Abstract
We discuss the long-run economic impact of natural disasters on affected countries by examining the case of flooding in Thailand in 2011. If the damage caused by disasters is really serious, industries will move out from the countries in question, and this outflow leads to a negative impact on the national economies in the long run. By using IDE/ERIA-GSM modeling and utilizing short-run forecasts for the basic setting, we estimate the seriousness of the flooding in terms of the long-term economic performance. Simulation results show that negative long-run impacts of the flood will likely be moderate as many companies’ first reaction to the flood was to seek possible relocation of their production sites within Thailand.
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Notes
- 1.
This section is excerpted and modified from Kumagai et al. (forthcoming, 2014)
- 2.
The ASEAN Logistics Network Map 2008 offers an example where the cost per km for railway is 0.85 times that of trucks. However, this is only the case when we ship a quantity that can be loaded onto a truck. Railways have much greater economies of scale than trucks in terms of shipping volume, so some industries such as coal haulage incur much lower cost per ton-kilometer. Therefore, we need to deduct this from the value in the ASEAN Logistics Network Map 2008.
- 3.
We could not obtain flood damage data for Cambodia in terms of economic values, so we do not assume any damage for Cambodia.
- 4.
Multiple answers were allowed.
- 5.
The CADP report (ERIA 2010) also compared the MIEC and the NSEC using IDE/ERIA-GSM version 3 and concluded that the MIEC has much larger economic impacts than the NSEC.
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© 2015 Economic Research Institute for ASEAN and East Asia (ERIA)
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Isono, I., Kumagai, S. (2015). Long-Run Economic Impacts of Thai Flooding on Markets and Production Networks: Geographical Simulation Analysis. In: Aldrich, D., Oum, S., Sawada, Y. (eds) Resilience and Recovery in Asian Disasters. Risk, Governance and Society, vol 18. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55022-8_8
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