From Afghanistan in the west to Bangladesh in the east, floods could cost South Asia -- home to a fourth of the world’s people -- as much as $215 billion each year by 2030, according to the World Resources Institute’s global flood analyzer launched in 2015.
“Companies with operations on coasts, next to large rivers, on low-lying flood plains and in urban areas with poor drainage and sanitation are at greatest risk,” said Tom Hill, executive director, crisis and security consulting, at Control Risks in New Delhi. "More rain and extreme weather will not only hit businesses in South Asia, but also global companies that source their products and raw materials from the region."
At least 1,200 died last month as water swamped cities like India’s financial capital Mumbai, its technology hub, Bengaluru, Bangladesh’s capital Dhaka, Pakistan’s financial heart, Karachi, as well as swathes of Nepal and India’s eastern states of Bihar and Assam. In the coming decade, devastating floods are expected to increase as changing weather patterns worsen risks in the region, climate researchers say.
Already floods affect more than 9.5 million people in the region each year, with GDP worth $14.4 billion and $5.4 billion at risk in India and Bangladesh respectively, according to WRI.
In 2016 alone, Asia reported losses worth $87 billion from 320 natural disaster events, the world’s biggest reinsurer Munich Re reports. Of this, $77 billion were uninsured losses.
While villages are more directly hit by droughts, it is cities that bear the brunt of flood-related losses, Jatin Singh, chief executive officer at private weather forecaster Skymet Weather Services said in a phone interview.
Thirty-four people died when Mumbai experienced its worst floods in more than a decade on Aug. 28 through Aug. 29, with the hardest-hit areas reporting as much as 150 mm (6 inches) of rain within an hour, according to forecaster AccuWeather. On Aug. 31 in Karachi, 23 people were killed when the city was swamped by 48 mm of rain.
Meanwhile, two rounds of flooding in Bangladesh this year added to its import bill after the government was forced to bring in 1.5 million tons of rice after six years of self-sufficiency.
Flooding accounted for 47 percent of all weather-related global disasters between 1995-2015, the United Nation’s Office for Disaster Risk Reduction said in a report. Of the 2.3 billion people affected, 95 percent were in Asia. In a region that houses three of the world’s 10 most-populated countries -- India, Pakistan and Bangladesh -- the cost to lives and livelihoods adds up.
Absence of resiliency planning by governments in public infrastructure projects, fuel supplies and electricity distribution networks suggest that problems arising out of changing weather patterns are likely to continue to pose significant threats, according to Siddharth Goel, a senior analyst at Control Risks.
While companies in South Asia aren’t known to have realigned investment plans because of weather-related disruptions, more managers are trying to understand flood-related risks to cut losses, Goel said.
Most of these are infrastructural risks, including electricity and technology backups for companies, costs of repairing dams, roads, embankments for governments and the provision of flood relief, said Arivudai Nambi Appadurai, senior researcher at WRI.
Appadurai, who studied the 2015 floods caused by 17 days of continuous rains in his home town Chennai and this year’s floods near Nepal’s capital Kathmandu, said planners need to adapt by changing the way cities build infrastructure.
“How can we blame only climate change when our storm drains are clogged?” Appadurai said by phone from Chennai. “And all of these risks are exacerbated by the unplanned expansion of our urban sprawls.”
Lack of city planning means about 130 million people, equal to the population of Japan, live in slums or informal settlements across South Asia, according to the World Bank. These settlements, which often house small-and-medium sized businesses like the Dharavi slums in Mumbai, suffer the worst flood damages.
With almost 250 million more people expected to live in South Asian cities by 2030, investment in climate change-resilient urban infrastructure is gaining new urgency. India, Bangladesh and Nepal are currently investing more than $32 billion on building 78 water projects to combat flooding, according to BMI research.
With once-in-a-100-year freak weather events now taking place every three-to-four years, policy makers and central banks must factor in climate risks when formulating plans, said Raghuram Rajan, India’s former central banker, in an interview.
“It’s time policy makers take these risks into account,” Rajan said. “They absolutely should.”