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We're here with Warren Professor Howard
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Kruther who will talk about the
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implications of the earthquake in Nepal
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and the lessons it holds for other
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countries around the world. Welcome
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professor. Good to be with you Deborah.
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Well to first of all tell me what
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lessons do you think the United States
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and other countries can learn from what
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happened in Nepal and how they can
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better prepare for disasters?
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Well, first let me just say a word about
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Nepal if I could in the sense that this
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is an unbelievably devastating
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earthquake for the country and they are
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trying to recover and we will have to we
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can get into that a little later on but
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I did want to at least acknowledge the
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fact that they really are a country that
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has some challenges and are going to try
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to meet them. But in the context of the
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lessons for other countries, I think
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that what happened in Nepal is something
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that happens everywhere in the world. If
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something doesn't happen for a long
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period of time, it isn't going to happen
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to me is is basically how people feel.
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And Nepal had a very serious earthquake
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80 years ago. And it was it did
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devastate the country. And in the
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process, of course, people were a little
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bit more reluctant to think about the
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fact that an earthquake could actually
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occur in the future. And that is
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certainly true here in the United States
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as well. People do not take preparations
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for uh disasters until after they
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happen. And the countries that have
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actually learned from earthquakes may do
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a bit better. And Chile being one
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example of that. Mhm. Can you tell me
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more about the extraordinary steps that
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Chile took in order to prepare for
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disasters? Well, Chile is a country that
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has had a number of earthquakes and we
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were very fortunate, my colleagues Mike
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Yuseim and Awan Michelle Kjan and myself
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to have had access to a number of the
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top leaders in Chile, including former
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President Pinera to really look at
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essentially how they had recovered from
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uh the 19 the 2010 earthquake that was a
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very serious one. And the reason that
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they were successful with respect to
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recovering from that earthquake is that
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they had two features that I think are
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very important. One is that they had a
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past history of a number of earthquakes
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and they had learned from them and as a
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result of that they had taken steps
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including well- enforced building codes,
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people purchasing earthquake insurance
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to protect themselves. And the second is
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that they had leadership in the context
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of the new president who came in
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actually was sworn in two weeks after
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the earthquake and his leadership
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actually was enormously important and
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the our book called leadership
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dispatches really highlights that point.
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So how do you compare what happened in
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Chile to how the US government handled
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hurricane Katrina and hurricane Sandy
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for example? Well, hurricane uh Katrina
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was a real challenge as I think we know.
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There were levies that were really
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poorly designed. Uh and as a result,
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there was an enormous amount of damage
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and there were real challenges in the
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recovery process. And as a result, not
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only were a number of people killed as a
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result of that, but it took quite a
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while for the and still in the process
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of actually restoring uh elements of the
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city uh because of that damage.
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Are there certain states like such as
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California that actually do an
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extraordinary job of disaster
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preparedness? California does a
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remarkable job of of preparedness for
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earthquakes because they've had a number
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of earthquakes and they've learned from
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those earthquakes and as a result there
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is a lot of measures in place that will
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I think reduce the damage. Although I
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will say that very few people today only
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10% of the California residents have
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earthquake insurance. So there's going
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to be an interesting question as to
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what's going to happen if we do have a
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severe earthquake in terms of their own
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recovery. So from that vantage point,
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preparation on the part of the residents
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is is relatively uh in ineffective at
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the moment. When it comes to less
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developed nations, there's always the
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struggle to prioritize funding for
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immediate needs versus funding for uh
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future uh disasters. So what can a uh a
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developing country do to make sure
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they're uh prepared for disasters but at
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the same time they fund ongoing needs of
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the country. Right? Well, let's talk
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about Nepal as an example of that since
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they went through this very horrendous
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uh earthquake. Nepal actually did take
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some steps uh in the sense that many of
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the newer buildings were really enforced
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uh were built according to building
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codes that were enforced and to my
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knowledge and of course we'll find that
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out in in in the next week or so most of
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them did not suffer as a a large amount
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of damage uh and as a result of that I
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think you can the the city is at least
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KMU in the area was better prepared on
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the newer construction the challenge
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with a country like Nepal as we've all
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heard and and read about uh is that they
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have so many old buildings and a city
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like Bakapore outside of Kotmandu which
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historic treasures was really badly
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damaged and Kotmandu itself was damaged.
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I I should indicate uh I've learned a
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great deal about Nepal because my
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daughter Laura Kruther uh is an
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anthropologist who has studied Nepal and
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is obviously I've been there a few times
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for that reason and uh I'm tremendously
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impressed with the Nepales and their
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ability to sort of deal with the
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situation but we have discussed this
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since the earthquake and I think the
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general challenge that the country has
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is the leadership side and we'll have to
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wait and see how the government is going
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to have to deal with these issues
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because in a you do need leadership. Uh
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that's what Chile had. It's harder for a
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developing country. Haiti had enormous
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challenges after uh their earthquake. Uh
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Nepal is in far better shape in that
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sense than Haiti was where over a
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100,000 people were killed. Uh the death
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toll is 5,000. That's a large number,
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but really pales compared to what
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happened in Haiti. So I think we'll have
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to wait and see whether the government
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is going to be in a position to be able
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to take advantage of the situation. We
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do learn from catastrophes and there are
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the silver lining is you can do things
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better after a catastrophe than you can
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before. And let me give you one example
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in the United States just to highlight
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that uh before Hurricane Andrew that
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occurred in 1992. So a few years back
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now uh onethird of the buildings were
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built that did not satisfy building
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codes that the and they would have been
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saved had they met the codes and Florida
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was really not enforcing these codes.
