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Economy

Asia bracing for return of devastating El Nino

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Heavy rains triggered flooding in Indonesia in January.   © Reuters

TOKYO -- Researchers are raising the alarm that this year's climate conditions are eerily similar to those seen in 1997, when the worst El Nino phenomenon on record caused extreme drought and floods.

     Surface ocean data sent from the Jason-2 satellite on May 6 is quite similar to that recorded in the spring of 1997, according to climatologist Bill Patzert at NASA, referring to the year when the biggest-ever El Nino hit many parts of the world. This is a sign that an extreme El Nino is brewing, he contends.

Chances of El Nino this summer at 70%

One factor triggering concern is that surface ocean temperatures in a vast area stretching some 8,000km westward off the coast of Peru are higher than usual. The U.S. Climate Prediction Center on June 5 put the chances of an El Nino developing this summer at 70%, raising the odds by 5 percentage points. This followed a June 3 announcement from Australia's Bureau of Meteorology that there is an at least 70% chance that El Nino is coming.

     The worry stems from El Nino's potential to cause intense drought and flooding. In addition to such disasters, agriculture and food production will be hit hard, so much so that economies could be chilled. In 1997-98, unusual events such as drought wreaked havoc in Southeast Asia and Oceania, with steep drops in precipitation damaging farm production. Grain production in Australia and the Philippines sank by double digits to unprecedentedly low levels.

     If an El Nino phenomenon occurs this year and it turns out to be one of the severest ever, "this could push down economic growth in India by 0.5 percentage point and that in the Philippines by nearly 1 point," predicts Hiroshi Inagaki, chief researcher in the Mizuho Research Institute's Asia department.

     Farm produce will be hit particularly hard. Reports from Japan's National Institute for Agro-Environmental Sciences and the Japan Agency for Marine-Earth Science and Technology show that the corn harvest in a year when an El Nino strikes is 2.3% lower than the average for the previous five years. The decline is 1.4% for wheat.

     Supposing that these numbers are caused by an average El Nino, this year's impact from what is expected to be a severe El Nino would be far worse. In 1997, Australia's added-value output from the agriculture, forestry and fishery industries tumbled 5.9% from the previous year.

     Aware of this risk, Pacific Rim countries are stepping up measures against potential disaster. For example, Indonesia has budgeted $173 million for rice reserves and drought-fighting measures, according to local reports.

     Malaysia has set up a special cross-agency task force with the objective of tightening its grip on water supply management during a dry phase of the monsoon season. The task force has instructed local governments to check the water levels of reservoirs and dams to ensure palatable water supplies for farming, while encouraging industry to recycle water.

El Nino's economic, political effects

An El Nino is even feared to hurt the relationship between India's new pro-growth prime minister, Narendra Modi, and Gov. Raghuram Rajan of the Reserve Bank of India, who focuses on controlling inflation. In the country, precipitation during the monsoon season from June to September determines the harvest for that year. If an El Nino reduces rainfall, this would decrease the harvest, putting upward pressure on fresh-produce prices. If the government fails to take adequate measures, the central bank would have to raise interest rates to rein in inflationary pressure.

     Over in South America, Brazil faces a drought risk. Because hydroelectricity accounts for 80% of all power in the country, water scarcity equates to power shortages. If power shortfalls hurt the already-feeble economy, President Dilma Rousseff would face a tough re-election bid in the fall.

 

 

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