35657 INTERNATIONALBANK FOR WORLD BANK R E T C N O E N STRUCTION PM AND DEVELO October 2003 No. 32 A regular series of notes highlighting recent lessons emerging from the operational and analytical program of the World Bank`s Latin America and Caribbean Region NATURAL DISASTERS AND THE URBAN POOR1 Marianne Fay, Francis Ghesquiere and Tova Solo Natural disasters made two and a half million people home- Cities' vulnerability is attributed to their high density of assets less in Latin America between 1990 and 1999. The region and people, and to the poor quality of housing, urban planning has been plagued with an average of 30 disasters causing and urban infrastructure common in developing countries. In 7,500 fatalities a year for 30 addition, the 20 largest cities years. Worse, the frequency of in Latin America are in areas natural disasters appears to be with steep slopes, swamps, rising. It is generally agreed "Natural" disasters? floodable land, or seismic ac- that rapid population growth If natural hazards can be seen as exogenous shocks, tivities. As a result, many of leading to larger and denser hu- independent of human actions , natural disasters are the region's worst disasters man settlements, combined at least partially controllable, being the result of have hit cities: earthquakes in with environment degradation concentrated human settlements and activities in Guatemala City, San Salva- are key reasons. The emergence disaster prone areas. So vulnerability to natural dor, Lima, Managua, Mexico of megacities, population con- disaster should be seen as a policy outcome. City, Santiago; and landslides centration in coastal areas that wreaked major destruc- (which are particularly vulner- tion in Caracas and Rio. able), and persistent wide- spread poverty compound the prob- Hazardous locations and poor lem. housing quality put the poor at par- ticular risk for natural disasters. The poor are particularly They account for the 30,000 deaths vulnerable caused by the 1999 mudslides in Venezuela. Poorly functioning land markets, urban sprawl and Data suggest that poor people are poor public transportation push low particularly vulnerable to disasters. income households to settle in di- In Mexico, 68 percent of people af- saster prone areas. In Metropolitan fected by natural disasters are poor San Salvador and Tegucigalpa, and extremely poor.2 Average asset about one fifth of the poor report losses were 18 percent among the having suffered damage from land- poorest fifth of Honduran households slides in the last five years and affected by Hurricane Mitch, com- 10% and 17% respectively, from pared with 3 percent among the rich- floods, much worse than for richer est quintile (Morris et al, 2000). There are no specific groups (Figure 1). As of 1993, it was estimated that at least disaster statistics comparing the urban poor to other urban 37% of Latin America's housing stock did not provide ad- dwellers or the rural poor. Nevertheless, there is a general equate protection against disaster and illness. There is evi- agreement in the natural disaster literature that cities are dence also that the bad quality of infrastructure in poor com- particularly vulnerable to natural hazards, and that within the munities contributes to vulnerability.4 urban population, the poor are generally (although not uniquely) greatly at risk.3 In addition, the poor tend to have different risk behavior 1 Figure 1 Population who suffered physical damage due Population who suffered physical damage due to floods to landslides 25 18 San Salvador 16 San Salvador Tegucigalpa 20 14 Tegucigalpa 12 15 10 % % 8 10 6 4 5 2 0 0 1 2 3 4 5 1 2 3 4 5 quintile quintile than higher income people. They are more risk averse in not repaired, whereas other infrastructure has long been re- economic terms because they lack savings or assets, but placed. In Venezuela, 8 months after the landslides, 33,000 more risk taking in spatial terms (Pantoja, 2002). This people still lived in shelters or barracks in appalling condi- could be because they are less informed of the risk, or be- tions. Most were in extreme poverty. Poor conditions in shel- cause the advantages of risky locations are perceived as out- ters and accumulated uncertainty over the future were linked weighing the risks. In fact, in locations where catastrophic to rising rates of rape, domestic violence, child prostitution risk is recurrent and well understood, the low income hous- and drug abuse. The government was criticized for focusing ing market clearly factors in this risk (Box 1). Alternatively, on rebuilding roads and other economic infrastructure at the the poor may not engage in risk reduction strategies because expense of social issues.5 they lack resources ­ resettlement, home retrofitting, or in- surance coverage (seldom available for the poor) may be too Women (especially household heads) are more likely to suffer costly relative to savings capacity and perceived benefits. Box 2: Even poor countries can improve disaster prevention and mitigation Box 1: Efficient housing markets in the Santo Domingo slums? Comparing the impact of similar events in developed and developing countries suggests that developing countries are Santo Domingo's central city slum spans several worlds with more vulnerable to natural disasters. The 1989 San Fran- varying vulnerability to flooding and landslides. The risk of cisco earthquake, magnitude 7.1, caused 63 deaths, while a flooding when it rains varies from 45% for households near 6.2 earthquake in Guatemala in 1976 resulted in 22,780 the river or along the eleven main drainage systems and fatalities. Countries with similar occurrences of natural cañadas (gullies) to 6% for households on higher, consoli- disasters, such as Japan and Peru, have very different dated parts. Knowledge is common about which areas of the disaster related death