovery costs can be potentially lower with more resistance in place to better withstand the force of the storm.
The economic impact of damaged or destroyed homes and businesses, displacements, and loss of production and revenue can quickly accumulate and initiate a huge economic impact that resonates for years. This is why regular funding and comprehensive planning and awareness initiatives need to be undertaken to help mitigate the economic damages a city sustains after a hurricane. Disaster recovery is a collective burden and one that must involve entire communities and municipalities. The economic consequences affect everyone; so too should planning and preparation.