DEVELOPMENT CONTEXT, CHALLENGES AND RESPONSES
Figur Figure 1: GDP Per Capita Growth (Percent)
The economy of Iran has experienced considerable developments
6
in recent years, of course with some ups and downs as depicted by
5
Figure 1. Such fluctuations were in great part resulted from
4
fluctuations in oil export revenues due to changes in the world oil
3
prices. Besides changes in oil revenues, the causes for such a
2
fluctuating economic performance must be traced back in
1
economic impact of the Revolution and the eight-year imposed war
0
with Iraq, among others. It was since the implementation of the
-1
First Five-Year Development Plan that the economy managed to
-2
improve. Since the economy was under pressure by high
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Source: CBI (2002, 2003 and 2005a)
population growth of 1980s, the growth rates of per capita GDP
during the recovery years after the imposed war should be considered.
Considering the dependence of agricultural products to climate changes, and bearing in mind the vast
drought in the said period, the low share of agriculture in GDP further dropped in favor of other sectors of
the economy, from 14.3 percent in 1991 to 13.7 percent in 2004.
The recovery of per capita growth rates between 1991 and 2004, compared with the low (and in some
years, negative) rates of the previous decades, was mainly contributed by a steep drop in population
growth. On top of that, considerable measures have been taken during the implementation of development
plans aimed at expansion of economic growth rate, control of inflation, reduction of foreign debts,
reduction of budget deficit, enhanced utilization of existing economic capacities, unification of the foreign
exchange rate and reduction of economic vulnerabilities caused by external shocks.
The Human development indicators can also reveal more facts about the development profile of the
country. Of three components of HDI, education index experienced lower growth compared to the other
two, namely per capita GDP and life expectancy at birth
Figur 2: HDI and its components (ercent)
0.8
(Figure 2). GDP index, despite its ups and downs resulting
from fluctuations in oil income, enjoyed the highest growth
0.75
and has been the driving force of human development index.
0.7
Moreover, owing to importance of health and medical issues
0.65
and special attention paid by government to these issues
0.6
through significant investment in health infrastructures
particularly in less developed and rural areas, life expectancy 0.55
experienced an acceptable improvement. This is further
Life expectancy index
Education index
GDP index
HDI
highlighted by the smooth trend of life expectancy index. The
Source: CBI (2002, 2003 and 2005a)
education index also experienced an increasing trend, though less speedy than the other two components of
HDI.
The Iranian economy is facing a big challenge in regard with economic and social needs of the
growing number of population. It will therefore be confronting a high supply of labour force and the
phenomenon of population ageing in near future. The young people are emerging into adulthood and,
together with the increasing number of migration inflows towards the large cities and economic poles of the
country, will sharply augment the size of the labour force and, therefore, need new economic and social
facilities like decent and secure jobs, education and health services.
A study of human development and its components, disaggregated by provinces, provides a clear
picture of disparities among regions and raises the necessity for planners and policy makers to pay due
1991
Draft Contribution of Iran into GAR 2009
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
1
2003
2004
attention to redistribution of development resources among regions (Figure 3). In the following pages, the
Figur contribution
3: HDI by Province
hypothesis that natural disasters have an important
in (percent)
such a regional disparity is tested.
90
Life expectancy index
85
Education index
GDP index
HDI
80
75
70
65
60
55
4
From a mere income point of view, one indicator 3
commonly used for assessment of poverty is the
2
percentage of population under the poverty line defined
as one dollar per day (based on purchasing power 1
parity). On this basis, poverty in Iran has decreased
0
Source: SCI (2004c and 2004f); MPO and UNDP (1999 and 2004).
annually by about 17.2 percent in average (Figure 4).
While in 1991 about 3.5 percent of the population had daily expenditures lower than one dollar this
proportion was limited to 0.3 percent of population in 2004. Certainly, this trend was accelerating from
1992 to 1998. However, it was slow in the following years and even increased in 2000 due to significant
increases in overall consumer prices from 1997 to 2000 and reverted to its decreasing trend due to support
policies in following years, which brought about improvements in people’s access to basic public health
and education services due to considerable declines in inflation rates starting from 1999.
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Figur 3: Human Poverty Index (HPI-1)
In Iran, in contrast with income poverty which is subject to
considerable fluctuations, human poverty is following a
stable decreasing trend (Figure 3). The difference between
the fluctuating trend of income poverty and the stable trend
of human poverty indicates that, in spite of decreasing
purchasing power (mainly due to increasing inflation) from
1998 to 2001, household expenditures for provision of
human necessities have been increasing.
30
25
20
15
10
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Source: Ministry of Health and Medical Education (1999a);
MPO and UNDP (1999).
