The Disaster Profiteers: How Natural Disasters Make the Rich Richer and the Poor Even Poorer (19 page)

The generals resisted what they genuinely believed was imminent invasion, and the international community should have realized that would be their reaction. Instead, the international community rebuked the generals, making a difficult situation even worse. Whether a different approach might have been more successful cannot be known, but it now seems to me that the reactions by the international community did nothing but exacerbate the tragedy.

The area damaged in the cyclone was of little importance to the country's economy, and, furthermore, the region supported armed opponents of the government. The generals may have felt that the region just didn't matter very much. Since the people who lived there included their enemies, why help them? We will see this logic emerge again in New Orleans after Hurricane Katrina.

As far as anyone can tell, Cyclone Nargis made no difference at all to the economy of Myanmar. Schumpeter's gale didn't bring creative destruction, at least for most of the delta residents.

If you have read anything unbiased about the history of Myanmar, you'd know that grabbing land has been the norm for many decades. In fact, the British colonization of Myanmar was more capture than colonization; it was a blatant land grab. What happened after
Cyclone Nargis was entirely to be expected. Once the winds stopped blowing, the rain stopped falling, the storm surge had retreated, and the sea level was back to normal, a rich opportunity for gain presented itself—and the generals finally became involved. To benefit from the land acquisition that followed, you just needed to be part of the military or closely connected to the military.

And this remains true today, despite the strong move in Myanmar toward democracy. The country is democratic enough that international sanctions have been lifted, and the country is on a strong trajectory toward democratization and growth. What has replaced the old land grab by armed force is a new form of quasi-legal land takeover—“legal land grabs,” as Kevin Woods at the University of California, Berkeley, has put it.
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The new government came to power in 2010 with new laws, some of which—the Farmland Law, for instance—sound as if they are meant to protect farmers. But, in fact, the laws allow land to be expropriated by the state if the property is needed “for the national interest.” And it requires no imagination at all to guess who it is who decides what is, or is not, in the national interest. In fact, it is very much the same people who made the decisions before the new form of government came into being.

What has emerged in Myanmar is a sort of elite alliance among military and business interests in a nominal democracy with laws that assist the elite and disengage almost everyone else. I heard on many occasions that nothing is different in terms of who really holds sway in the country; there still exists a deep suspicion of the military. Several people told me that the “democratization” came about because it was in the generals' interests to have it come about. They have lost nothing. In fact, they have gained by selling off state assets, such as land, to foreign businesses that now can operate in Myanmar—businesses to which the generals have very close ties.

After Cyclone Nargis, many in the Irrawaddy Delta fell victim to the Vacant, Fallow and Virgin Lands Management Act. The land that Cyclone Nargis's storm surge inundated could be plausibly declared vacant and fallow by courts working in conjunction with the military-business network that is blossoming in Myanmar and is hungry for land. The Myanmar lands management act operates something like eminent domain in the United States, which grants the government the right to take private land for public use (or for use by a third party in government or civic interest) if the original owners of the land are fairly compensated.
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Likewise, in Myanmar, people are supposed to be fairly compensated when the government takes land under the management act, but that is not what has happened. Furious complaints and protests claim that compensation, if it happens at all, is trivial and nowhere near the actual value of the land. Displaced farmers are forced to become landless laborers and work for a pittance on other people's farms.

Land is very valuable capital in Myanmar today, and the powerful have no issue with taking it from the weak.

Echoes of the same kind of malfeasance can be heard today in the Philippines following the devastation wrought by Typhoon Haiyan: “Build Back Better is nothing but a legal corporate land grab in the guise of a rehabilitation program.” That's the claim of the Philippine youth group Anakbayan in response to the business-led rehabilitation strategy of restoration following Haiyan, known locally as Yolanda. That strategy, under the program name Recovery Assistance for Yolanda (RAY), includes the allocation of state funds and internationally donated resources to establish public-private projects in twenty-four areas devastated by Yolanda that are now described as “development areas or clusters.” Nine of the country's largest corporations have claimed sixteen of these areas. Their plans are for tourism,
property development, mining, and so on. Their plans are not for the rehabilitation of the livelihoods of those trampled by the storm.

The president of the Philippines, Benigno Simeon Aquino III, claims that everything is going well in the recovery despite noisy “human wave” protests by survivors. He also caused distress and anger by suggesting that the casualty figure should really have been zero and would have been had local officials conducted evacuations properly. Yolanda was well predicted. It made close to a straight-line path into the islands and traveled at high speed across the islands. The speed at which it moved actually helped to limit the damage—if a storm moves slowly, the associated rainfall lasts longer and flooding becomes more likely.

