Risk Management: What is it and How to Do it Right

Question 1 

Based on the number of charity organizations and relief programs for natural disasters in the United States, one can conclude that Americans are generous and compassionate people. They are often willing to support both local and international causes that bring relief to those that are in need, especially those that are affected by floods. However, with time, people have stopped giving to those causes for various reasons. Most of the time, either the budget is overstretched or there is a negative reaction to pressure tactics. The circumstance where people stop giving to a cause they supported in the past is referred to as donor fatigue. An example of the scenario is the National Flood Insurance Program, whereby critics argue that those who live in floodplains are responsible for the disasters that befall them. therefore, they are aware of the risks of floods, and taxpayers should not subsidize those who choose to live in those areas (Kamogawa, Ofuruton & Ohtsuki, 2005). 

The scenario described can be termed as donor fatigue. Those who contributed to such relief causes for people affected with natural disasters start to decline. This claim is made without the consideration that resettlement projects for people living in places likely to be affected by disasters is also expensive. Land is cheaper in such areas and the population is sparse (Kamogawa, Ofuruton & Ohtsuki, 2005). Most people choose to settle in such areas because it is proportional to their standards of living. Some of them settle due to lack of awareness on the risks associated with those regions. Donor fatigue is expected because most of the areas affected by floods and other natural disasters are repetitively hit. 

Critics that claim that people who settle in disastrous regions are responsible for the things that happen to them should understand that it is not their choice, but circumstances which lead them to settle in such areas. Therefore, the situation is donor fatigue, which is expected. 

Question 2 

Risk management projects aim to project future disasters and propose and implement ways in which the catastrophic damage can be minimized. As a quest to reduce the amount of damage, centers such as MCEER came up to help communities to deal with disasters by developing knowledge and tools to increase disaster resilience. Resources from MCEER would have helped to reduce the immensity of the 1995 Kobe, Japan earthquake. Such resources predict future occurrences of earthquakes by doing prior studies which show how far the damage may be. This can be concluded after an analysis of the failures that led to the occurrence of the earthquake, which caused death of a massive number of people and destruction of property and homes (Bai, 2011). Such resources would have helped to set damage control projects which help to evacuate people earlier and save worthy property. 

The most common formula for risk management is expressed as probability + consequence + mitigation cost = informed decision. This formula should have been used to make the people more resilient to that memorable earthquake. Geotechnological factors and other human activities contributed to occurrence of the earthquake. If there were enough resources, then the damage would have been reduced. However, it cannot be concluded that the responsible parties were incompetent or irresponsible. This is because at the time the earthquake occurred, technology had not developed to a point that it has currently (Bai, 2011). The factors that led to the catastrophe were uncalled for and nothing much would have been done to reduce the immensity of the disaster. The people responsible cannot be declared incompetent because they had minimal information on the things that caused the earthquake. Kobe was just unlucky. 

References 

Bai, N. (2011). Donor Fatigue.  Scientific American ,  305 (1), 26-26. http://dx.doi.org/10.1038/scientificamerican0711-26a 

Kamogawa, M., Ofuruton, H., & Ohtsuki, Y. (2005). Earthquake light: 1995 Kobe earthquake in Japan.  Atmospheric Research ,  76 (1-4), 438-444. http://dx.doi.org/10.1016/j.atmosres.2004.11.018