Economic Impacts of Natural Hazards on Vulnerable Populations in VANUATU Contents

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Economic Impacts of Natural Hazards on Vulnerable Populations in VANUATU Contents Economic Impacts of Natural Hazards on Vulnerable Populations in VANUATU Contents List of abbreviations ii Executive summary 1 Hazard and exposure 2 1 1.1. Overview of risks 2 1.2. Cyclones 5 1.3. Earthquakes and tsunamis 7 1.4. Volcanoes 7 1.5. Droughts 8 Vulnerability and impacts 9 2 2.1. Economic profile 9 2.2. Agriculture and fisheries 10 2.3. Tourism 11 2.4. Commerce and industry 12 2.5. Housing and settlements 12 2.6. Low-income and informal workers 13 2.7. Gender 15 2.8. Youth 19 Coping mechanisms 22 3 3.1. Types of coping mechanisms 22 3.2. Adaptive social protection 22 3.3. Remittances 24 3.4. Financial inclusion 26 3.5. Insurance 27 3.6. Migration and relocation 28 3.7. Community-based support 30 Conclusions 32 4 4.1. Hazard, exposure, and vulnerability 32 4.2. Coping mechanisms 33 References 36 i List of abbreviations ADB Asian Development Bank CRED Centre for Research on the Epidemiology of Disasters CSIRO Commonwealth Scientific and Industrial Research Organisation EM-DAT Emergency Events Database ESCAP Economic and Social Commission for Asia and the Pacific GDP Gross Domestic Product GFDRR Global Facility for Disaster Reduction and Recovery GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit IASC Inter-Agency Standing Committee Reference Group on Risk, Early Warning and Preparedness IDMC Internal Displacement Monitoring Centre IFRC International Federation of Red Cross and Red Crescent Societies ILO International Labour Organization IMF International Monetary Fund INFORM Index for Risk Management MSME Micro-, small-, and medium-sized enterprises NDMO National Disaster Management Office (Vanuatu) OCHA United Nations Office for the Coordination of Humanitarian Affairs OECD Organisation for Economic Co-operation and Development PCRAFI Pacific Catastrophe Risk Assessment and Financing Initiative SPC Secretariat of the Pacific Community TC Tropical Cyclone UNDP United Nations Development Programme UNDRR United Nations Office for Disaster Risk Reduction UNFPA United Nations Population Fund UNICEF United Nations Childrens’ Fund USD United States dollar VUV Vanuatu vatu (unit of currency) WASH Water, Sanitation and Hygiene WFP World Food Programme WTO World Trade Organization ii Executive summary Vanuatu is highly exposed to natural hazards, Support systems that can help poor and with cyclones regularly damaging property and disadvantaged populations cope with the impacts of causing long-term cumulative economic harm. natural hazards include: Tropical cyclones, with associated storm surges • Social protection systems that can rapidly adapt and flooding, are the principal hazard affecting in crisis situations can support the immediate Vanuatu, but the country is also exposed to needs of affected people as well as longer-term earthquakes and tsunamis, volcanoes, and reconstruction. Vanuatu has very limited social droughts. Climate change is expected to protection systems in place but has undertaken exacerbate weather-related hazards. some small-scale pilot projects in partnership with Vanuatu’s relatively small economy, dominated international agencies. by tourism and subsistence agriculture, is highly • Remittances contribute to poverty reduction, vulnerable to natural hazards. Tourism is nature- wealth creation, social protection, and economic based and dependent on coastal and inland growth in many countries. In Vanuatu, remittances ecosystems which are vulnerable to damage are low compared with regional peers, but are rising from natural hazards. Agriculture is vulnerable and becoming an increasingly important source of to damage from cyclones and droughts, and income and protection for households. the majority of the population of Vanuatu relies • Financial inclusion can be a significant contributor heavily on subsistence agriculture for livelihoods to development, poverty reduction, and disaster and food security. Climate change is expected resilience. Financial inclusion currently plays a to adversely affect agriculture through limited role in disaster resilience in Vanuatu, as increased frequency of extreme weather the economy is very much cash-based and there events, sea level rise, and disruption of aquatic is limited familiarity with and uptake of financial ecosystems. services. Natural hazards disproportionately affect poor • Insurance can be an important tool for managing people, workers in the informal economy, risks associated with natural hazards, but insurance women, and youths. Poor people tend to is not widely available or commonly used in be more exposed to hazards than wealthier Vanuatu. The majority of people and businesses people, are more severely affected by hazards, have no insurance protection, and