statistics ­ between 1970 and 1999 neighborhood are at risk of landslides. Rents (actual or Peru had 2,420 fatalities; Japan only recorded 315. imputed) reflect location safety and are almost twice as high in the consolidated, safer, areas than near the river or around This seems to be related less to countries' wealth than to gullies. Housing quality also reflects risk perception, with their degree of preparedness. Hurricane Mitch killed 20,000 simple wooden shacks in areas at risk for regular, cata- people in 1998, but in 2001, when Hurricane Michelle, a strophic floods, and homes of durable materials, several similarly powerful storm, ripped through Cuba, only 5 stories high, on the consolidated part. people died. In Cuba, with successful civil defense and red Source: Chattopadhyay, Fay and Guasch 2001. cross planning, 700,000 people were evacuated to emer- gency shelters in time. Search and rescue and emergency health care plans were in place. Havana's electricity and As most of their income is allocated to immediate survival, water were turned off to avoid electrocution and sewage the low frequency risk of a natural disaster, however cata- contamination. A UN report concluded that the strophic its effects, may not justify a change in behavior. Government's high degree of preparedness was essential in preventing major loss of life. The poor are also less able to recover from natural disasters, partly because of their lack of resources but also of public Source: Charveriat 2000; International Federation of Red Cross policies. In Tegucigalpa, four years after Hurricane Mitch, and Red Crescent Societies, 2002. bridges linking poor neighborhoods to the city center are still 2 long term consequences after natural disasters. The proportion Nevertheless, there are success stories, even in poor communi- of women living in shelters in the immediate aftermath of Hur- ties. Cuba's experience shows that political will and good in- ricane Mitch equaled their proportion in the general population stitutional organization can overcome the lack of wealth (Box in Central America. This percentage significantly increased 2). Several communities and cities have organized themselves over time, particularly for women household heads, possibly and successfully averted major disasters. The Dominican Re- demonstrating their greater difficulty in accessing lodging and public government and an NGO coalition organized work- food-for-work programs. Disasters can also create opportuni- shops to help communities devise community emergency ties for female leadership and empowerment -- nearly a third plans. During Hurricane George (1998), communities with of shelters in Honduras were managed by women.6 plans successfully evacuated people, established shelters, orga- nized clean-up brigades and requested and distributed assis- What can be done to make the poor less tance effectively, and suffered much lower impacts than com- vulnerable to natural disasters? munities without plans.8 Building social assets in neighbor- hoods can also greatly reduce the impact of a disaster. In Catuche, a Caracas neighborhood, very few people died dur- Disaster risk can be reduced by acting upon the hazard factor ing the floods, reportedly due to community mobilization and or vulnerability factor. Some hazards (floods or landslides) mutual help efforts. 9 can be mitigated through engineering solutions, others (earth- quakes and hurricanes) cannot. Much can be done to reduce Some countries are experimenting with improving disaster vulnerability. Land use planning can prevent settlements in preparedness through improved buildings. In the British dangerous areas. Infrastructure and housing can be made Virgin Islands, all new buildings are equipped with hurri- more disaster resistant ­ through building codes for earth- cane shutters, which are tax exempt. National development quakes, provision of hurricane shutters and improved quality foundations in Antigua and Barbuda, Dominica and St Lucia roofing for better hurricane resistance. Finally, insurance can have implemented hurricane resistant home improvement speed recovery and limit long term impacts. programs for poor and vulnerable communities. These pro- grams promote safer building practices in the informal hous- Unfortunately, many of these recommendations are difficult ing sector by conducting safer building training workshops for poor cities to implement and pose special difficulties for for builders and artisans and providing access to loans for poor people. Few Latin American cities have undertaken the home retrofitting and upgrading.10 hazard or vulnerability assessments needed to plan for devel- opment, evaluate options for mitigation or risk reduction in- While disaster insurance is fairly common in industrialized vestments and plan responses to possible disasters.7 Nor do countries, largely thanks to government intervention, in devel- many LAC cities have the capacity to prevent settlement in di- oping countries it is mainly confined to wealthy individuals, saster prone areas. Rules and regulations, when they exist, are large companies and government organizations. Irregular seldom enforced. Alternatively, they may make matters worse settlements without titles or valuation and sub-optimal housing ­by limiting the land available for safe settlement or because land are generally considered un-insurable. But Manizales city, Co- deemed unsafe becomes cheaper and therefore even more attrac- lombia, has proved that innovative schemes and political will tive to those who cannot afford anything else. As noted, lack of al- can provide even the very poorest with access to catastrophic ternatives often results in poor people settling in areas known to be insurance (Box 3). unsafe, regardless of rules or land use plans. Finally, infrastructure improvements or retro-fitting is usually targeted to