By Rajindra Rohitha

Disasters cost lives, destroy communities, disrupt livelihoods and leave lasting impacts not only on physical infrastructure but also on the psychosocial well-being of affected populations. While disaster-related mortality has declined globally over the past decade, the number of people affected has increased, and economic losses have become increasingly severe. From a development perspective, disasters impose devastating costs at the household, community and national levels as a trend that continues to intensify.
People are exposed to hazards primarily because of underlying social, economic and environmental vulnerabilities. Poor countries suffer disproportionately higher losses and within them, poor communities bear the greatest burden. The root causes of disaster vulnerability lie in inequality, discrimination and exploitation, compounded by weak institutions, limited enforcement capacity and poor development planning. These systemic weaknesses significantly amplify disaster impacts on vulnerable populations.

Note 1: Disaster Risk Reduction (DRR) and Livelihoods – Conceptual Framework
The conceptual framework applied in this analysis is derived from the widely accepted relationship between risk, hazard, vulnerability and capacity:

Risk = (Hazard × Exposure × Vulnerability) / Capacity
This formulation clearly indicates that enhancing capacity is central to reducing disaster risk. The critical question, therefore, is which capacities should be strengthened to effectively reduce vulnerability. For this analysis, the five capitals of the DFID Sustainable Livelihood Framework are adopted as core capacities with an additional focus on governance capacity often referred to as political capital.
Policy and market failures, which are largely beyond the direct control of communities play a significant role in shaping vulnerability. These failures are treated here as major drivers of disaster risk and livelihood insecurity.

(Figure 1: DRR, Livelihoods and Resilience Conceptual Framework)

1. Community Capacity and Vulnerability
Risks and vulnerabilities to disasters are closely associated with limited community capacities and the absence of effective government policies or weak enforcement of existing policies. Capacity as defined by UNISDR refers to the combination of strengths, resources and attributes available within a community, society or organization to achieve agreed goals. This includes physical infrastructure, institutional arrangements, social cohesion, human skills, leadership and governance systems.
Capacity may include infrastructure and physical means, institutions, societal coping abilities as well as human knowledge, skills and collective attributes such as social relationships, leadership and management. Capacity also may be described as capability (in DIFID Sustainable Livelihood Framework it is analyzed as Capitals ). For a better explanation the capacity of the community is analyzed in six categories in this paper. Those are;
For analytical clarity, community capacity is examined under six interrelated dimensions:
1. Social Capacity
2. Physical Capacity
3. Financial Capacity
4. Human Capacity
5. Natural Resource Capacity
6. Governance Capacity
1.1. Social Capacity
Social capacity refers to the social resources that communities draw upon to achieve disaster risk reduction objectives. These include networks and connections both vertical (between communities and institutions) and horizontal (among individuals and groups) that foster trust, cooperation and access to external support systems. Membership in formal and informal organizations shared norms and reciprocal relationships further strengthen collective action and social protection mechanisms.
The absence of social capacity significantly increases vulnerability to disasters. Strong civil society organizations enhance community empowerment by enabling participation in policy processes and ensuring that community needs are reflected in legislation and development planning. Community-based health services and social support systems also form an essential part of social capacity particularly during epidemics and large-scale emergencies.
1.2. Physical Capacity
Physical capacity comprises infrastructure and physical measures that reduce disaster risk and vulnerability. These include shelters, roads, buildings, evacuation centres, irrigation schemes, riverbank stabilization works, bioengineering measures and health and education facilities. Such infrastructure not only mitigates disaster risks but also supports livelihoods and economic resilience.
Weak or absent physical capacity significantly increases vulnerability. Physical capacity development should therefore be a core component of resilience-building programmes. Community engagement in infrastructure development, combined with government resource mobilization, enhances ownership, accountability and democratic governance. Climate-resilient infrastructure, particularly that linked to livelihoods, must be prioritized.
1.3. Human Capacity
Human capacity encompasses knowledge, skills, labour availability and health status that enable communities to manage disaster risks and pursue resilience strategies. At the household level, human capacity varies according to education, leadership potential, health and access to information.
Strengthening human capacity is fundamental to reducing vulnerability. Community-based resilience programmes should therefore prioritize skills development, including disaster preparedness, first aid, search and rescue, fire control and public health awareness. Livelihood skills, diversification strategies and climate change adaptation knowledge further reduce economic and climate-related vulnerabilities.
1.4. Financial Capacity
Financial capacity refers to the financial resources available to households and communities to manage risk. Community emergency funds, household savings, livestock assets and grain stocks all contribute to financial resilience. These resources can be mobilized during crises to reduce losses and speed recovery.
Resilience programmes should integrate livelihood strengthening, savings mechanisms and efficient use of indigenous resources to enhance financial capacity. Improved financial resilience directly contributes to disaster and climate resilience.
1.5. Natural Resource Capacity
Natural resource capacity includes the stock of natural assets that support livelihoods and ecosystem services such as land, forests, water resources and biodiversity. Disasters frequently degrade these assets through floods, landslides, droughts and fires, thereby increasing vulnerability.
Effective natural resource management is, therefore, a critical component of resilience. Community based natural resource management enhances ecosystem services, strengthens livelihoods and improves community access to and control over resources, which are key elements of democratic governance and long term resilience.
1.6. Governance Capacity
Governance capacity refers to the ability of communities to influence policies, access resources and ensure inclusive participation in disaster risk management processes. Effective governance requires the inclusion of women, persons with disabilities, older persons, minorities and children.
Information flow is a central element of governance capacity. Strong, two way communication between communities and government systems is essential for early warning, preparedness, response and recovery. Effective early warning systems demonstrate how improved information flow can significantly reduce disaster risks.
2. Policy and Market Failures
Vulnerability is often viewed as an intrinsic characteristic of a system or element . It is often shaped by policy gaps and weak institutional frameworks. Inadequate or poorly implemented policies leave vulnerable communities excluded from development planning and resource allocation, thereby amplifying disaster impacts. The 2004 Indian Ocean Tsunami in Sri Lanka illustrated the severe consequences of such systemic failures.
Policy failures frequently lead to market failures, particularly during disasters. Essential services such as search and rescue, health care, food supply and emergency shelter may not be delivered efficiently, further increasing human and economic losses.

