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Pakistan's challenge: How to lead in the wake of catastrophe

Erwann Kerjan
Dr. Erwann Michel-Kerjan teaches at the Wharton School of the University of Pennsylvania and is Managing Director of the Wharton Risk Center, which for over 25 years has been at the forefront of research into extreme events. He is the author of several acclaimed books, including At War with the Weather(with H. Kunreuther, MIT Press) and The Irrational Economist(with P. Slovic, PublicAffairsBooks).

As I write this, more than 2,000 people have died from Pakistan's worst-ever floods, another 4 million are homeless -- a total of 20 million have been affected (more than the combined total of individuals affected by the 2004 Indian Ocean tsunami and the 2010 Haiti and Chile earthquakes). As a reference, nearly 1,800 people died because of Hurricane Katrina and subsequent flooding of New Orleans. In a way, it's almost a miracle more people have not perished in this unprecedented catastrophe in Pakistan, given that protection there is typically very low.

Given its topography and the monsoon season in this part of the world, the country is prone to flooding. Serious flood episodes occurred in 1950, 1977, 1992, 1993, and to a lesser extent in 2007. But never before have the heavy monsoon rains been so devastating. To get a sense of the scale of this extreme event, as much as 60,000 squares miles are affected, or one fifth of the country's total land area.

The Pakistani government needs to rapidly learn "large-scale" disaster management. Many do not appreciate there is a radical difference between traditional disaster management and catastrophic disaster management. In such catastrophes, the resources and collaborative effort needed simultaneously grow exponentially. And, as we learned here with Katrina, catastrophes of this size can rapidly overwhelm even well-prepared rescue teams. Dealing with a series of small floods is not equivalent to dealing all at once with millions of your citizens being homeless and at risk from drinking contaminated water. This "large-scale effect" must be acknowledged and addressed.

In addition to the human tragedy, the government will soon face a second challenge, an economic one. Pakistan will need to access sufficient cash to provide emergency care to victims, but also secure the necessary budget to start the rebuilding process. Let's look at these two facets in turn.

The international relief aid. The United Nations has called for an emergency appeal, but aid is arriving slowly. One reason might be what I would call the donor fatigue syndrome. This year has seen many disasters. The globe united within hours of the earthquake in Haiti in January and donations were of very large magnitude. But then another major earthquake occurred in Chile a few weeks later, then the oil spill in the Gulf of Mexico, then wildfires raged for weeks throughout many parts of Russia, all before these floods in Pakistan. There is a limit to what the brain (and the heart) can handle.

As a result, we are more likely to be taken by a disaster if it is the first one to happen in many years. As other catastrophes unfold, our capacity to be emotionally affected diminishes rapidly, as does our willingness to donate (especially in the current economic situation). This might seem unfair to some -- a victim in Pakistan does not deserve less attention and help than a victim in Haiti -- but the reality is that timing will always be critical.

The reconstruction challenge. Early estimates indicate that the costs of reconstruction for Pakistan could be $20 billion, if not more. This is where looking at disasters through an economic lens magnifies the difference between rich and poor/developing countries. Hurricane Katrina, the worst natural disaster in U.S. history, inflicted losses of $120 billion to 150 billion, but this hardly registered in the scale of the United States' $12 trillion GDP that year. The story is very different in low-income countries because disasters will affect economic development, if not become poverty traps.

Pakistan had a $165 billion GDP last year, which ranks it 43rd in the list of the world economies in absolute dollar terms (Central Intelligence Agency's estimates). With 170 million inhabitants (the 6th most populated country), the GDP per capital is only about $1,000, compared with $43,000 in the United States. Right here we see the tremendous difficulty ahead for a country with a history of high inflation rates. If the government does not organize the reconstruction properly, it also faces the risk of major political instability.

Pakistan illustrates a trend that is accelerating: in recent years we have seen the occurrence of many more deadly and costly disasters. Rapid increases in population and assets in high-risk areas, rapid urban development (often destroying natural barriers to flooding), and higher variability in climate patterns are to blame here. As a result, these disasters might not be that "natural" after all, but the result of our own decisions and activities.

Unfortunately, unless proper risk reduction measures are in place, the picture will not become brighter. Maybe the most important question the government of Pakistan must answer before the reconstruction phase starts is: How can we work with our population, enterprises and the international community to make sure the reconstruction effort does not solely endeavor to replace what was lost, but truly contributes to building a much more resilient Pakistan? And for the international community: If we do not act fast enough, are we ready to face the potential implications of severe political instability in that part of the world?

The next monsoon season starts in 11 months.

By Erwann O. Michel-Kerjan

 |  September 2, 2010; 1:47 PM ET |  Category:  Crisis leadership , Leadership Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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