Bank Maskan, the state agent bank of Iran’s housing sector, provided 13,223 loans worth 3,185 billion rials ($13.5 million) to those affected by disasters, including floods and earthquakes, in 31 provinces across the country from Feb. 1, 2020, to Jan. 31, 2021, says Nader Qasemi, the head of the bank’s board of directors.
Applicants in Khuzestan Province received the highest number of loans in the country with 1,811 loans, followed by West Azarbaijan with 1,609 loans, Kermanshah with 1,599 loans, Lorestan with 1,403 loans and Markazi Province with 656 loans.
“In terms of value, Kermanshah accounted for the lion’s share of loans, with disaster relief loans for renovation and repair as well as purchase of home appliances worth 479.93 billion rials [$1.97 million] granted to applicants in the western province,” Qasemi was quoted as saying by Hibna.
Floods inflicted losses worth 90 trillion rials ($370 million) on Iran’s economy in the fiscal 2019-20.
The Crisis Management Organization puts flood damage in spring inundations during March-April 2019, which involved 15 provinces, at 60 trillion rials ($246 million).
To get a sense of just how big these figures are, you need to compare the registered capital of two major Iranian carmakers (Iran Khodro and SAIPA), which is about 50 trillion rials ($205 million), with the aforementioned flood damages caused during the 10 months, reads an article published in Shahrvand newspaper.
Three years ago, Kermanshah Province in western Iran was also hit by a devastating 7.3-magnitude quake that caused 80 trillion rials ($328 million) in damage.
Statistics show that only 3% of Iran are located in areas with a low risk of disasters. Iran is exposed to 32 out of 43 natural disasters, the most common of which are drought, earthquake, flood, wildfire and landslide. The Crisis Management Organization says 75% of Iran’s centers of population (geographical points that describe a center point of the region’s population) are exposed to flooding hazards and 80% of the country’s area are prone to other natural disasters such as earthquake.
The highest number of human deaths caused by any natural disaster in the country was associated with earthquake while flood and drought have brought about the biggest losses economically for Iran.
In addition, the acceleration of climate change over the past years is likely to make natural disasters even more frequent and more catastrophic in the country.
Commenting on Iran’s disproportionate vulnerability to natural disasters, Ali Beitollahi, the head of Engineering Seismology Department of Roads and Urban Development Research Center, said, “Over the past years and decades, our executive managers had been negligent in taking proactive policy approaches in the face of natural disasters whereas advance, short-, mid- and long-term planning rather than ‘after the event’ disaster response is needed to counter natural disasters.”
Referring to Japan where infrastructures have improved to direct rising water level of rivers to canals in order to prevent streets becoming afloat in deluge, Beitollahi said, “This comes as, in the absence of disaster prevention and preparedness like the dredging of Gorganrud River in northeastern Iran to facilitate and speed up the flow of water, floods caused extensive damage to the country in spring.”
A report by IMF entitled "Macroeconomic Outcomes in Disaster-Prone Countries" published in October 2019 categorized Iran among first quartile (0%-25%) of the annual probability distribution of natural disasters in non-disaster prone countries. Iran’s economic costs of natural disasters were equivalent to 0.27% on average and a maximum of 2.9% of the country’s GDP during 1998-2017.
The macroeconomic impact of natural disasters includes three stages. The first stage involves direct losses from the destruction of infrastructure and property. In the second stage, indirect losses accumulate from foregone output and incomes, and costs are incurred as individuals and businesses work around disruptions.
Finally, as the recovery starts, rebuilding of infrastructures and replacement of damaged goods lead to a temporary boost in activity and employment in the affected area. It also opens up the opportunity to upgrade infrastructures.
Apart from the cycle of impact and recovery from individual disasters, the periodic destruction of part of a country’s productive assets is an implicit tax on capital, which tends to deter investments and lower productivity and living standards on a sustained basis, the report concluded.