Draft Contribution of Iran into GAR 2009
2
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Figur 4: Population with expenditures under $1
1991
es
ej
es
W
Source: SCI (2002a); Ministry of Education (2004); LMO (2000); Ministry of Science, Research and Technology (2004); Alizadeh et.al. (2000).
NATIONAL POVERTY PROFILE
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50
Overall, implementing comprehensive programs aimed at improving welfare indicators and access to
public services in recent decades have resulted in improvements in living standards of people in need, in
particular through improvements in level of social services despite the significant fluctuations in foreign
income from oil exports. Quality of national human capital has witnessed significant improvements such as
reductions in under-five mortality, access to safe drinking water, higher adult literacy ratios and improved
enrollment ratios in different educational levels, particularly in rural areas.
DISASTER INTENSIVE AND EXTENSIVE RISK PROFILE
Due to its geo-climatic situation, Iran is a natural disaster prone country. Based on DesInventar, totally
6,559 natural hazard events were recorded in Iran for the period of 1986-2007, which caused 74,019 deaths
and 508,301 buildings affected (damaged or destroyed). In average, 3,364.5 people were killed and
23,104.5 buildings were affected per year by natural hazards during this period.
Earthquake was the most frequent hazard in 1986-2007 accounting for 52.7 percent of total events.
Flood accounting for 38.1 percent of all events was in the second rank. Other hazards, which totally
account for 9.2 percent of events were as follow: storms (3.0 percent), landslides (1.9 percent), thunder
storms (1.4 percent), snowstorms (1.0 percent), hailstorms (0.9 percent), drought (0.5 percent), forest fire
(0.4 percent), avalanche (0.1 percent), strong wind (0.01 percent) and frost, liquefaction, rains and tornado
(altogether 0.04 percent). Except for floods, the upward trend of climatic hazards is evident from 1986 to
2007. Landslides and storms are the major contributors to this pattern.
Geologic events represented 53 percent of events, but responsible for 95 percent of recorded mortality
and 73 percent of buildings affected. While climatic events represented 47 percent of events causing 5
percent of mortality and 27 percent of buildings affected.
Drought, earthquake, flood and storm have been the most important hazards of the country in terms of
causing various risks to the people’s lives and property. Earthquakes have been responsible for 95 percent
of total mortality and 73 percent of buildings affected, followed by floods, which account for 4.5 percent of
total deaths and 23 percent of buildings affected. Rudbar-Manjil earthquake (1990) and Bam earthquake
(2003) were mega disasters of last two decades accounting for about 90 percent of total death. Floods in
Loretsan (1991), Tehran (1987), Golestan (2001) and Kerman (1993), which totally killed 1036 people, put
the flood among top 10 killer hazards of Iran for the period of 1986-2007. Drought has affected the people
more than all other hazards and accounts for 37 million affected people around the country, mostly in
Sistan Baluchestan, Fars, Bushehr, Yazd and Kerman provinces. Guno Typhoon (2007) affected more than
160 thousand people in Sistan- Baluchestan province.
Mortality trend, in general, indicates 27 percent decrease in period of 1997-2007 compared to 19861996. While occurrence of geologic hazard shows increasing trends up to 126 percent, but no change in
climatic hazards, mortality trend reveals 25 percent and 59 percent decrease due to geologic and climatic
hazards, respectively. Reasons which might explain the declining trend in number of deaths due to
geological hazards despite increasing number of events could be improved/expanded systems for
detecting/registration/reporting geological hazards and increased public awareness/evacuation measures
given occurred devastated earthquakes following pre-shocks in Manjil and Rudbar. The timely evacuation
before the major shaock prevented a phigh probable large death toll in Lorestan Earthquake on 31 May
2006.
Despite a great diffusion of hazard occurrence across the country, there is a concentration across a
small number of provinces. The least hit provinces by natural hazards, i.e. Zanjan, Markazi and Ghom,
have experienced 1 to 5 natural hazard events per year. At the other end, Fars and Kerman provinces
experienced 23 to 32 hazards per year. Only about 8 percents of Iran’s Shahrestans (Equ. To Districts) had
no recorded natural hazards for the period of 1986-2007. Numerous of provinces, including South
Khorasan, Kerman, Fars, Esfahan, Khuzestan, Lorestan, Kermashah, Ardebil, Gilan, Zanjan, Ghazvin,
Draft Contribution of Iran into GAR 2009
3
Golestan and North Khoeasan experienced at least 10,000 buildings damaged or destroyed from 1986 to
2007. Gilan and Zanjan were the most affected provinces in this regard.
Intensive/Extensive risk analysis
revealed that less than 1 percent of hazard
events were responsible for 92 percent of
total death and 62 percent of buildings
affected. Considering cut-off of 50 death
and 500 buildings affected, 96 percent and
90 percent of events account for 3 percent
of total mortality and 10.5 percent of total
buildings
damage
or
destruction,
respectively. This pattern is mainly due to
two major earthquakes of Rudbar-Manjil
(1990) and Bam (2003). While the
climatic hazards reveals different pattern
as about 2 percent and 0.5 percent of
climatic hazards were responsible for 43
Intensive/Extensive risk analysis, based on cumulative percent of event occurrence and death due to all-hazard
percent of total death and 10 percent of
(top), geologic hazards (bottom left) and climatic hazards (bottom right), I.R.Iran, 1986-2007
buildings
affected,
respectively.
