It gets worse: Australia prepares for a powerful cyclone after record flooding

A business is closed in preparation for Cyclone Yasi.

TEXT OF STORY

STEVE CHIOTAKIS: In Australia, leaders are issuing big warnings for a massive cyclone that's about to hit Queensland State in the north. If that sounds familiar to you, it's because that region was under water just days ago after torrential rains there. The economic damage could be catastrophic.

Brian Redican is chief economist at McQuarie Bank in Sydney, He's with us on the line. Good morning Brian.

BRIAN REDICAN: Goood day how are you?

CHIOTAKIS: I'm doing well. How are companies there and the government of Australia preparing for this storm?

REDICAN: In the last three or four days, businesses have been very busily evacuating their stores, sand bagging them, putting boards over windows and masking tape to try to limit the damage that the storm has done. And indeed some towns have been completely evacuated because along side the terrific winds of the hurricane will be extreme flooding as well.

CHIOTAKIS: Yeah, the country's been hammered by historic flooding. In light of that, Brian, what kind of resources does Australia have available?

REDICAN: This region is used to cyclones, so there are the available resources in the right area. I found it's just the intensity of this story that has got people alarmed. It probably will be the most intense storm in this region for around about 90 years, and it compares to Hurricane Katrina of course which devastated New Orleans.

CHIOTAKIS: And I remember Katrina and I remember at that time insurance companies had a very difficult time because of the immense damage there, paying out these claims. Do you think insurance companies are going to have trouble in Australia?

REDICAN: Certainly they've been hit by the floods that you mentioned other the last month or so. And this will just be another blow to those businesses. Also a lot of the small businesses -- the tourism related businesses -- have been doing to quite tough because the Australia dollar has been expensive. And again, this is just going to provide another body blow for those businesses that had been struggling. And of course this region is also a major agricultural producer for Australia. So about 90 percent of Australia's banana crop is based in this region. With this cyclone there's a very strong likelihood that the entire banana crop will be wiped out.

CHIOTAKIS: All right, Brian Redican, chief economist at McQuarie Bank in Sydney. Thank you.

REDICAN: OK then. Thank you, bye.

About the author

Steve Chiotakis was the host of Marketplace Morning Report until January 2012.

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