Thailand Flooding October 27, 2011

OVERVIEW

More than two months of monsoon downpours has resulted in some of the worst flooding in more than 50 years in . Thai officials have warned that the deluge could last several or more weeks. Many parts of are already submerged under floodwaters. Since July, flooding has caused over 350 deaths and billions of dollars in damage. Twenty-eight of the country’s 77 provinces have been affected, mostly provinces north of Bangkok. Surge waters are moving towards the mouth of the Chao Phraya River, the main river that runs through Bangkok and empties into the . The government has warned people living along the river that the banks could fail. According to the Bangkok Governor, about 4 billion cubic meters of water is approaching Bangkok, boosting levels in the Chao Phraya River to 2.30 meters (7.5 feet) above sea level, exceeding the 2.27-meter peak reached in 1995. The city itself has an average elevation of less than 2 meters above sea level. High tides have also exacerbated the problem by forcing water back into already swollen rivers.

Floodwaters are seeping into Bangkok largely due to the drenched central regions of the country and running south to the Gulf of Thailand. Officials have been trying to divert the water to the east and west, but because of the large volumes of water, they have been forced to open sluice gates in the City. According to the Department of Disaster Prevention and Mitigation, 10 of the 33 reservoirs are over capacity and being forced to release water downstream. It was reported that the Pasak Jolasit Dam in Province was releasing water at a rate of twice the normal flow because the reservoir reached 122 percent of its capacity.

DAMAGE ASSESSMENT

The flooding, which is several meters deep in many areas, has caused widespread damage across northern and . It has destroyed or damaged over 800,000 homes and has forced many industrial properties in the central region to close. Because of the efforts to protect Bangkok, other areas north of the City have been seriously affected by the flooding.

Transportation systems have been affected across northern and central Thailand. Over 200 roads are impassable and the north bound rail service has been discontinued. Flooding in the capital has also severed roads and rail links and forced the government to act on widespread food and water shortages. Floodwaters have begun to seep into Bangkok’s second largest airport, Don Muang airport. The airport services domestic flights and has been used for humanitarian airlift to inundated areas. It has been reported that the runways are expected to be closed for one week.

The agriculture sector has been one of the hardest hit. Thailand is the world’s biggest exporter and according to a government agency, the country’s main rice crop this year may fall 6.5 percent, squeezing supply and driving prices upward. It has been reported that about 12 percent of Thailand’s rice paddies have been destroyed.

ECONOMIC IMPACT

According to Thailand’s finance minister, damage from flooding since July could be as high as 1.7 percent of gross domestic product (GDP). According to the Labor Ministry, floodwaters have affected 14,254 factories and businesses in 20 provinces, leaving 664,567 workers at risk of losing their jobs. Flooding has swamped industrial properties north of the capital with as much as 3m of water. According to a J.P. Morgan Chase analyst in Tokyo, Japanese carmakers led by Toyota, Honda Motor Co. and Nissan Motor Co. may lose more than €360 million because of the floods. It has been reported that electronic companies including Apple Inc. and Western Digital are facing the worst supply disruptions since the March earthquake that struck Japan. Thailand makes about a quarter of the world’s hard-disk drives and serves as a production hub for Japanese carmakers and electronics firms.

For more information, contact:

Tom Chan, Principal Global Risk Consultants [email protected] or Chris Heaton, President Global Risk Consultants [email protected]