Considering the cut-off of 50 death and 500 buildings affected, 98 percent and 92 percent of climatic events
account for 50 percent of total mortality and 32 percent of buildings affected.
120.0
95.4
Cumulative percent
100.0
97.1
100.0
99.4
99.0
80.0
60.0
40.0
20.0
2.8
3.6
6.0
8.2
1-50
51-100
101-500
501-1000
0.0
>1000
Death class
Event
Death
120.0
120.00
100.0
89.3
94.6
91.1
100.0
97.16
100.00
98.10
100.00
Cumulative percent
Cumulative percent
82.1
80.0
60.0
40.0
20.0
80.00
57.45
60.00
49.76
40.00
20.00
0.3
0.7
1-50
51-100
1.1
3.3
101-500
501-1000
0.0
0.00
>1000
Death class
Event
1-50
51-100
101-500
Death class
Death
Event
Death
POVERTY-RISK RELATIONSHIP
The number of dead people per ten thousand populations and the number of buildings destroyed or
damaged for a period of 1991 to 2006 has been considered as key variables that could explain for disaster
effects on human poverty indirectly. The models applied explain such effects on household expenditures to
measure the economic impact of disasters. Noteworthy that the study is not directly dealing with poverty
measures for two main reasons. First, poverty is a human concept that has a wide range of components,
from economic to social, cultural, environmental and even political ones. The concept of human poverty
has in fact been introduced to depict all such aspects of life. In mere economic terms, the expenditures
households spend on baskets of goods and services well represent their physical satisfaction. Second, the
standard poverty metrics like FGT are defined on the basis of a poverty line. For many technical reasons,
poverty lines are not calculated and reported officially in Iran, and doing so was out of the time limit and
extent of this study. While some rough estimations of the percentage of poor people are reported, they are
based on the international poverty line definitions of $1 and $2 expenditures per person per day.
The basic econometric model used here is
cti  it  1i ( Death)ti   2i ( Buildings )ti  3i ( Family Size )ti   ti
Where
cti is differences in real expenditures of the urban households in ith province at time t
(adjusted for prices using the urban CPI), (Death)ti and (Buildings)ti are the number of human losses per
thousand populations and buildings damaged or destructed, respectively, due to natural disasters in ith
province at time t, and the variable (Family Size)ti is included as a factor affecting people's economic well
being in many poverty studies.
The coefficients of the number of death as well as the number of buildings damaged or destroyed for
the most disaster-prone provinces were significant. This suggests that in these provinces, natural disasters
play a main role in economic disruptions of people's lives. In particular, Ardebil, Chaharmahal-o-Bakhtiari,
Draft Contribution of Iran into GAR 2009
4
Lorestan, Mazandaran, Khorasan, Hormozgan and Yazd are among the disaster-prone provinces where the
estimated coefficients in number of death, number of damaged and destroyed buildings, or both were
significant and consistent with the hypothesis of the study.
Based on differences in demographic, climate, and style of life contexts across provinces, the results
should be interpreted province by province. In Chaharmahal-o-Bakhtiari, for instance, natural disasters
(usually in the form of floods) have disturbed people's economic well being mostly through increasing the
number of dead people rather than through physical damages. In Hormozgan and Yazd, on the other hand,
disasters affect living standards through destruction of buildings.
An unexpected result is the positive effect of building damages and destructions on economic well
being of people in Mazandaran, Khorasan and Lorestan. The best explanation here, especially for first two
provinces, is that after exposure of intensive disasters in these provinces, considerable amount of financial
aid was offered by the government and public charity institutions as well as soft bank loans to reconstruct
the damaged and destroyed buildings and/or equip them with new furniture, which eventually resulted in
the affected households to become better-off.
The coefficient of family size has a theoretically right sign (vs negative) and is very significant in a
number of provinces, including East Azerbaijan, West Azerbaijan, Khorasa, Mazandaran and Hormozgan.
It means that increases in family size helps in reduction of expenditure changes for the whole family. In
other words, larger families enjoy increasing returns to scale.
