In the automobile sector, Japanese firms were most heavily affected by the 2011 floods these firms and their family companies account for some 90 percent of sales and exports of automobiles in Thailand. This is especially true in today’s lean but complex manufacturing systems in which system resilience comes second to cost-efficiency. Source: Wikimedia Commons.Īccording to Haraguchi, place-based risk from economic density leads to global systemic risks from economic interdependence flood damage in one key node flows through an entire supply chain. Helicopter survey of flooding in suburban Greater Bangkok, 22 October 2011. If disaster hits those areas, which are economically dense, where the economic assets have been concentrated, the economic damage is going to be larger than in previous disasters,” even if improved emergency response reduces deaths. But if you look at the developed countries-industrial or emerging nations-their economic model has been to concentrate in urban areas. “When natural disasters hit less developed countries, the death toll still tends to be high. While the floods impacted a number of industries, electronics manufacturers and auto companies were particularly hard hit: Western Digital-producer of one-third of the world’s hard disks–lost 45 percent of its shipments, while Toyota, Honda and Nissan lost 240,000, 150,000 and 33,000 cars respectively.Īccording to Masahiko Haraguchi, lead author on the study, in industrial, emerging and developed nations, deaths from flooding have actually fallen in recent years-even as economic damage has skyrocketed. According to the United Nations Office for Disaster Risk Reduction, the country’s 2011 floods actually reduced global industrial production by 2.5 percent and damages cost the world’s top three non-life insurance companies $5.3 billion in claims, an amount greater than the cost of Japan’s massive earthquake and tsunami earlier the same year. However, because of its outsized role in global manufacturing, the impact of the disaster was not limited to Thailand. For months, soaking downpours saturated the countryside, inundating more than two-thirds of the nation, killing hundreds of people and devastating the economy.
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