The finger-pointing between the central government and regional and local governments reads so much like that between President George W. Bush, Governor Kathleen Blanco and Mayor Ray Nagin after Hurricane Katrina it is unsettling. Aquino's presidential rehabilitation assistant, Panfilo Lacson, has even described protesting survivors as lazy and leftists—in his view, apparently, the survivors are nuisances because they
should
have evacuated and didn't, making trouble for the government.

It is far too early to say how events will play out in the Philippines. Transparency International ranks the Philippines as a corrupt country—94th out of 177 countries in 2013—but not a completely corrupt country. That level of corruption, combined with the tight intertwining of business interests and government, appears destined to ensure that the beneficiaries of any land redistribution will be the wealthy elite, and the losers will be those already at the bottom of the economic pecking order.

Disasters present too much temptation to many in power. Like so much else in society, disasters are to be manipulated for social,
political, and/or financial gain. The type of government and stage of development don't appear to matter very much: they just provide different tools for different actors and different methods to achieve gain. And the type of disaster isn't very important either. Whether cyclone or earthquake, expected or unexpected, the aftermath presents the same temptations.

Despite the repressive nature of the Myanmar government and its many bizarre actions, the narrative of Cyclone Nargis is by no means an anomaly. The government's reaction to the storm, while marked by the junta's anxiety, is not unique and can be found in many parts of the world. As we have seen in Haiti and will see again and again, it is all too easy to declare the destruction wrought by a disaster as blight and the blighted areas as vulnerable, as places where people shouldn't be living. Governments and private actors (or the two in partnership) then have the chance to grab land for their own purposes. Nature has unwittingly helped the transfer of property from the poor to the rich.

Chapter 6

Struck Dumb in New Orleans

The disasters in Myanmar and Haiti are similar to those in New York and New Orleans in that each was worse than it should have been. This chapter discusses why they were so bad and who made them that way.

Unlike in Myanmar or Haiti, in New Orleans there
is
a middle class with many vibrant businesses, especially around tourism and entertainment, and some of the people who run them are quite prosperous. Tulane University, Loyola University, and the University of New Orleans are major employers, as are hospitals, the port facility, and the petrochemical industry. But a great majority of those who live in New Orleans are stuck fast in a poverty trap: unemployed, undereducated, and unhealthy, with little hope of progress and mobility. The majority of those who live in New Orleans were born there. For some, evacuation from the city in the face of a hurricane means going somewhere very unfamiliar.

New Orleans is the largest city in the second-poorest state in the United States. (Mississippi, the state immediately adjacent to the east,
ranks the poorest.)
1
Household income inequality in New Orleans is also the second highest in the country, behind Atlanta, Georgia.
2
The American Human Development Project calculated a Human Development Index (using a different formula from that used by the United Nations Development Program) that places Louisiana third from the bottom, with Mississippi again coming in last.
3

Poverty is deeply racial in Louisiana. Twenty-five percent of white families have incomes over $100,000, and only 7 percent have incomes less than $15,000. For African Americans, those figures are exactly reversed—only 7 percent have incomes over $100,000, and 25 percent have incomes below $15,000.
4

The geographic setting of New Orleans is not unlike that of Yangon in Myanmar. Both lie in the sweeping bend of a river—the Mississippi and Yangon Rivers respectively—that flows in complex meanders into fertile deltas immediately to their south. Both are major centers for shipping, and both export products from their country's interior.

Poverty reflects geography in New Orleans. It is quite literally invisible to the tourists on Bourbon Street who are so important to the city's economy, because it is confined to distinct regions where there are no tourist attractions, notably the Lower Ninth Ward and Gentilly. According to Alan Berube and Bruce Katz of the Brookings Institution:

These neighborhoods did not appear by accident. They emerged in part due to decades of policies that confined poor households, especially poor black ones, to these economically isolated areas. And despite New Orleans' reputation for fine food, these areas are food deserts as well, relying on small bodegas with limited selections. The federal government concentrated public housing in segregated
inner-city neighborhoods, subsidized metropolitan sprawl, and failed to create affordable housing for low-income families and minorities in rapidly developing suburbs, cutting them off from decent housing, educational, and economic opportunities.
5

