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Case Code: DISM004
Case Length: 18 Pages 
Period: 2010   
Pub Date: 2017
Teaching Note: Available
Price:Rs.500
Organization :
Industry :-
Countries : Chile 
Themes: Disaster Management  
/Disaster Preparedness
Case Studies  
Business Strategy
Marketing
Finance
Human Resource Management
IT and Systems
Operations
Economics
Leadership & Entrepreneurship

Chile's Earthquake: Pro-active Disaster Management helps in Quick Recovery

 
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EXCERPTS

DISASTER PREPAREDNESS

 

Though Chile was prone to natural disasters, the government of Chile was ill-prepared to handle the disasters until 1928. The 1928 Talca earthquake led to the destruction of 95 percent of the buildings in the country. Much of the destruction was caused by collapsing buildings, which claimed hundreds of lives while causing huge economic damage. As a result, the government of Chile in 1929 passed a law for creating a body for developing seismic codes for buildings. The codes did not prevent buildings from suffering damage from earthquakes; rather, in a bid to reduce physical damage, they were designed to thwart the collapse of buildings...

 
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THE GREAT CHILEAN EARTHQUAKE OF 1960

On May 21, 1960, around 6 am (local time), the earth began to shake violently under the coastal town of Concepcion. It was reported that Chile had been hit by an earthquake with a magnitude of 8.3. Around 125 people died and a third of the buildings in Concepcion were destroyed. Communication lines to southern Chile were also cut. Chile’s then president, Jorge Allessandri, started to coordinate emergency response to this severe earthquake. This was followed by an aftershock on May 22, 1960, when another earthquake struck Concepcion with a magnitude of 7.9. But the worst was yet to come. .
 

THE DISASTER OF 2010

On February 27, 2010, an earthquake with an 8.8 magnitude hit the Maule region in Chile – the sixth greatest earthquake ever recorded on earth (Refer to Exhibit II for the world’s ten most intense earthquakes since 1950). According to seismologists, the F27 was so massive that it actually moved the city of Concepcion in Chile to the west and resulted in the Earth’s axis tilting by 3 inches...
 

THE AFTERMATH

Though Chile had strict seismic codes for buildings, the F27 devastated schools, roads, ports, bridges, houses, hospitals, and businesses, paralyzing the nation for weeks. The economic damage was massive with losses of US$ 30 billion – equivalent to 18 percent of the country’s GDP, and nearly one-fifth of what Chile produced in a year...
 

THE AFTERMATH

Though the state governments of Odisha and Andhra Pradesh were prepared to deal with a cyclonic storm of such magnitude, the havoc caused by Phailin was huge and widespread. Television footage showed uprooted trees, debris, and electrical poles lying on the streets.
 

RESCUE AND RELIEF EFFORTS

After the earthquake and the tsunami, the Chilean government embarked on the gigantic task of carrying out rescue and relief operations in the affected regions. The government purchased the entire stock in supermarkets and then arranged for the army to ensure that the affected communities received the essentials. The government dispatched search and rescue teams and offered basic services such as food, blankets, and medical equipment in the affected regions...
 

RESTORATION EFFORTS

After Pinera took over as the new President, he identified restoration as Chile’s primary challenge. According to Pinera, “We made a commitment to restore the country; we are committed 100 percent to replace within four years what was destroyed...
 

FINANCING THE POST DISASTER RECOVERY PROCESS

Pinera and Felipe Larrain (Larrain), the new finance minister of Chile, devised a financial strategy for reconstruction. According to estimates by Larrain, the total costs to improve and restore infrastructure, cover production losses, reverse private sector damage, and emergency expenditures was close to US$ 30 billion...
 

THE RESPONSE – AN ASSESMENT

Appreciating Chile’s response to the F27, Mark Ghilarducci, a 25-year disaster veteran who had helped run California’s emergency management office during the 1989 Loma Prieta earthquake, said, “In this case you did see an effective and well-executed response. I’ve seen other governments take far longer, with far less coordination and communication. It’s pretty phenomenal to have such a low number of deaths in such a large earthquake that was relatively such a direct hit...
 

LOOKING AHEAD

Some disaster experts stated that Chile had done well in responding to the earthquake. However, there were areas that needed improvement such as enhancing its emergency preparedness protocols and early warning systems since the delay in issuing a tsunami alert had led to the tragic loss of lives in the country, they said...
 

EXHIBITS

Exhibit I:Ring of Fire bordering the Peru-Chile Trench
Exhibit II: Ten Most Intense Earthquakes in the World since 1950
Exhibit III: International Aid for Rescue, Relief, and Restoration in Chile
Exhibit IV: Donor Contributions in Response to Chile Earthquake.
Exhibit V: A Brief Note on Restoration by Volunteers and NGOs.
Exhibit VI: Estimated Economic Costs of F27 (in US$ million).
Exhibit VII: Public Sources of Financing and Reconstruction Spending (2010-2013)