The global economy remains badly prepared for low-probability but high-impact interruptions such as last year’s Japanese tsunami and the Icelandic volcanic ash cloud in 2010, according to a leading think-tank.
Chatham House, the London-based policy institute for international affairs, says in a new report published on Friday that poor communication and disaster planning have left global supply chains, economic growth and human welfare at risk. In the UK, for example, economic production could probably be sustained for only a week after a disruption from a major natural disaster or terrorist attack.
The report focuses on the effects of the ash cloud from the Eyjafjallajökull volcano in Iceland, which shut down much European air travel for a week. It says that together with scientific uncertainty, the response was hampered by poor communication between industry and government and by politicians reacting to short-term pressures rather than properly assessing risks.