The positive side of natural disasters
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From our own recent experiences in Jamaica, we know how devastating natural disasters, particularly hurricanes, can be for the economy, infrastructure and people, especially those on the social and economic margins. Yet, there are benefits, though they may not accrue equally or at all to everyone or group.
Among people who tend to fare better are people who have adequate and relevant insurance, people who know available benefits and how to access them promptly, people who are quick to spot business opportunities, people who have the skills that are generally in demand for reconstruction efforts, and people who can draw on support networks, both locally and from family abroad.
Insurance makes it possible to rebuild, make repairs, improvements, and even upgrades of properties, often resulting in houses with stronger roofs, more attractive designs, electrical rewiring, and safer and more valuable homes.
At the same time, some people have adequate savings and investments they can draw on to restore their losses or provide the liquidity needed to continue life without serious disruption.
In a true sense, we can hardly say such people have gained, just that they have protected their position.
As we saw in the aftermath of Hurricane Melissa, assistance came from many sources – local and overseas – to help victims partially recover, primarily in the short term. Food, clothing, medical supplies, and cash grants were prominent among the help they received.
Considering the level of dislocation in the economy, with people losing their homes, businesses, and livelihoods, the commercial banks, credit unions and building societies threw a lifeline to their customers by offering them short-term moratoria on their loans, and waived fees on a case-by-case basis. They did not cancel interest on the loans, just deferred payment. The National Housing Trust similarly made concessions. These were just short-term measures aimed at giving their customers some breathing space, but which could allow the more savvy ones to reorganise their financial lives for the better.
Many needed help of a longer-term nature – housing, for example, due to serious damage to their residences. Some could be repaired. Others were beyond repair and had to be replaced entirely.
Roads, bridges, hospitals, clinics, schools, churches, for example, were also seriously damaged, some destroyed. This created the need for reconstruction, which required significant sums of money and building materials. There was much voluntary labour to restore some residences.
From the Jamaica Defence Force, for example, there was much need for the services of skilled construction labour. Government of Jamaica reconstruction programmes like the National Reconstruction and Resilience programme, which is intended to continue into the medium term, is one programme that will require significant construction skilled labour.
Agriculture is one other area which needs significant restoration after natural disasters like a hurricane. Land preparation and replanting of crops take a prominent place in the reconstruction of the economy and provides opportunities for gainful employment.
And just as businesses engaged in selling building materials get a boost, those that sell the inputs required for farming also get a boost. Such businesses make more money for their owners but are also able to generate more employment.
People engaged in transportation and haulage also benefit from reconstruction activities, as do members of the tourism sector who must do necessary repairs and who often seize the opportunity for reconstruction and refurbishing of their properties.
Natural disasters bring unemployment in their wake, but also generate new employment as reconstruction is done and life returns to normal.
Some natural disasters, such as hurricanes, for example, give warnings and can be tracked as they advance. Others, like earthquakes, do not generally announce themselves. To prepare for them, create an emergency fund, secure adequate insurance, document all assets, diversify investment portfolios to allow access to liquid funds for immediate needs, and know the agencies that can offer help in crises. Notwithstanding the level of preparation, those who lose
are generally more than those who gain.
In much the same way that natural disasters bring destruction, they also bring opportunities for people to improve themselves. People who have relevant and adequate insurance know this well. Natural disasters also create employment in the reconstruction process, and create opportunities for many to get valuable assistance from governments and private organisations and individuals to put their lives back together, even exceeding their previous position.
Oran A Hall, author of Understanding Investments and principal author of The Handbook of
Personal Financial Planning, offers personal financial planning advice and counsel.