3.3. Economic Shocks

On the other hand, we have external one which we cannot less control, is an exogenous variable. What are they? External variables is considered in this double structure of vulnerability as exposure. So, exposure to what, some shock or some events like it depends on what kind of shocks, is it natural phenomena or some epidemics or not merely a kind of special exposure but how defenseless like I am for that one.

Economic shocks are external factors that we cannot control; they are classified as exogenous variables. These shocks can stem from various sources, such as natural disasters or health epidemics. Understanding the nature of these shocks is crucial, as they define the extent of our exposure to risk and our vulnerability to these unforeseen events.

Consider a small farming community. If a drought occurs (a natural shock), the farmers cannot control this event. Their vulnerability increases because they rely heavily on rain for their crops. The more defenseless they feel against such shocks, the more significant the potential economic impact on their livelihoods.

So, double structure of vulnerability, two components; one is the exposure one and this exposure one according to Bohle that we can understand this exposure context from 3 different dimensions. One is human ecological perspective, population dynamics, capacity to manage the environment, population growth, and how human ecology is looking at population growth and the capacity to manage the environment.

Bohle's model identifies two main components of vulnerability: exposure and the context of that exposure. The context can be analyzed through three dimensions: the human ecological perspective, which considers how population growth and the ability to manage environmental resources contribute to an individual's exposure to economic shocks.

Think of a large city experiencing rapid population growth. If there aren't adequate resources or infrastructure to support this growth (like housing and sanitation), the city becomes more vulnerable to economic shocks, such as a recession or a health crisis. The lack of management capacity exacerbates the exposure to these risks.

Well to understand people's coping, we can also borrow the ideas from crisis and conflict kind of studies, who have the access to assets and resources and how it matter of conflict between individuals and groups or maybe sometimes action theory approaches, how people act, react frequently as a result of social-economic and governmental constraints and model access to assets like a mitigation of vulnerability through access.

To comprehend how individuals cope with economic shocks, we can analyze various social theories. These studies look at how individuals and groups access resources and assets, and how conflicts can arise due to disparities in access. Understanding these coping mechanisms helps us see how vulnerabilities can be mitigated.

Imagine two neighboring communities—one is affluent with many resources, while the other is struggling with poverty. During an economic downturn, the rich community can better cope due to available assets, such as savings and connections. Meanwhile, the poorer community may face increased hardship, highlighting how access to resources influences vulnerability and coping capacity.

There is another more prominent and very popular conceptual idea of vulnerability is the sustainable livelihood framework. It is not really on vulnerability, but they are one of the pioneering approach that define and quoted the vulnerability and which was now very regularly used in disaster risk and other risk management. So, this idea came originally developed by famous person Robert Chambers and Conway in 1992, quite long back.

The Sustainable Livelihood Framework (SLF) is a significant concept in understanding vulnerability. Developed by Chambers and Conway, this framework emphasizes the importance of people's livelihoods rather than solely focusing on vulnerability. It promotes viewing individuals as the center of development and highlights how vulnerabilities can be mitigated through sustainable livelihoods.

Consider a community relying on fishing for their livelihoods. If they implement sustainable practices, like avoiding overfishing and maintaining their habitat, they can keep their livelihoods intact, even in the face of environmental changes. This stands in contrast to communities that do not prioritize sustainability and face greater risk of losing their livelihoods due to economic shocks.

So, vulnerability context is defined with 3 characteristics that people are at vulnerable because shock, trends, and seasonality. So what are the shocks? One is the natural shocks like flood, drought, and cyclone. And health shocks like epidemic like cholera or even dengue let us say, or economic shocks like some financial recessions or maybe death in the family for a household or maybe violence like civil war in case of Syria or in many other countries in case of Sri Lanka when they were in civil war or in case of Bosnia.

The context of vulnerability encompasses three main elements: shocks, trends, and seasonality. Shocks can be natural (like floods), health-related (like epidemics), or economic (like financial recessions). Each of these factors contributes to the overall vulnerability of individuals and communities, making it essential to understand what they are facing.

For example, a farmer may face multiple challenges during the year. If a flood damages crops (a natural shock), it could lead to economic difficulties. If there's also a rise in food prices due to inflation (an economic shock), the farmer's ability to recover is jeopardized further, illustrating how various shocks impact vulnerability.

Now, this vulnerability context actually, this is the poor people and is affecting their household capacity or their own individual capacity. So, they have actually different kind of capitals or capacities. One is a human capital, social capital, financial capital and physical capital.

Individuals and communities hold various types of capitals: human (skills and education), social (networks and relationships), financial (assets and resources), and physical (infrastructure). These capitals impact their vulnerability and capacity to cope with economic shocks, indicating that the more assets or capitals one has, the better they can handle adversity.

Think of a student preparing for exams. If the student has good 'human capital' (knowledge and study habits), strong 'social capital' (supportive friends and teachers), and 'financial capital' (resources for tutoring), their chances of success are much better compared to a student lacking these capitals.

And human capital; knowledge and skill like education or good health I am capable person, nutrition I am getting enough food, nutritious food, ability to labor I can work, I can give my labor, capacity to adapt, in any situation, I can adapt culturally.

Human capital encompasses education, skills, health, and the ability to labor. It reflects a person's potential to contribute productively to their community and adapt to changes in their environment. A strong human capital base enhances the individual’s resilience against economic shocks.

Consider a skilled mechanic who can fix various vehicles. If an economic downturn occurs, their extensive knowledge and adaptability may allow them to find work in different areas related to their skills, thus minimizing their economic vulnerability.

And social capital, of course my network, network works very well, my human networks, connections with each other or membership in a group, formal and informal. Like I can go to some club or maybe in a puja or in so any kind of formal and informal relationship defines my social capital. If I am outcasted, I am not included in any particular group then I feel that I am isolated; I have less capacity to absorb the shocks or absorb the threat.

Social capital involves the networks and relationships individuals have, which can provide support and resources during crises. A strong network can enhance resilience and improve access to opportunities. Conversely, social isolation increases vulnerability because it limits access to necessary assistance and resources.

Imagine a community facing a disaster. Those with rich social networks—friends, community groups, and active participation in local organizations—are often better off as they have access to greater support, resources, and information about recovery options than those who are isolated.

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