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"Analysing how to incorporate natural disasters in the economic decision making."

For much of his career, Professor Mehmet Ulubasoglu’s research has been focused on getting the attention of policymakers.

Working in the Department of Economics within the Deakin Business School, Prof Ulubasoglu’s work has been published in a range of international journals, attracted citations across diverse fields – and importantly – plays a significant role in impacting policy.

Currently, he’s working with the Australian Government’s Bushfire and Natural Hazards Cooperative Research Centre (BNHCRC), which is investigating the economic impact of natural disasters.

‘It’s a joint project with the University of Melbourne and we’re analysing the impact of natural disasters – such as bushfires, storms and floods – on economic activity. This covers 19 different sectors identified by the National Council of Australia and includes manufacturing, agriculture, health, finance, communications, education and public administration,’ he explains.

Prof Ulubasoglu’s work with the BNHCRC builds on a range of national and international projects he’s undertaken that have been linked to government organisations. He’s also held consultancy roles for the World Bank, Asian Development Bank, and the Asian Disaster Preparedness Centre, and led a report on Australian food demand for the Rural Industries Research and Development Corporation.

He says that when analysing the impact of natural disasters (such in the BNHCRC project) the researchers explore both the negative and positive aspects of calamitous events.

‘Our objective in the project is to find out whether each sector is positively affected, negatively affected and unaffected then present these results to the government … there are a range of end-users, or government departments, who will then use these results in their decision-making.’

While it’s generally assumed that a natural disaster negatively impacts economic activity, he says that sometimes, the opposite occurs.

‘For example, we can find that moderate floods improve agricultural output, perhaps because different soils are brought in that work like a fertiliser for the existing soil. And bushfires and floods can increase health and communications activity because of the need to care for people and communities,’ he says.

On a recent trip to Nepal, Prof Ulubasoglu conducted a field trip 100 kilometres from Kathmandu and spoke with the local farmers who, interestingly, expressed disappointment that they hadn’t experienced moderate flooding.

‘They don’t want big floods but moderate floods bring some benefits…in these situations, our work is to inform and advise on policies that help reduce the damaging capacity of the big floods.’

He adds that some research results also reveal the notion of ‘creative destruction’ – or the positive effects of damaging events. 

‘For example if you take the the bombing of Vietnam by American planes during Vietnam War.  One of the findings is that there is no difference between bombed areas and non-bombed areas because the bombed areas were quick to converge to the non-bombed areas through activities such as constructions, recovery and rehabilitation. So the gap has closed and that’s an interesting result.’

Through the same lens, Prof Ulubasoglu and his co-researchers also looked at the 1990s convergence of North Vietnam’s communist state with South Vietnam’s market economy.

‘It’s important – from the point of view of some political theories – to see if communism is very damaging, or challenge the idea that it could never converge to a market economy. Even though it may take 10 or 20 years, it seems that convergences do occur and do need to be there.’

Based on other projects investigating the impacts of international war and famine events, Prof Ulubasoglu is in the process of writing and submitting a number of academic articles for publication.

As well as analysing the effects of the great famine in Vietnam – where two million people perished during the mid-1940s – he has been investigating the impact of World War 1 on children born in Turkey around the time of the Gallipoli battle.

‘We found that in later life, the children born during war were much weaker in terms of health, literacy and labour market status.  Whereas, the children who were unaffected by the war were more literate, worked in the services sector rather than the agricultural sector, and enjoyed much better health,’ he says.

 The study of the 1940s Vietnamese famine explores how malnutrition in young children affected their adult outcomes in health, literacy and employment – as well as its repercussions on the following generation.

‘We are looking at the intergeneration effects – analysing how the children of those child survivors have been impacted. Will the effect still be there? Will it be higher or lower? It could be lower because the effect may have phased off but it might be higher because the children born during the famine were weaker and may not have been able to care properly for their own children,’ he argues.

The Vietnamese famine research has included a way of measuring the severity of the famine – or the level of malnutrition – by examining rice production.

 ‘A higher per capita rice production means less likelihood of famine, lower per capita rice production means more likely to have famine.  The average rice production is about 300-400 kilograms per person, so for every 100 kilograms reduction in rice production, the famine effect increased by 1 per cent. So we have a direct measure of malnutrition and most studies don’t have this as they often only compared the affected and unaffected cohort,’ he explains.

Studies that measure impact and inform policy are the theme of other projects Prof Ulubasoglu has undertaken across Asia, including Bangladesh, Nepal, the Philippines and Sri Lanka.

‘We analyse how to incorporate natural disasters in the economic decision making at a more macro level such as government finance. We’ve conducted training sessions for Asian government employees so they too can analyse the impact of natural disasters on their own economy. What we’re doing in this region is combination of methodology, policy work and training.’

Meanwhile, he says that the BNHCRC – which is midway through its three year deadline – is advancing well in terms of plans, progress and deliverables.

‘A huge amount of data has been collected from government departments and this information will help policymakers make decisions. For example, if there’s a $100,000 in a budget, should it be spent on a fire truck or educating people about the prevention of bushfire?   These are decision-making – or policy – problems.  What governments and policymakers need, is the evidence to make these decisions appropriately. Our job is to provide the evidence.’