Two competing factors affect the impact of natural disasters in our time: one is population growth, particularly in junctures of geographic features, such as river outlets and intersections, coastal areas, valleys, etc., that are more exposed to elements. The other is technology that reduces the damage such disasters make, e.g., emergency and trauma medicine, rescue vehicles, communication and coordination of relief efforts, etc.
For each country, it is a matter of public policy to manage both factors so as to minimize the damage of a natural disaster. It seems likely that governments of Indonesia, Sri Lanka, Thailand, India, Myanmar and the Maldives will rebuild their coastlines in a way that reduces the impact should (heaven forbid!) something like this happen again.
Perversely, it's pretty unlikely that there will be another tsunami in the Indian Ocean anytime soon (that tectonic plate has moved). It is more likely that the next natural disaster will be elsewhere and will overwhelm other governments.
The "dismal science" of economics would explain some of this. Natural disasters such as the Sumatra tsunami occur rarely. The probability of one particular area being hit is very low, though the impact of the event is staggering. This should guide the investment decisions (and not just insurance underwriting decisions) about such areas - which is to say nearly all major population centers in the world.
Let's say there's a 0.5% chance in any given year that a given city will be hit by a cataclysmic catastrophe. This means that there's a 5% chance that it will happen in 10 years; 22% in 50 years; 39% in 100 years; and 71% in 250 years. These are timeframes beyond the span of any elected government and even our our own lifetimes. Any society with scarce resources will have to compare the cost of protecting its people (which may include relocating the entire city) against the cataclysmic event with the cost of protecting them against far more certain (but less far-reaching) dangers.
These always seem like easy decisions after the fact. Governments in Thailand, Sri Lanka, and elsewhere will put up wave-breaking barriers in the next few years, but I'm not so sure San Diego will.
Perhaps it is time for an honest risk assessment of the world's major population centers and a rigorous approach to making investment decisions about protecting them against natural disasters. It's a harsh calculation to make, but it's necessary.
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