Published On: Wed, Apr 11th, 2018

How Natural Disasters Can Change the World Economy

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Naturaldisasters arein fact nature’s way of revolting against all the abuse it has been subjectedto. It is dangerous, fatal and cannot be contained in any way. What is more, natural disasters cannot be predicted either. Only a warning can be estimated without leaving substantial time for proper evacuation. These calamities have an impact spanning beyond the immediate destruction we see. Natural disasters can have a seriousimpact on the national as well as local economy of the geographical location under consideration. Even though it is quite natural to think that the effect on the economy will be bad, there are a few upsides to it too in the long run.

Unsure of insurance

Natural disasters, even those that are not as serious as when two planets collide, cause mass destruction of property and life which puts insurance companies under great pressure. It is quite understandable that to reimburse large amounts of that sort to the policyholders ends up becoming a very trying affair for these corporations and they respond to it by making policies more expensive and unattainable. This begins a cycle of economic disintegration wherethe insurer and the insured become rivals for self-preservation.

Damage to infrastructure

Natural disasters cause massive disruption by crumbling majorinfrastructures responsible for the smooth running of the area. These public infrastructures are built, maintained and paid for by the government of the area under concern. Post calamity, the entire economy of a country can go haywire when they invest in the lost setups to rebuild the cities. Every country in the world contributes to keeping the world economy afloat. However, natural disasters do not abide by boundaries and can take any number of countries under its spell. This leads to major fluctuations in the stock market as well since the first priority of any government is to bring back functionality in their jurisdiction.

Restoration specialists

Most of the sectors of oursociety function and make money off its stability, but there are some business houses that work for reestablishing that stability after a great havoc. These business houses are the restoration pioneers who are usually government funded. They rebuild cities, offer temporary shelter to the victims of natural disasters and also provide amenitiesto them. These corporations also monetize on mass clean-up drives. For businesses like these, a natural disaster is when they can start minting money and give back to the society. Due to the presence of stakeholders like them, the economy has a chance to recoup the losses it suffers during a disaster. Since the money continues to be within the circuit and in constant flow, it not onlykick-starts these business houses but also creates stronger stakeholders in the long run.

There is simplynothing that can justify the grief and pain of a natural disaster and its consequences. However,the economyis not builtout of emotions. A major event like a natural disaster is bound to tip the economic scales of the world, but again, no damage is irrevocable.