The Lower Ninth Ward of New Orleans looks nothing like the Cité Soleil slum of Port-au-Prince, but functionally the two are essentially the same. They are both geographically restricted areas that concentrate the poorest people—who are also the most unhealthy and underserved—and are the most dangerous places in those cities. In Myanmar, the generals don't like to see evidence of poverty so they forcibly evicted millions of inner-city slum dwellers in Yangon and Mandalay to peripheral areas where they would not be seen by the tourists the generals hoped to attract. Motorcycles are also banned in central Yangon. If forcible slum clearing sounds horrifying, remember that the US Housing Act of 1949 permits the use of eminent domain to clear blighted areas and “revitalize” them. Most cities around the world have engaged in slum clearing at some point in their development, usually describing it as “urban renewal.”

The wealthy in New Orleans have their enclave too. They are mostly in and around the Garden District, essentially the equivalent of Pétionville in Haiti. Audubon Place, immediately across from the luxuriant Audubon Park, is a private gated community. Tulane's president has a home—a mansion—right on the corner. Audubon Place didn't flood at all. It's in one of the few parts of the city that sits nicely above sea level. So, like Port-au-Prince, the wealthy in New Orleans quite literally occupy the high ground.

This geographic arrangement is far from happenstance. The Mississippi River floods regularly. The floods are the source of fertile soil that made the delta such an ideal place for cotton farming (and the Irrawaddy Delta a fine place for rice growing). Anyone living in
the Mississippi Delta before the levee system was constructed (and even after) would have experienced numerous flooding events, and it would not take long to learn which locations remained above the floodwaters. If you are wealthy, that's where you move. Property values quickly rise in those places as they become known for their natural desirability. In very little time, they become enclaves of the rich. But if you are not rich, you stay right where you are, as marginal people in marginal lands.

It would be a significant exaggeration to equate New Orleans with Haiti, but numerous times in print, on television, and in conversations I have had with people in New Orleans, the response to Hurricane Katrina was said to “make us look like a third-world country.”
6
Just what people meant by that statement was never quite clear. It was always said with the same sort of embarrassment that came over the government officials I met with in Taiwan. The level of death and destruction was more like what we are used to hearing about in a developing country, such as Haiti or Bangladesh, not a rich country.

So, despite being located in the world's leading economy, New Orleans and the Katrina disaster exhibit many characteristics that echo those of two of the very poorest places on Earth.

At the time Katrina struck, corruption was endemic in all levels of government in New Orleans. Louisiana ranked third in the United States in the number of corruption-related convictions relative to total population (following Alaska and Mississippi) in 2005.
7
Two of the most prominent government officials at the time of Hurricane Katrina have since been charged with corruption. In 2014 Mayor Ray Nagin was convicted and sentenced to ten years in prison on 20 counts of various corrupt activities: one overarching conspiracy count, five counts of bribery (he was charged with six), nine counts of wire fraud, one count of money-laundering conspiracy, and four
counts of filing false tax returns.
8
Aaron Broussard, the chief executive of Jefferson Parish, which includes a large section of suburban New Orleans, has also pleaded guilty to political corruption charges.

The corrupt activities that Nagin was convicted of were not all directly associated with Katrina. Many were “normal.” Nagin has insisted he did nothing wrong, and he may even believe it. The activities were just the way a mayor goes about business in New Orleans. The storm, however, offered a special opportunity for Nagin's corrupt dealings.

Corruption differs little in Haiti, Myanmar, and New Orleans, different though those settings are. Those in power in government, whether through election or by seizure, surround themselves with powerful supporters whom they reward with lucrative contracts or favors to conduct business. In return, they get loyalty, kickbacks, and no scrutiny of their own wealth-generating activities. None of those in power show much care for their people except in times of elections (if they have them), when they must pretend to do so.

Despite the vast
and obvious differences between Myanmar and the United States, it is very hard to read accounts of the official government reaction to Cyclone Nargis in Myanmar and not recall the reaction of the Bush administration to news of Hurricane Katrina in the Louisiana Gulf Coast. Both President George W. Bush and Vice President Dick Cheney were on vacation at the time, and neither thought the situation serious enough to interrupt their leisure time. Days passed before Bush and Cheney returned to Washington. The timing is uncannily similar to the time it took for the Myanmar leaders to take action on Nargis.

