BizLIVE -

Vietnam is the seventh most disaster-prone country in the world, with more than 13,000 deaths and $6.4 billion in property losses over the last two decades. 

Vietnam Severely Affected by Extreme Weather Events, WB Says
This report’s purpose is to help Vietnam policymakers and stakeholders prepare for future El Niño Southern Oscillation (ENSO) events. It does this by providing information on ENSO’s agricultural, economic, and poverty impacts in Vietnam and outlining ways forward. 
Vietnam is highly exposed to ENSO-related climate shocks. ENSO describes naturally occurring ocean and atmospheric temperature fluctuations that can have major implications on global weather patterns. Historical data show that the two phases of ENSO, El Niño and La Niña, tend to depress and increase rainfall, respectively. 
Also, while both phases decrease rainfall in the north, only El Niño depresses rainfall in the center and south of Vietnam, with La Niña increasing rainfall in both. The South also faces the ENSO-related challenge of saltwater intrusion. In fact, the country’s most vulnerable regions to ENSO are the South Central Coast, Central Highlands, and Mekong River Delta. Complicating matters is Vietnam’s high risk of natural hazards, including floods, drought, and cyclones.  
By some measures, Vietnam is the seventh most disaster-prone country in the world, with more than 13,000 deaths and $6.4 billion in property losses over the last two decades.  In the case of El Niño, drought and saltwater intrusion during the 2014-2016 event caused an estimated $3.6 billion in damages to agriculture, fisheries, and aquaculture alone. 
ENSO’s impacts on agriculture have economy wide implications. Agriculture is an important economic sector in Vietnam, providing over a fifth of GDP and two-fifths of employment. However, when accounting for downstream processing and spillover across sectors, the entire agriculture-food system (AFS) provides over a quarter of GDP and over half of employment. 
As such, any shocks to agriculture lead to reverberations across the entire economy, with serious implications on welfare, food security, and national poverty levels. Figure I shows how rainfall during ENSO varies in north, central, and south Vietnam and which or those regions are the most important for agriculture. 
There is evidence that ENSO contributes to declines in Vietnamese fisheries and livestock. By the end of the last El Niño in March 2016, domestic fish production was about 38,000 tons, or a 2.6 percent decline from the previous year.  Simulations run for this report also estimate that El Niño reduces fishery production by 2.6 percent. 
This includes both capture fisheries and aquaculture. There is no evidence that La Niña contributes to fishery production losses. ENSO’s links with livestock declines are less well-established. However, La Niña causes hotter days, which can cause increased heat stress for livestock and related cost increases for producers.
Strong El Niño events lead to GDP losses, while strong La Niña events lead to smaller GDP gains. Simulations for this report show that national GDP losses during a strong El Niño event are $2.5 billion compared to a $1.1 billion gain during La Niña. Percentage losses are larger in agriculture, where GDP falls by nearly 10 percent. Even small percentage reductions in national GDP can imply substantial monetary losses. 
For example, a 1.5 percent drop in national GDP is equal to $2.5 billion in lost value-added. Overall, simulations estimate about a quarter of the AFS’ economic damages during strong El Niño events occur outside of agriculture. 
Simulations for individual sectors show that La Niña gains in each sector, in percentages and dollar-value amounts, do not match El Niño losses in those same sectors. Since Vietnam is a major rice exporter, international rice markets can also be adversely affected, especially when combined with policy actions that restrict exports.

DIEP NGUYEN