MACROECONOMIC

MANAGEMENT
&
SUSTAINABLE
DEVELOPMENT
P.NAGARJUNA REDDY
MACROECONOMI
CS
■ Macroeconomics is the branch of
economics that studies the behavior and
performance of an economy as a whole.
■ It focuses on the aggregate changes in
the economy such as unemployment,
growth rate, gross domestic product and
inflation.
SUSTAINABLE
DEVELOPMENT
■ Sustainable development is the organizing
principle for meeting human development goals
while at the same time sustaining the ability of
natural systems to provide the natural resources
and ecosystem services upon which the economy
and society depend.
■ The desired result is a state of society where living
conditions and resource use continue to meet
human needs without undermining the integrity
and stability of the natural system.
■ Sustainable development can be classified as
development that meets the needs of the present
without compromising the ability of future
generations.
 INTRODUCTION
■ Policy initiatives to achieve sustainable development have been
influenced by natural disasters in many developing countries
■ Effective approaches are needed to coordinate the efforts to minimize
the impact of natural disasters to ensure sustainable development
■ Disaster characteristics and macroeconomic and human development
levels are interrelated. Higher human development levels result in less
disaster impacts and quicker post-disaster recovery of economy.
■ Countries with heavy devastation by natural disasters may not be able to
compete in global economy.
 INTRODUCTION (contd.)
■ Disasters constrain development in two ways
– They affect the economic activities
– Absence of integrated development policy frameworks
■ Level of macroeconomic parameters and human development
indicators play a vital role in determining the impact of disaster
losses.
■ Disasters are not ‘natural’ but they are the final effect of the collision
of ‘natural hazards’ with ‘vulnerabilities’ and ‘exposures’.
 Evaluation of Disaster Impact
■ A country’s disaster vulnerability is the combined interaction of
community exposure to natural disasters, the susceptibility and
defenselessness of communities against natural disasters and the
community capacities to resist their negative impacts among other
social and economic interactions.
■ Disaster risk=function ( Hazards, Vulnerabilities, Exposures)
■ Hazards are defined as natural calamities, vulnerabilities as societal,
economic and environmental aspects and the exposure as the level of
danger that people and the property face in the event of any natural
hazards.
Emergence of Disasters
 Evaluation of disaster risk

■ Risk = f1 [ Hazard (H), Vulnerability (V), Exposure (Ex) ]

■ V= f2 [Social (S), Economic (E)]
■ S= f3 [Poverty (P), Education (ED), Health quality (HQ),
Population (Pop)]
■ E= f4 [GDP, Income Level (IL), Indebtness (ID)]
■ Human development Index, HDI = f5 (Per-capita Income,
Educational level, Health quality)
 Human development
vs
Natural Disasters
■ Several reports imply that Human loss and suffering are considerably
higher in countries with low human development.
■ Human development index incorporates literacy rate, life expectancy and
per capita income.
■ Improving HDI will reduce impact of natural disasters in any country
■ Since hydroclimatic disasters occur frequently and cause more human loss
and sufferings, compared to geophysical disasters, they must be due
importance for investment in disaster reductions
■ A country’s income level plays a crucial role in shortening the recovery
period after a disaster. (Unlike economic losses, loss of human lives is
higher in lower income countries)
 Role of Mitigation and
Preparedness
■ Disaster risk can be reduced if
– Exposures are moved away
– Vulnerability levels are reduced
– Effective macroeconomic management
– Environmental conversation measures

■ Risk = function [ (Hazards, Vulnerabilities, Exposures)/

(Mitigation, Preparedness) ]
Reducing disaster impact through
mitigation and preparedness
 ECONOMIC RECOVERY
■ Economic recovery, after a disaster, depends on the countries capacity
and capability to recapture the lost growth as quickly as possible.
■ It depends on
– Strong economic performance
– Economic diversification initiatives
– National and regional risk transfer systems
– Economic integration
– Appropriate national policies
– Saving and consumption pattern of citizens
Role of FOREIGN ASSISTANCE
■ Quick international response raises working spirits of the affected.
■ Relief assistance in form of aid flows and debt relief can also raise
hope of quicker recovery and early resumption of active economic
growth.
■ Overwhelming resource addition and accumulation will contribute
towards secondary disasters due to improper coordination.
 Issues to be considered for
economic management and risk
■ Activities from structuralreduction
inventions to community based disaster
management (which reduces hazard and vulnerability) should be
coordinated.
■ Collaboration among stakeholders to promote initiatives of disaster
risk reduction and enhance public awareness and understanding of
disaster risks.
■ Development of disaster risk reduction framework and establishing
strong linkages to existing frameworks like HFA, UNDAF etc.
■ Stronger lobbying at regional level for investment in disaster reduction
and development to transform commitment into best practice.
 Issues to be considered for
economic management and risk
reduction (contd.)
■ Creating a futuristic vision of real time disaster among
communities and highlighting best disaster risk management
practices.
■ Proper coordination between resources and needs
■ Pre-Disaster Recovery Planning to reduce economic vulnerability
 CONCLUSIONS
■ Capacity of developing countries, like in Asia, has to be improved w.r.t.
economic and social views
■ Most of victims of natural disasters come from very poor and vulnerable
communities whose individual capacity to overcome their impacts are
extremely limited.
■ Even though the primary job is to assist affected people, even more
importance is to be given to preparedness of community and
mobilization efforts.
■ A good preparedness rapidly enhances the effectiveness of international
assistance which is provided to countries affected by natural disasters
THANK YOU