As usual, the logarithmic specification of models reveals much better results. Disaster variables have a
significant negative effect on economic well being of people, especially in Ardebil, Khorasan, Khuzestan,
Fars, Kordestan, Golestan and Gilan, most of which are highly disaster-prone provinces. The estimation
results for family size also show considerable improvements for Ardebil, Tehran, Khorasan, Fars,
Kordestan, Gilan and Lorestan, where the coefficients have a negative sign and are statistically significant.
For most of the provinces, the elasticity of household expenditures with respect to building damages
and destructions has been estimated between -0.01 and -0.04, indicating a small effect of disasters on
people's well being. However, it is notable that Khorasan, Kordestan, Golestan and Gilan, suffer
considerably from disasters, as the elasticity is estimated in a higher range from -0.13 to -0.31. It is in large
part because disasters mostly affect people living in these provinces through physical damages rather than
life losses. For almost all provinces, the effect of life losses on people's welfare has been less than that of
physical damages, as the respective elasticity ranges from -0.02 to -0.11. One main reason here is that the
family bread-winners are less exposed to the risk of death due to disasters.
Do Disasters Affect Social Well-Being?
Besides the effect of disasters on their economic well being, as depicted by household expenditures, people
may also be affected by natural disasters through social channels. Health and education are two main social
variables that could represent the impact of disasters on social aspects of life.
The models depict differences in health and education situation across provinces as a result of disasterrelated human and physical losses as well as other conventional variables such as the average household
expenditures on health and the family size.
Healthi   i  1 ( Death)i  2 ( Buildings )i  3 ( Health Exp.)i  4 ( Family Size )i   i
Educationi  i  1 ( Death)i  2 ( Buildings )i  3 ( Education Exp.)i   4 ( Family Size )i   i
Since disasters affect social aspects of people's lives only in long term, data for the two disaster-related
variables are a 16-year accumulation, while data on health and education expenditures and family size are
Draft Contribution of Iran into GAR 2009
5
16-year averages. Data on the health and education variables refer to the final year of our time period. The
sample includes 28 provinces.
While building destruction and damages do not affect life expectancy, the number of death due to
disasters only have a very small impact. This, in fact, is a reasonable result as life expectancy at birth is a
variable that could not be easily affected by a limited number of human and physical losses due to disasters.
However, life expectancy is smaller for provinces with larger average size of the family. This is because
larger families spend less for healthcare per member of family. In other words, large families are subject to
economy of scale in healthcare spending.
A reliable conclusion from this section of the study is that health indicators have a significant and
negative relationship with family size. However, social capital is not directly affected by natural disasters,
at least in the short run. In particular, there is no evidence of theoretical and statistical significance in
explanation of education indices by natural disasters.
POLICY IMPLICATIONS AND RECOMMENDATIONS
Studying hazard and risk profile of Iran reveals some crucial points that would be worthy to be considered
in policy making of disaster risk reduction and preparedness. While earthquakes are responsible for 90% of
death due to all natural hazards in Iran, occurrence of destructive earthquakes would not be a surprise for
Iranian community during next decade. High levels of seismicity risks, low resistant buildings all over the
country along with high population density in urban areas increase various risks of Iranian communities
caused by earthquakes. Focusing the policies including techno-legal re-enforcements and investment of
resources on structural mitigation along with raising the public awareness and strengthening the response
capacity are highly recommended. It is worthy to mention that the country has taken effective steps in this
regard so far. As was mentioned above, decreasing trend of mortality comparing two periods of 1986-1996
and 1997-2007, despite the increasing trend in hazard occurrence, can be explained by number of
interventions in effective risk management.
Those measures include extensive investment in
improving/renovating the non-resilient structures in less developed and rural areas through provision of soft
loans and technical services, along with strengthening engineering inspecting systems throughout the
country. However, with regard to available resources and knowledge for improving buildings resilience to
earthquakes strengthening/institutionalizing those measures is highly required.
Occurrences of climatic events in Iran have been on upward trend in line with the global trend during
last decades. Nowadays, there is growing evidence that the communities are being suffered from the small
scale disasters with few numbers of death and damage to properties, which is called extensive risk. Since
the usually people and policy makers/decision makers follow headlines related to devastating disasters
broadcasted by media, there is a concern that small events would be ignored or underestimated by disaster
mangers and policy makers and even are underreported. Increasing pattern of extensive risk underpin the
need to strengthening local disaster management systems through enhancement of community-based
initiatives and strengthening the system at provincial and district levels. Fortunately most of the climatic
hazards can be warned early. The successful experience of early warning in Guno Typhoon emphasize on
strengthening of effective early warning systems.
The last but least policy implication that the current study suggests is the need for strengthening the
capacities of affected communities to rebuild their livelihoods than provision of non-targeted/equal
subsidies/aid to all affected population. This would help preventing adverse effects on people’s well-being
particularly extensive risks caused by climatic hazards.
Draft Contribution of Iran into GAR 2009
6