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There was a wakeup call for Florida
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after hurricane Andrew and today they
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have the best building codes in the
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country or one of the best. So they
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learned from the disaster and the hope
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is that the developing countries can
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also learn and we're all hoping that
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Nepal can come out of this with a better
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understanding of how they're going to
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have to deal with disasters.
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In your opinion, what are some of the
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biggest mistakes that developed nations
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make when it comes to disaster
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preparedness? Well, I think the biggest
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mistakes and I wouldn't even call them
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mistakes. I think it's more in the
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context of constraints as you alluded.
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They don't have a lot of resources. So
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it's hard to all of a sudden say we are
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going to build everything so sturdy that
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will be prevented from another disaster.
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That's why the fact that new buildings
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in Nepal were built according to to code
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is a testimony to the fact that the
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country is doing that. Haiti for example
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did not have any building codes at all
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and a lot of the destruction occurred
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because of that. So it's the lack the
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resources and the constraints that
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really are a challenge and I think
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that's why in some sense uh you do need
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organizations like the World Bank uh to
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help out in in situations like that to
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maybe try to support uh these situations
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from the vantage point of individuals.
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They have a very similar problem. There
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are so many other things on their mind
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that it's very that are immediate needs
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that it's very very hard for them to
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devote time and resources to try to even
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think let alone deal with what they
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could do for a disaster. What about for
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developed nations? What are some of
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their biggest mistakes? Well, I think
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the biggest mistakes that that we face
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in in our country is what I alluded to
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earlier. the feeling that somehow it
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isn't going to happen to me and as a
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result I don't have to worry about this
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and that the costs associated with
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actually taking steps now are too high
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for us to put the resources in. And this
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is an issue that we have all of us have
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been thinking very very uh uh closely
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and deeply about in in the in the
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Wharton risk center. How do you begin to
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develop essentially strategies that are
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long-term that essentially are long-term
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in nature but that satisfy the shortrun
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needs? And so I think there are ways to
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begin to think about that and the
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develop hopefully the US will try to
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adopt some of these which is begin to
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think about long-term loans for example
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as a way of really spreading the upfront
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costs over a number of years. think
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about affordability issues and how
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you're going to deal with affordability
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in a way that will encourage essentially
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development in areas, but at the same
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time recognize that you have to be
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careful in terms of what you do and you
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have to make sure that you take care of
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people who can't afford a very high
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insurance premium. If there's a high
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premium that reflects risk and you have
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to help them out, but don't do it with
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an insurance premium, try to find other
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ways like means tested vouchers or some
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other mechanism that helps the
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low-income people because otherwise I
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think we're going to be in real real
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difficulty with respect to implementing
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some of these strategies that we all
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believe are desirable. What regulatory
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changes do you recommend that the US
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government take to make these remedies?
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Well, I think building codes being one
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example certainly not only with respect
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to earthquakes but with respect to
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floods and other disasters, making sure
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that buildings are welld designigned,
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that they are well enforced. Land use
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regulations are important with respect
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to that. And I'll tell you one
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regulation that we have been thinking a
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great deal about is related to
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insurance. And there is a general
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feeling that you need to subsidize
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premiums to help the low-income people
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as I alluded to. And one of the things
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that could be done and we feel is
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important let the insurance premium
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reflect the risk so that people know
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what they have to pay for to cover their
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risk and they also get rewarded. If it
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turns out that they take steps to reduce
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the risk they get a lower premium. So
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the premiums reflecting risk becomes
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important but then you have to feel
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figure out what you're going to do with
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the low income and the people who can't
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afford it or who need special treatment.
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That sounds logical but what is impeding
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these changes on the regulatory side.
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Well I think what's impeding it is we
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are all you know people are thinking
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purely about the short run in many of
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their decisions. We have a little
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expression that we've used and since
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you're asking this question I will use
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it here. Uh nimto behavior which is true
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of probably all of us but certainly true
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of politicians. Any idea?
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Can you explain? Not in my term of
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office if I can avoid that. And so
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thinking very short run makes it very
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very hard to deal with some of these
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long-term issues unless you can figure
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out a way to get rewards in the short
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run. And then I think in the United
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States uh certainly we have a certain
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degree of polarization in terms of
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different views on how to deal with this
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and that makes it very hard to get
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anything passed as we are aware of and
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hopefully that will change over the next
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couple of years and we'll just have to
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wait and see. Thank you professor. Good
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to be with you.
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[Music]
