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Barun's op-ed



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Couldn't agree more. Insurance-weather forecasting linkup is critically
necessary. Will endorse this to those who decide these things. SS

From: Liberty Institute <liberty@giasdl01.vsnl.net.in>
Subject: Orissa's Cyclone - a man-made disaster 

Dear Friend of Liberty:

The cyclone that hit the coastal areas of the eastern Indian state of
Orissa two weeks age affected 8 million people. It has left anything
between 10-15,000 people dead, destroyed virtually all the standing crops
in the area, washed away hundreds of thousands of homes, and killed
thousands of cattle and other domestic animals. Almost two weeks after the
cyclone, many areas are still cutoff, with little relief trickling in, and
no accurate estimate of the destruction. 

While the state adminstration had all but but collapsed, and led to looting
of relief material and general breakdown of law and order, the central
government has refused to appeal for international help for the fear of
giving the impression that India is incapable of handling such a disaster.
It has asked all donations - money and material - to be channelled through
the Prime Minsiter's Relief Fund.

Many more are facing death due to malnutrition, water borne diseases,
threat of cholera, and even snake bites. And as usual there is growing
accusation corruption and politicisation of relief and rebuilding efforts.

In the following oped I argue that while the cyclone was a natural
calamity, the disaster is man-made. 

Your comment and criticism are welcome. 
Thank you.

Barun Mitra 

P.S. If you are receiving this mail inadvertently, please let us know, and
you will be removed from this list. Thanks.
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Asian Wall Street Journal
10 November 1999 

ORISSA'S MAN-MADE TRAGEDY 

By BARUN S. MITRA

NEW DELHI -- Twelve days after a supercyclone hit the state of Orissa, India
is still grappling with the enormity of the tragedy. Over 10,000 people are
feared dead, and millions of hectares of cropland damaged. Meanwhile, in
Vietnam a massive flood has been causing more misery. Reading these
headlines of massive casualties, it seems natural to ask the question: Does
nature discriminate against poorer people and countries? 

The answer is no, but there's a reason it seems that way. Even a cursory
analysis of various natural disasters, whether floods, earthquakes or
hurricanes, shows that economically developed countries are better able to
withstand these same calamities and so suffer fewer casualties (although the
dollar value of property damage is higher, as one would expect). This is in
sharp contrast to the fate of people in developing countries, where the cost
in terms of human life is enormous.

The obvious explanation--that citizens of developed countries have greater
resources to protect themselves--is correct as far as it goes, but the
problem goes deeper than that. Governments of many developing countries make
fundamental mistakes in protecting and bettering the lives of their
citizens. They pursue statist policies that hamper economic development and
perpetuate poverty, and they also misuse the power concentrated in the hands
of the bureaucracy.

The events leading up to the Orissa cyclone clearly show this. While the
storm was a natural calamity, the tragedy itself was the handiwork of man.
Economic development can substantially lower the danger of living close to
nature. In India, this lack of development is the result of 50 years of
state control over the economy. Orissa is rich in natural resources, but its
people are among the poorest in the world. Central and state government
policies have ensured that much of these resources are underutilized. As a
result, there is little funding available to cope with calamities like the
cyclone.

The major reason is that there was inadequate warning. The problem is partly
the Indian government's tight control over all kinds of communications, from
telecoms to broadcasting. As a result, the infrastructure is totally
inadequate, and before the cyclone hit little warning was given to people to
take precautions. Instead of a wide range of media, from local radio and
television to telephone, continuously informing the people of the impending
disaster, for many the storm came as a surprise. Many coastal fishermen
ventured out to sea to face the full brunt of the storm, never to return. 

This is unforgivable, since for over two days meteorologists in India and
around the world were tracking the storm and warning about its impact. But
nothing was done to utilize even this basic information. It is not enough to
lay the blame at the door of the bureaucracy for their callousness and
indifference. It is not enough to blame the politicians who now swarm the
disaster area trying to score political points. 

If we Indians are really moved to action by this massive human tragedy, we
must reconsider the institutional arrangements and the incentive structures
of the present system and compare them with possible alternatives. For
instance, a private and widespread network of communication channels would
have ensured not only better flow of information before the storm, but also
greatly increased the chances of some of these channels surviving the storm
and therefore readily assess the damage and direct relief measures
immediately.

In many parts of the world, weather forecasting is an attractive business
proposition. Linked with the insurance sector, this is the most efficient
tool for dissemination of such information to rural communities and
fisher-folks. In a competitive marketplace, there would be a premium on
quality of such information. And the incentive structure would be such that
it would make business sense to provide advance information about such an
event, to ensure that adequate precautions are taken to minimize the loss,
and to institute relief and rebuilding process at the earliest. 

None of these exists today. In the present political and administrative
environment, the only incentive is to extract political mileage out of human
tragedy. It is no coincidence that we make a huge fuss about allowing 26%
foreign equity in insurance, while barely 5% of the population is under any
kind of cover, and neglect the interests of one billion people to protect
the 250,000 public sector insurance employees. Insurance and self-help
organizations are one of the best tools capable of dealing with such events
in most effectively, motivated not so much out of charity but by
self-interest. By taking over the insurance sector, the state has deprived
the people of one of the most effective instruments, and left them open to
face the forces of nature without any protection.

Indians talk of encouraging IT and telecommunication and broadcasting. But
in practice the government stifles new technological advances in cable TV,
DTH broadcasting, and cellular and satellite telephony that may help improve
the condition of our own people by providing them access to information.
With just 15 million telephones and 50 million televisions, and less than
one million personal computers, it's clear the country will never enter the
information age if this sector is left under state control.

The tragedy of Orissa is the latest manifestation of the ills affecting our
institutions. We need rapid and massive reforms--political, economic,
judicial and administrative--to have any chance of breaking free of poverty.
Rather than looking up to the state for doling out relief, we must squarely
hold it responsible for creating the environment that made people so
helpless in the face of such natural fury. We must get the state out of the
people's hair, and let the enterprising spirits of the people a free rein,
allow them to harness the potential of the marketplace, especially in
information and insurance.

Richer is safer--economically and environmentally. The richer the people,
the greater their ability to choose, and the wider the range of choices in
the marketplace. The people in developing countries pay with their life when
government takes on the responsibility of deciding for them. This is the
lesson that we must draw from the tragedy of Orissa. It may not be possible
to avoid natural calamities, but it is possible to minimize the losses.

(Mr. Mitra is the founder of the Liberty Institute, an independent think tank
based in New Delhi.)

Copyright The Asian Wall Street Journal, 1999.

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Barun S. Mitra				E-Mail: bmitra@bigfoot.com
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