Find the latest episode of "The Uncertain Hour" here. Listen

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

Steve Chiotakis Feb 2, 2011
HTML EMBED:
COPY

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

Steve Chiotakis Feb 2, 2011
HTML EMBED:
COPY

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.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.