We can only speculate about just what Bush understood about the scale of the destruction and the relief operations under way in New Orleans. It is utterly unclear whether Bush, from his vacation home in Crawford, Texas, or from the Oval Office in the White
House, knew more or less about the tragedy unfolding in the Mississippi Delta than Than Shwe, the top general of the armed forces of Myanmar, knew from his office in Naypyidaw about the suffering in the Irrawaddy Delta. Both were informed, but both acted—in very different ways—as if they really didn't know, didn't believe, didn't want to believe, or didn't care. Or couldn't comprehend.

And it wasn't just President Bush who seemed to think Hurricane Katrina wasn't worth worrying about so much. Secretary of Defense Donald Rumsfeld attended a San Diego Padres baseball game the day Katrina made landfall. Two days after, when the massive tragedy unfolding in New Orleans was undeniable and Bush's vacation had ended, Secretary of State Condoleezza Rice went to see a Broadway play, where she was booed by the audience. Undeterred, the next day she attended the US Open and went shoe shopping on Fifth Avenue in New York. Michael Chertoff, the head of Homeland Security, which had absorbed the Federal Emergency Management Agency (FEMA), seemed not to pay much attention for days, claiming afterward to have been unaware of the gravity of the situation. And every statement out of the Bush administration claimed that the relief efforts were going well, just as the generals would claim in Myanmar.

When Than Shwe and George Bush finally began to accept the scope of the disasters in the southern delta reaches of their countries, each acted defensively, concerned more about mitigating political and reputational damage than about the vast damage to life and property. Each had the immediate impulse to assert that everything was under control. Each was eventually persuaded by the media and/or his own staff that he needed to show interest and visit the scene. Bush first flew over the scene in Air Force One on the way back to Washington from his vacation. Although the plane was flying low and relatively slowly, the pass over New Orleans couldn't have taken much time.
Photographs show him staring out the window from his private cabin with a puzzled look on his face. News media were invited into the president's quarters on the plane in the hope that photos would capture the commander in chief looking vexed, concerned but in charge, giving orders. Instead, he looked hopelessly distant from the tragedy below. It earned him the title of the Flyover President
9
from those who felt he was detached from most aspects of life in the United States.

Bush may truly have been unaware of the full scope of the tragedy in New Orleans. After all, the day after the hurricane passed, the central part of the city looked damaged but not devastated, and Mayor Nagin said the city had dodged a bullet. The Lower Ninth had already flooded; he just didn't know it.

Once they finally arrived at the disaster scene, each leader, looking appropriately concerned but now in charge, praised their disaster management agency leaders for their excellent and timely work. President Bush achieved almost instant derision for his infamous statement that Michael Brown, whom he had personally chosen to head FEMA, was doing a “heckofajob [
sic
].”
10
These words came despite being briefed earlier by Brown and others that New Orleans was 90 percent underwater and that “nothing was working”—according to Brown in a later interview on his 2011 book,
Deadly Indifference: The Perfect (Political) Storm: Hurricane Katrina, The Bush White House, and Beyond.
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Unsurprisingly, in his book Brown attempts rather shamelessly to shift the blame from himself to those above him, especially President Bush. Brown sees himself as the person in the administration who had to take the blame for the botched Katrina response. In US politics, someone always takes the fall when something goes badly wrong, whether they carry any direct blame or not. There were calls for Brown's resignation for days before he was dismissed, and when
things go wrong in US responses to natural disasters, FEMA's head is always blamed.

It is particularly important to recognize just how bad Katrina really was. It was not bad just because the response was dreadful. The finger pointing was not about something trivial or a political squabble; it was about the responsibility for massive death and destruction.

Hurricane Katrina was off the scale in so many ways. While death tolls are surprisingly hard to measure accurately and, as we discussed earlier, don't have very much to do with the long-run social and economic consequences of disasters, one thing we do know with great certainty is that the Katrina mortality figure, whatever it actually is, is appallingly large. The “official” figure is 1,833; the true figure may be as high as twice that.
12

Until Katrina, even the most massive storms and hurricanes in the United States had not killed many people. Hurricane Andrew made landfall in Dade County, Florida, at category 5 on August 24, 1992. It is notorious in US hurricane history, not because of the number of fatalities it caused but because it resulted in 11 insurance companies being forced out of business by the thousands of claims made by survivors. The death toll was 65. Superstorm Sandy killed 117 people in the United States, the majority of them in New York. Outside the United States, Haiti was hardest hit with 53 deaths.
13
These figures are not trivial, but compared to Katrina, they
are
quite small.