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Manufacturing Team

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Lloyd Phillips
Lloyd Phillips

Small Disasters !FULL!

Publication 3833, Disaster Relief, Providing Assistance Through Charitable OrganizationsPDFThis publication describes how members of the public can use charitable organizations to provide assistance to victims of disasters or other emergency hardship situations.

Small Disasters

Federal Emergency Management Agency (FEMA)Federal disaster aid programs provided by the Federal Emergency Management Agency (FEMA) are available to citizens affected by major disasters.

DUBAI, 14 November 2013 (IRIN) - As Typhoon Haiyan dominates headlines and triggers a global humanitarian response, disaster relief experts at a workshop in Dubai today warned that small disasters risked losing out on attention.

Natural and human-caused disasters affect thousands of people each year. Major adverse events such as these have the potential to cause catastrophic loss of life and physical destruction. They are often unexpected and can leave whole communities in shock.

Examples include industrial accidents, shootings, acts of terrorism, and incidents of mass violence. As with natural disasters, these types of traumatic events may also cause loss of life and property. They may also prompt evacuations from certain areas and overwhelm behavioral health resources in the affected communities.

The SAMHSA Disaster Technical Assistance Center (DTAC) also helps states, territories, tribes, and local entities deliver an effective mental health and substance abuse (behavioral health) response to disasters and traumatic events. Learn more about these issues and find more disaster-related resources at Disaster Preparedness, Response, and Recovery.

Small Island Developing States (SIDS) are the most disaster-prone countries in the world. With an increasing frequency over time, they are regularly hit by severe storms and other disasters, causing on average an annual damage of 2.1 percent of GDP.

In the aftermath of disasters, reconstruction efforts require massive financial resources which are often covered through external borrowing. On top, small countries are highly dependent and exposed to economic shocks what results in a massive drop of GDP and exports during global crisis such as COVID-19.

This paper estimates the impact of multiple disasters on debt sustainability indicators in SIDS over the period 1980 to 2018. Applying a fixed-effects and a Synthetic Control estimator, the results indicate an only weak correlation between a severe natural disaster and external debt what can be related to the restrictions of already highly indebted SIDS to access adequate financing.

The paper discusses the implications for financing stronger resilience to disasters in the future and calls for stronger multilateral cooperation and greater flexibility in the accessibility to pre- and post-disaster financial instruments.

March 6th, 2017, Santiago, Chile - Smaller but more frequent disasters accounted for up to half of deaths caused by climate events in Latin America and the Caribbean between 1990 and 2014, FAO said today.

According to a joint FAO / UNISDR-Americas document (Spanish only), developed to serve as a basis for a regional risk management strategy for the agricultural sector in Latin America and the Caribbean, there has been an increase in losses associated with small-scale disasters, known as "extensive events".

These are small-scale but high-frequency events that result in fewer loss of life (less than 25 fatalities) and damage to infrastructure (less than 300 homes destroyed), so they commonly go unnoticed in public opinion.

Between 1990 and 2014, for each intensive event there were 177 extensive events. Cumulatively, these "silent disasters" generated more than half of all human losses due to climate events: 22,400 casualties. Extensive events affected more than 90% of people affected by climate disasters during that period: a total of 115 million people.

This situation is especially important in a food producing region such as Latin America and the Caribbean, where the agricultural sector - which employs almost one third of the working population- suffered 13 percent of the damages caused by disasters.

The 2021 Small Business Credit Survey (SBCS) found that 1 in 10 small employer businesses suffered losses from a natural disaster during the prior 12 months.1 According to the National Centers for Environmental Information, the United States experienced 20 billion-dollar natural disasters in 2021, making it one of the costliest years in recent history.2 Major events included Hurricane Ida, the historic cold wave in Texas and other southern states, and the destructive wildfire season in the West. To more deeply explore the impact of these and other natural disasters on small businesses, the SBCS includes a module of natural disaster-related questions for affected firms. This fact sheet outlines some of the major findings from the 2021 SBCS for employer firms with respect to natural disaster impact.

