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  • Damage and Losses Evaluation in Cases of DisastersAn Introduction to the ECLAC methodologyJ. Roberto Jovel, Consultant

    Roberto Jovel

  • Why undertake a Damage and Loss Assessment?Any disaster brings about both destruction and damage to physical assets, and changes in the economic flows of the affected areaIn most cases, estimates of direct damages are made and allegedly represent the total effect of disastersHowever, the amounts of indirect losses that arise in the medium term as a result of the disaster may be of more significance to the affected population

    Roberto Jovel

  • Damage vs Losses:El Salvador Eartquakes in 2001Million US$Direct damages 939Indirect losses 665Total 1,604

    Roberto Jovel

  • Damage vs Losses:Argentine Floods in 2003Million US$Direct damages 662Indirect losses2,216Total 2,878

    Roberto Jovel

  • Damage vs Losses:Central America Drought in 2001Million US$Direct damages ...Indirect losses 162.2Total 162.2

    Roberto Jovel

  • The Timing of EffectsTime, monthsDirect DamagesIndirectLosses5 yrsAffect:Living conditionsEconomic development

    Roberto Jovel

  • Usefulness of the Damage and Loss AssessmentTo determine the amount and geographical distribution of disaster effects (damage and losses)To estimate financial requirements for reconstruction and medium and long term social and economic recoveryTo identify most affected sectors or areas that will require priority attention in reconstruction and recoveryTo provide basis for designing strategic framework for reconstruction and long-term economic and social recoveryTo identify mitigation activities in order to reduce effects of future disastersTo determine the capacity of affected government to face by itself the reconstruction and recovery requirements and by default to ascertain assistance requirements, whether internally or from abroad

    Roberto Jovel

  • The Damage and Loss Assessment ToolThe ECLAC experience in damage and loss assessment in the Latin America and Caribbean regionThe Handbook for Assessment of Socio-Economic and Environmental Effects of DisastersA tool for dialog and communication with decision makersanalyzing risk under alternative scenarios

    Roberto Jovel

  • Basic Concepts UtilizedOrigin of disastersHydrometeorologicalGeologicalMan madeType of disasterSuddenSlowly evolvingTypes of effects:Direct damagesIndirect lossesMacro-economic effects

    Roberto Jovel

  • Direct DamagesDestruction or partial damage to assets, including infrastructure, stocks, production ready for harvesting, natural resources, etceteraThey occur during or immediately after the disasterThey are measured in physical terms, and a monetary value is assigned to them

    Roberto Jovel

  • Examples of Direct DamagesValue of destroyed or damaged housingValue of destroyed or damaged household goods within affected housingValue of destroyed or damaged commercial buildingsValue of stocks stored in commercial buildings affectedValue of lands eroded or silted by floodingRepair and reconstruction value of water supply and sewerage, electricity, transport, etcetera

    Roberto Jovel

  • Criteria for the Valuation of Direct DamagesPresent (book) value of assets, adjusted for obsolence and maintenance levelReplacement value of assetsReconstruction costs including measures for modernization, mitigation and prevention

    Roberto Jovel

  • Indirect LossesChanges in economic flowsThey include:Future production that will not be obtainedIncreased costs and decreased revenues in the provision of servicesCost of relocation into safe areasHumanitary (emergency) assistance costsThey occur after the disasterMeasured in monetary (not physical) terms, at current prices

    Roberto Jovel

  • Indirect Losses: Examples

    Agricultural production that will note be obtained due to flood or drought, or that will not be sown because of soil erosion Increased operational costs or decreased revenues in the provision of water supply, electricity or transport servicesReduction in economic activity in the commerce and tourism sectorInvestments required for relocation of activities in safe areasCost of humanitarian assistance during emergency phaseCosts incurred to avoid epidemics after disasters

    Roberto Jovel

  • Total Amount of EffectsEquivalent to the addition of direct damages and indirect lossesExpressed in monetary termsUsually underestimated, in view of difficulty in estimating indirect lossesNo economic value is assigned to the loss of life

    Roberto Jovel

  • Macroeconomic EffectsThe impact of the disaster on the overall economic performance of the affected country or region, as measured on the main economic variablesMay not be added to the total amount of effects previously describedThey occur after the disasterShort term, up to six months (emergency and rehabilitation)Medium term, 1 to 2 years (rehabilitation and reconstruction)Long term (Structural changes, changes in development prospects, non replacement of assets)

    Roberto Jovel

  • Macroeconomic Effects..Measured as the difference in performance of main macro-economic variables, after and before the disasterEffects on following variables:Gross domestic product (GDP) at national and sectorial levelsTrade and payments balanceGross capital formationPublic finances Level of debt and monetary reservesChanges in consumer prices and inflationEmployment levelsPersonal and family incomeMorbidity and mortality levelsMalnutrition and migration

    Roberto Jovel

  • Effects on GDP: Hurricane Mitch in Honduras

    Roberto Jovel

  • Effect on Sectorial GDP: Mitch and Honduras

    Roberto Jovel

  • Effects on Foreign Sector: Honduras and Mitch

    Roberto Jovel

  • Effects on Public Finances: Honduras and MitchBefore the hurricane, fiscal deficit was expected to be 2.5% of GDP in 1998 As a result of the disaster, fiscal deficit jumped to 3.6% of GDP in 1998 and to 8% in 1999This was due toA drop in tax revenues due to diminished economic activityIncreased expenditures to meet requirements for humanitarian assistance and rehabilitation stages

    Roberto Jovel

  • Effect of Disasters on Gross Capital FormationGroos Capital FormationTimeDisasterDeveloping countryIndustrial economy

    Roberto Jovel

  • Other Macroeconomic EffectsDue to damages in productive activities, workers lose employment and incomeWorkers in the construction industry, however, may actually be in higher demand and have higher income during the reconstruction phaseConsumer good prices may rise due to lack of sufficient local production and to speculation, thus increasing inflation rates

    Roberto Jovel

  • Handbook for Estimating the Socioeconomic and Environmental Effects of Disasterswww.eclac.cl/mexico

    Roberto Jovel

  • rjovel@jovel.org

    Roberto Jovel