Transcript Experience of detailed assessment in ECLAC (direct and indirect

impacts) (ECLAC)
Experience of macroeconomic aspects in
ECLAC (ECLAC)
Conceptual considerations
Natural Hazards
Natural phenomenon with the
potential of inflicting damage and
human, economic and financial
losses
NZ= p(NP)
Vulnerability
Susceptibility for damage and
human, economic and financial
losses
V=p(NP, HS)
RISK
Probability and magnitude of damage and losses
R=f(NZ, V)
Assessment Methodology
Reconstruction
Of Assets
Damage
To Assets
Financial gap
(fiscal and
Investment
Portfolio)
Changes in
Economic Flows
Cyclone or
hurricane
- Changes in MacroEconomic Performance
- Welfare impact
Sector by sector valuation
methodology
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Social Sectors
 Productive sectors
 Housing
 Goods: agriculture, industry
 Health
 Services: commerce, tourism,
 Education, culture, sports
etc.
Infrastructure
 Global impact
 Transport and
 On the environment
communications
 Gender perspective
 Energy
 Employment and social
 Water and sewerage
conditions
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Macroeconomic assessment
Sources of information
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Strategic sources
The press
Maps
Verification visits
Surveys
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Quick appraisal
Household surveys
Expert’s quick appraisal
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Secondary sources
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Census
National or regional
reports
Interviews
Remote sensing data
Sistemas de
información geográfico
How is information organized
and obtained?
Towards a standardized template, in a simple excell
worksheet:
- The mexican experience
- The Gujarat effort
- The possibilities and the difficulties
Varying institutional (sources of information) arrangements
- Varying quality of information
- Varying measurement units
- Adapt to local conditions
How is information organized?
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Integrated systemic impact
HUMAN
IMPACT
Victims
SOCIAL ASPECTS
Health
NATURAL HABITAT /
ENVIRONMENT
-Networks and systems (security, Educationj
safety and solidarity)
-Water (quality and
quantity, retention and
control)
-Family units, extended links
-Air (pollution, clean)
-Violence and security
-Biodiversity and integral
ecosystem management
(impact at global, macro
and micro systems)
PHYSICAL INFRASTRUCTURE
Type and quality of settlements and
housing
-Communications and transport
infrastructure
-Other built infrastructure and
vulnerability
FINANCIAL
- Credit access
- Land tenure
- Legal ownership and
empowerement (differential
access to credit
The profile changes in the face of
disaster’s differential impact on each
one ofthe five corners
HUMAN
100
PHYSICAL
10
SOCIAL
1
FINANCIAL
Pasado
Presente
NATURAL/ENVIRONMENTAL
Corto plazo
Mediano y largo plazo
Future Scenarios
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1st. Scenario: damage assessment and event’s impact, without
including reconstruction actions
Alternative reconstruction scenarios
 Taking into account no longer the replacement but the
reconstruction costs
 Emerging reconstruction priorities, sector by sector
 The emerging reconstruction strategies in the immediate weeks
after the disaster
 The economy’s absorption capacity of foreign resources
 The economy’s capacity to execute projects
 The performance of key economic variables in the face of an
increase or impending reorientation of resources for
reconstruction: interest rates, indebtedness, inputs and
production means availability (raw materials, capital goods,
domestic saving, labour force, etc.)
The situation after the disaster
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From sectoral valuations assess the value-added
changes expected for every sector in a short
term/medium-term period (3-5 years or more)
Based on input-output tables, SAMs or sector
weighing factors, determine the projection of
damages of one sector to the others
A damage scenario is built (taking into account the
measured losses at replacement value) and
variations in the main economic gaps, GDP, BOP,
public finances, prices and inflation, employment
and gross investment
Summary Table
Looking back: What has actually
happened, examples from Mitch
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Modelling dynamics
Use economic and econometric tools
A simplified graphic analysis
Crecimiento del PIB en Honduras
6.0
5.0
4.0
MITCH
3.0
SEQUIA
2.0
1.0
0.0
1996
1997
1998
1999
2000
2001
2002
2003
-1.0
-2.0
Tasa de crecimiento sin Mitch ni sequìa
Crecimiento con Mitch y sequía
2004
Evolución del PIB en El Salvador
5.0
4.5
4.0
MITCH
3.5
3.0
SEQUIA
2.5
2.0
TERREMOTO
1.5
1.0
0.5
0.0
1996
1997
1998
1999
2000
2001
2002
2003
Tasa de crecimiento sin Mitch, terremotos ni sequía
Crecimiento con Mitch y terremotos
2004
Evolución del PIB en Nicaragua
8,0
7,0
6,0
5,0
4,0
3,0
SEQUIA
2,0
1,0
0,0
1996
1997
MITCH
1998
1999
2000
2001
2002
2003
2004
-1,0
Tasa de crecimiento sin Mitch ni sequìa
Crecimiento con Mitch y sequía
Basic steps
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Macroeconomic assessment sequence
Role of the macroeconomist
Establishment of a baseline
Assessment of the economic situation
following the disaster (effects on economic
growth and income and then on private, fiscal
and external accounts
Phases in macroeconmic
assessment
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Quantifiable effects of the disaster on the
economic growth as a whole and on the main
aggregates
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GDP
National income
Investment, gross capital formation
Economic gaps (private, public, external)
Inflation, balance of payments
Phases in macroeconomic
assessment
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The most difficult task is to verify the
consistency of different estimations by
comparing the evolution of macroeconomic
variables with that obtained by putting
together sectoral, regional or partial
information
Phases in macroeconomic
assessment
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Most importantly, macroeconomic
assessment provides a basis on which to
estimate the financial and technical
cooperation that the international community
is expected to contribute during the
rehabilitation and reconstruction processes
Macroeconomic models
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There is no such a model as “one size fits all”
Some apply stock-flow and circuit approach
models
Others apply models looking for compatibility
of a set of economic configurations fixing
some parameters (fiscal stance, elasticities)
Policy implications
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Natural disaster exposure is not unlike other exposures to risk
(financial and commercial)
Risk exposure has a positive correlation with poverty: disasters
are not evenly distributed neither in their occurrence or impact
There is a regressive nature to economic, social and other
impacts
Measurement of natural phenomena’s strength and recurrence or
direct asset losses does not give the real image of disaster’s
perverse consequences
The main stakeholders in a disaster are its victim (actual or
potential)
Imperfect or non-active markets require government intervention
Macroeconomic models
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Considering data limitations on disaster
evaluations, the use of consistency models is
an alternative that can provide quick and
reliable estimations, given specific
parameters and assumptions. However, final
decision should be made on a case–by-case
basis
Thank you for your attention.