Note 2: Without Policy & Systems and With Policy & System-Sri Lanka Tsunami Experience

26th December 2004, when a 9.2 magnitude earthquake happened in the Sumatra seas, there was no system in Sri Lanka to receive the Tsunami warning from Hawaii Tsunami Warning Centre. The impact was extremely devastating. Immediately after the disaster, the government has regularized the Tsunami warning system. On 28th March 2005, another earthquake of 8.7 magnitudes happened in the Sumatra seas and the Hawaii Tsunami Warning Centre issued a Tsunami warning. Within 45 Minutes, the government’s tsunami warning system was activated and people from risk areas were evacuated at midnight. (3 hours later Tsunami warning was lifted).

Absence of or a weak policy system often leads to market failures, triggering adverse impact on disaster preparedness and DRR efforts. Market failure is a concept within economic theory describing when the allocation of goods and services by a free market is not an efficient Market . In a disaster situation, search and rescue, first aid, health services, food supply, and non-food item supply for the disaster victims can also be considered services. Failure to supply these efficiently can also be considered as market failures, which are direct results of policy failures.

Note 3: When Policy and Market Failures Turn a Hazard into a Disaster-Cyclone Ditwah-Nov-2025
When Cyclone Ditwah struck Sri Lanka in late November 2025 peaking around 28 November, it was immediately clear to me that this was not just another extreme weather event. What unfolded was a humanitarian crisis shaped as much by system failure as by the cyclone itself. By mid-December, an estimated 1.2 million people required humanitarian assistance with 658,000 identified for targeted support. The cyclone claimed 627 lives, left 190 people missing, displaced around 233,000 people at its peak and damaged more than 100,000 houses, either partially or fully. Even weeks later, nearly 90,000 people were still living in 956 temporary evacuation shelters, struggling to restore livelihoods and basic services .
But numbers alone do not explain why the impact was so severe.
From what I observed and from multiple field-level accounts, early warnings did not reach many of the most vulnerable communities on time. When the cyclone made landfall, widespread power failures triggered a near-total collapse of telecommunication networks. Entire areas were cut off for days. People could not call for help, local officials could not relay information and emergency responses were delayed simply because communication had failed.
This communication blackout was not an accident. It was the predictable outcome of a disaster management system that never treated communication resilience as essential infrastructure. Backup power for telecom towers, redundancy in emergency communication and clear protocols for crisis connectivity were either missing or inadequate. As a result, lives were lost not only because of the cyclone but because distress signals could not travel from affected communities to responders.

Note 4: Policy and Market Failures – Pakistan Earthquake (2013)
A magnitude 7.8 earthquake struck Baluchistan Province in Pakistan on 24 September 2013 causing at least 348 deaths and affecting more than 300,000 people. Rescue operations were severely constrained by the absence of trained responders in the affected areas while requiring personnel to be deployed from distances exceeding 500 km. Relief delivery was further impeded by conflict related access constraints.
Despite Pakistan having a well established disaster management policy framework, implementation gaps particularly in high-risk seismic zones were evident. Media reports highlighted the lack of preparedness highlighting how policy and market failures jointly exacerbate disaster impacts.

Policy and market failures have profound implications for livelihoods and climate resilience. Disruptions to input supply chains, destruction of productive assets and absence of effective insurance mechanisms such as crop and livestock insurance further escalate vulnerability. Addressing both policy and market failures is therefore essential for building sustainable, inclusive and resilient communities.

End Note: The disaster events discussed in this article are drawn from the author’s own firsthand experience