richer parts of In addition, an exhaustive study of the role of micro-finance town where the infrastructure exists. Poor neighborhoods typically in disaster risk management (Pantoja, 2002) suggests that mi- have low quality infrastructure, often waiting for simple repairs, let cro-credit can play a role both in prevention and recovery. alone upgrading or retro-fitting. Housing loans can help promote adoption of appropriate Box 3: Providing Catastrophic Insurance to the Poor ­ the Experience of Manizales, Colombia Manizales has pioneered disaster risk management. Among other programs, the city has established an insurance program for buildings owned by its poorest population. Through an agreement with an insurance company, the city allows any city resident to purchase insurance coverage through the municipal tax collection system. Once 30%11 of the insurable buildings in the metropolitan area participate, the insurance coverage extends to all properties exempted from property tax. These in- clude buildings hosting organizations dedicated to the public good (NGOs, foundations and non-profits), and all properties of strata 1 and 2 -- properties with cadastral value of less than 25 minimum monthly salaries each (approximately US$3,400). The insurance contract is priced competitively and designed so that the insurance company ends up with a direct contractual relationship with the individual participating taxpayer. The Municipal Administration acts as a premium collector only, keep- ing 6% of premia as a handling fee, and transferring the rest to the insurance company, which bears all responsibility for claims. The World Bank is currently working with the City of Manizales to help make the scheme even more performant. 3 building technologies and micro-finance institutions occasion- Notes ally include some type of technical assistance. Access to a loan 1 after a disaster can make a critical difference in a poor family's We drew extensively on Charvériat's (2000) review of issues ability to recover. Nevertheless, micro-credit is limited in related to natural disasters in Latin America and the Caribbean. what it can do. Because disasters are a co-variant risk, micro- For more information on disaster management, see http:// finance institutions have to protect themselves to avoid serious worldbank.org/dmf/ and http://www.iadb.org/ 2 financial reversals, and ensure they can keep resources flow- Mexico Draft Concept Paper for a Poverty Assessment, June ing after a disaster. Also, micro-credit institutions do not usu- 2002. Mexico is particularly vulnerable to natural disasters, ally reach the poorest people. Finally, to be viable, micro- averaging three per year during 1980-99. 3 credit institutions need to be commercially run, requiring care- Charvériat (2000) reviews the issue. 4 ful balancing of human needs and financial discipline. World Bank, World Development Report 2000/2001 5International Federation of Red Cross and Red Crescent So- A number of cities in Latin America have become active in di- cieties, 2001. 6 saster prevention. A 1997 survey found that a number of cities World Bank (gender note.) 7 (Cali, Medellin and Manizales) have disaster prevention and Hazard assessments identify hazard zones and vulnerability relief systems that are models for the rest of Latin America, al- assessments evaluate the expected performance of structures, though most have limited roles, within the narrow confines of infrastructure and institutions under the stress of a disaster. 8 existing national civil defense legislation. The survey notes World Bank 200, Natural Hazard Risk Management in the also that where municipalities do not have the capacity to Caribbean 9 carry out responsibilities designated to them, the vulnerability Sanderson, 2000. 10 of the population is very high. World Bank (CGCED) 2002. 11This coverage level was originally set at 40% but was later Importantly, US studies show that communities or municipali- lowered to 30% in November 2001. ties tend not to organize unless there is a federal incentive. 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"Municipalities in the Reconstruc- problem is poor integration or communication between the tion and Transformation of Central America and the Caribbean, agency in charge of disaster management and the ministry in Consultative Group Meeting." Inter-American Development charge of urban affairs. Promoting cooperation between them Bank, Washington, DC. can help stimulate national urban preparedness campaigns. At World Bank. 2001. "Notes, Number 56: Hurricane Mitch-The Gender the municipal level, critical steps include improved land use Effects of Coping and Crises." Development Economics Vice- management and building code regulations. These need to be presidency and Poverty Reduction and Economic Management designed and enforced with the poor in mind, or else they will Network, The World Bank, Washington, DC. International Federation of Red Cross and Red Crescent Societies. be ignored ­ or make matters worse. Better integrated com- 2001. "World Disasters Report 2001." 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World Manizales shows that it can work even for the poorest. Bank, Washington, DC. ******** Sanderson, David. 2000. "Cities, Disasters and Livehoods." Environ- About the Authors ment and Urbanization, Vol. 12 No. 2. World Bank. 2000. "World Development Report 2000/01: Managing Marianne Fay is a Lead Economist, Francis Ghesquiere is Economic Crises and Natural Disasters." World Bank, Wash- an Urban Specialist and Tova Solo is a Senior Urban Spe- ington, DC. cialist in the Finance, Private Sector & Infrastructure De- World Bank. 2002. "Urban Service Delivery and the Poor: The partment of the Latin America and Caribbean Region of the Case of Three Central American Cities. " Report No. 22590. World Bank. The World Bank, Washington, DC. 4