Access to small loans and grants is key to small business survival after a disaster. The report finds that revenue losses outweighed asset losses for small businesses in disaster-affected areas (FEMA-designated disaster areas) in 2017. Among affected firms:

The community development field can play a role in helping small businesses recover and become more resilient in the face of natural disasters. Lenders and the public sector can help make small dollar loans and grants available quickly after an event. This can make the difference between small businesses closing and getting back on their feet, which has ripple effects for wages and people staying in their homes after a disaster.

Including diverse stakeholders in planning ahead for the next natural disaster can help make disaster recovery more responsive to community needs. Organizations and agencies that already have relationships with small businesses can help them prepare for the next disruptive event. For example, helping small business owners assess their insurance needs and move their records online can minimize disruption to their operations when the next event occurs.

The report concludes with examples of cross-sector collaboration in the community development field from across the country. For instance, in the wake of the 2017 fires in California, the state partnered with the private sector to help facilitate small business lending. The California Infrastructure and Economic Development Bank (IBank) committed $10 million to the Disaster Relief Loan Guarantee Program. The fund, which operates on a rolling basis, helps small businesses secure loans in the immediate aftermath of an event, as well as over the long term when other sources of relief may have ended. The fund guarantees up to 95% of a qualified disaster relief loan, allowing small businesses to secure more favorable interest rates, and funding that might otherwise not be available, from private lenders on loans for repairs and economic losses. Local nonprofit financial development corporations in the state help connect small businesses with banks in their area.

The first post of this series found that small businesses owned by people of color are particularly vulnerable to natural disasters. In this post, we focus on the aftermath of disasters, and examine disparities in the ability of firms to reopen their businesses and access disaster relief. Our results indicate that Black-owned firms are more likely to remain closed for longer periods and face greater difficulties in obtaining the immediate relief needed to cope with a natural disaster.

Sixty-three percent of small businesses that reported natural disaster-related losses were forced to close temporarily. Although the fraction of firms that temporarily closed is relatively similar between Black- and white-owned firms, Hispanic-owned firms were more likely to be forced to temporarily shut their doors (see left panel of the chart below). There are also pronounced disparities in the length of closures for impacted firms (see right panel of the chart below). For example, 34 percent of Black-owned firms and 23 percent of Hispanic-owned firms were forced to keep their doors shut for greater than three months as compared to only 16 percent of white-owned and 6 percent of Asian-owned small businesses.

In the aftermath of a disaster, small businesses experience an increase in demand for funding to replace damaged properties and replace lost revenues while they are temporarily closed or operating at reduced capacity. Immediately after a natural hazard, firms can tap into existing cash reserves or emergency funds. According to research by the JPMorgan Chase Institute (JPMCI), the median small business holds a cash buffer large enough to support twenty-seven days of their typical outflows. However, this number does not account for funds needed to repair or replace property and physical assets damaged in a disaster. Moreover, firms in labor intensive and low-wage industries have fewer buffer days relative to high-technology or professional service enterprises.

Property insurance can help firms repair and replace direct physical damages, and business disruption insurance can cover lost incomes and operating expenses that continue while the business is closed. Previous research has documented that only 30-40 percent of small businesses have business disruption insurance.

Firms whose losses are not fully covered by insurance can turn to funding from the federal government if located in a Federal Emergency Management Agency (FEMA)-designated disaster area. The Small Business Association (SBA) provides long-term, low-interest loans to repair or replace damaged property. The SBA also offers Economic Injury Disaster Loans (EIDLs) of up to $2 million to meet expenses the business would have paid if the disaster had not occurred. FEMA provides recovery grants to small businesses, but only through referral upon completion of the SBA loan application. State and local relief programs intended for small businesses are limited, and state governments often appropriate emergency funds only after a disaster declaration is made, which delays immediate assistance. 041b061a72


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