International Cooperation at Grass Roots Level...Bringing Science to the Art of Underwriting TM International Cooperation at Grass Roots Level Haresh C. Shah Stanford University RMS,

Bringing Science to the Art of Underwriting™TM

International Cooperation at Grass Roots Level

Haresh C. Shah

Stanford University RMS, Inc

World Seismic Safety Initiative

ASTS Seminar in Ulaan Bataar, Mongolia

Earthquake Disaster Mitigation

Research & Practice in Mongolia

March 6-8, 2007

2CONFIDENTIAL© 2007 Risk Management Solutions, Inc.TM

Changing Demographic Profile

0

5

10

15

2 0

2 5

3 0

3 5

4 0

Tokyo

Seoul

New York

MumbaiDelh

iMex

ico C

itySao

Paulo

Dhaka

Los Angele

sJa

karta

Lagos

Manila

-Quez

onCalc

uttaKara

chi

Buenos A

ires

City

Popu

latio

n in

Mill

ions

High per capita income

Low per capita income

Source: Munich Re, Megacities- Megarisks

15 Most Populous Cities in the World in 2015


Changing Demographic Profile (cont’d)

0.00

1.00

2.00

3.00

4.00

5.00

1950 1975 2000 2030

Popu

latio

n in

billi

ons

Urban population in industial countries Rural population in developingUrban population in developing countries Rural population in industrialis

Source: Munich Re, Megacities - Megarisks

The Gap is Widening


How Well Are We Doing? (cont’d)

Recent events in the last 3 years have shown that we are not doing too well.

– The Sumatran Earthquake and the Great Indian Ocean Tsunami

285,000 deaths and more than $15 billion losses.

– The Katrina Hurricane and the New Orleans FloodsAlmost 1000 deaths and total economic losses reaching $200 billion.

– Pakistan/India EarthquakeMore than 50,000 deaths and billions of dollars of losses.

We really have a problem on our hands.


Observations from Data

Economic losses are increasing with time

No progress in fatality reduction

Developed countries have made progress in reducing fatalities but not in economic losses

Developing countries have not made any progress in reducing fatalities or economic losses


Rational (3-Step) Approach to Manage Risk

Understand the Risk

Quantify the Risk

Minimize the Risk


BUILDING NATIONAL CAPABILITY IN EARTHQUAKE ENGINEERING

Requires:

Involvement of Multidisciplinary Experts.

– Academics

– Professionals

– Government Personnel from Local, State and Central Government.

– NGOs.

– General Public or Consumers of Information.


BUILDING NATIONAL CAPABILITY IN EARTHQUAKE ENGINEERING

(Continued)

Requires:

A Clear Plan for Raising Awareness.

A Clear Implementation Plan.

A Bottoms-up Approach to Developing Disaster Management Plans for All Major Urban Centers of India.


MULTI-DISCIPLINARY TEAMS

HAZARD

Ground Motion

VULNERABILITY

Land Use ZoningBuilding Codes

RISK ASSESSMENT

Insurance/Reinsurance/Finance

Social SciencesRecovery Operations

SOCIAL, POLITICAL, ANDECONOMIC INFLUENCES


A CLEAR PLAN FOR RAISING AWARENESS

Talking and Teaching to School Children. Earthquake drills.

College Level Courses on Earthquakes in Science and Technology Programs.

Public Education Through

– Information Dissemination (Brochures, “What to do” instructions, Radio,TV, Programs, Newspaper Articles).


A CLEAR PLAN FOR RAISING AWARENESS(Continued)

Public Education Through

– Declaring One Day of the Year as “Earthquake Preparedness Day”.

Professional Education and Accountability.


CLEAR IMPLEMENTATION PLAN

Creating National Database on Hazard, Exposure, Vulnerability and Risk (GIS Tools).

Adoption of Building Codes with Earthquake Provisions.

A Clear Accountability for Implementing Code Requirements by

– Owners, Architects

– Engineers

– Contractors

– Government Inspectors


CLEAR IMPLEMENTATION PLAN(Continued)

Professional Organizations who can “License” Various Professionals in the Process.

Development of National Level Tools to understand Regional Vulnerability and Risk. (Example: HAZUS)


BOTTOMS-UP APPROACH IN DEVELOPING DISASTER (EARTHQUAKE) MANAGEMENT

PLANSPlans must be “Inclusive and must be developed through Bottoms-up Approach.

All Professionals (Police, Firefighters, City/State Government Officers, NGOs, Neighborhood Groups) must be knowledgeable about the Plans.

Frequent Simulations and Drills.

Regular updating of GIS Data Bases and of the Plans.


HOW DOES A REGION IMPROVE ITS KNOWLEDGE ABOUT EARTHQUAKE RISK

& ITS MANAGEMENT?

Before

During

After

Community


BEFORE

Awareness.

Strong Motion Instruments -- Recording & Analysis of Past Data.

Seismic Hazard Mapping (Zonation/Macro).

Seismic Microzonation for Urban Regions.

Design and Construction Codes.

Education on Seismic Risk and Responsibility of Engineers, Contractors, Architects, Government


BEFORE(Continued)

Inspection Departments, Owners, General Consumers.

Create “Seismic Protection” Culture.

Develop Disaster Management Plans.


DURING

Education of Public as to what to do while it is shaking to protect lives and property.

Educate utilities and organizations in charge of Disaster Management as to what and how to communicate information on the ongoing disaster.

Implementation of DMP.


AFTER

Rescue and Recovery Process Implementation.

Implementation of DMP.

Tagging of Facilities for Safety Evaluation.

Clean-up Process.

Short-term Housing, Water, Sewage, Electrical, Communication, etc., Restoration.

Reconstruction, Retrofitting.

Learning from the Event for Future Improvements.


Discontinuity Between Knowledge and Performance

Knowledge Generators are not talking to Knowledge Users & Knowledge Implementers.

Experts talking to Experts can not close information transfer loop.

Lack of understanding of who are the movers and shakers on the part of Knowledge Generators.

Lack of articulation of where the ownership of the problem lies.

Reaching out and connecting the Last Mile is missing.


Source: Financial TimesSource: Financial Times


Source: Financial TimesSource: Financial Times


Some Suggestions for Creating Effective Partnerships

Understand and communicate incentive for Risk Mitigation to General Public.

Partner with Media to communicate incentives and costs.

Partner with Financial Institutions to communicate incentives and costs.

Partner with Insurance/Reinsurance Industry to mitigate risk through Risk Transfer.

Develop products like micro-insurance and micro-credits to help low income and rural population to transfer risks and to improve the risk profile of their homes.


Concluding Remarks

Dynamics of Demographic changes require us to develop true International Partnerships for Natural Disaster Mitigation.

“Business as Usual” has not worked. Innovative methods are needed to get the job done.

Unless society understands properly the cost/benefit equation of Risk Mitigation strategies and understands personal, corporate and societal incentives, it would be difficult to reduce Natural Disaster Risk.


Thank You

International Cooperation at Grass Roots Level...Bringing Science to the Art of Underwriting TM International Cooperation at Grass Roots Level Haresh C. Shah Stanford University RMS,

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