coverage and have fewer resources available to them against natural hazards is difficult to obtain. to cope when disasters do occur. Poverty • Migration, both internally and internationally, can is a significant issue in Vanuatu, although support development and disaster resilience. there is a lack of recent data to confirm the Vanuatu currently has low levels of emigration, current situation, and the country has high but has been an increasingly active participant in levels of informal and vulnerable employment seasonal worker programs in the region. Relocation and subsistence economic activity. Gender of settlements at risk of natural hazards has been inequality is a significant challenge, and women undertaken in several instances and Vanuatu is and girls are often excluded from decision- seen as a leader in developing appropriate policies making roles, limited in economic opportunities, on this issue. and suffer high levels of gender-based violence. • Community-based support mechanisms are a Youths are affected by disruption to education common way for communities to manage risk, caused by natural hazards and from a shortage especially in rural and poor communities. Vanuatu of employment opportunities which is due in has very strong traditions of community support, part to the effects of natural hazards. and has resources of traditional knowledge and traditional governance structures that greatly enhance disaster resilience. 1 1. Hazard and exposure 1.1. Overview of risks Pacific island countries are widely regarded Tropical cyclones and earthquakes are the as experiencing the highest risks associated principal hazards affecting Vanuatu, although with natural hazards in the world due to their the country is also exposed to volcanoes, high exposure to a variety of hazards, their tsunamis, and droughts. Vanuatu is located in geographical remoteness, and their dispersion an area known for the frequent occurrence across a large area (ADB [Asian Development of tropical cyclones with damaging winds, Bank], 2018, p. 2; World Bank, 2017a, p. rains, and storm surge (PCRAFI, 2011, p. 3). It 81). Across the region, hydrological and is also located on the Pacific “Ring of Fire”, meteorological events cause the majority of placing it at risk of earthquakes and tsunamis economic losses, with cyclones being the most (PCRAFI, 2011, p. 3), which are rare, but can serious hazard, while geo-hazards are the major be extremely damaging when they do occur. cause of human loss (Utz, 2017, p. 81). The effects of climate change in Vanuatu by the end of this century are expected to include Vanuatu is ranked as the most hazardous continued El Niño and La Niña events, rising country in the world by WorldRiskIndex on the annual mean temperatures and maximum daily basis of its high exposure to natural hazards temperatures, continued ocean acidification and relatively low coping capacity (Day et al., and increased coral bleaching, continued sea 2019). An International Monetary Fund (IMF) level rise, and slightly decreased frequency of study estimates that Vanuatu has a 57% chance cyclone formation but increased maximum of suffering a significant1 disaster related to wind speeds (Australian Bureau of Meteorology natural hazards each year (Lee et al., 2018, and CSIRO [Commonwealth Scientific and p. 7). The Pacific Catastrophe Risk Assessment Industrial Research Organisation], 2014, pp. and Financing Initiative (PCRAFI) estimates that 320–339). cyclones, earthquakes, and tsunamis cause average annual damage and losses equivalent to 6.6% of Gross Domestic Product (GDP), and that within the next 50 years, Vanuatu has a 50% chance of experiencing a loss due to cyclones, earthquakes, or tsunamis valued at more than 45% of GDP, and a 10% chance of a loss exceeding 74% of GDP (PCRAFI, 2011, pp. 1, 5). 1 This analysis was based on the Emergency Events Database (EM-DAT), which counts disasters involving 10 or more deaths, 100 or more people affected, the declaration of a state of emergency, or a call for international assistance. 2 Different agencies, using different Figure 1: Natural Hazard Forecasts methodologies, provide different assessments of WorldRiskReport risk for Vanuatu. Risk Risk quintile score • WorldRiskReport2 ranks Vanuatu as the most hazardous country in the world due to high Exposure 99.88 Very high exposure to natural hazards and lack of coping capacities. The ranking process uses Vulnerability 56.78 High 27 indicators and assigns countries scores ranging from 0 (least risk) to 100 (greatest risk) Susceptibility 35.32 High (Day et al., 2019, pp. 44, 56). Lack of coping 84.36 High capacity • INFORM (Index for Risk Management)3 Lack of adaptive 50.66 High assesses the relative risk of countries capacity experiencing humanitarian crises, taking into (Day et al., 2019) account exposure to hazards, vulnerability
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