experience of detailed assessment in eclac (direct and indirect impacts) (eclac) experience of...
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Experience of detailed assessment in ECLAC
(direct and indirect impacts) (ECLAC)
Experience of macro-economic aspects in
ECLAC (ECLAC)
Conceptual considerations
Natural HazardsNatural 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
lossesV=p(NP, HS)
RISKProbability and magnitude of damage and losses
R=f(NZ, V)
Assessment MethodologyAssessment Methodology
DamageDamageTo AssetsTo Assets
Changes in Changes in Economic FlowsEconomic Flows
ReconstructionReconstructionOf AssetsOf Assets
- Changes in Macro-- Changes in Macro-Economic PerformanceEconomic Performance- Welfare impact- Welfare impact
Financial gapFinancial gap(fiscal and(fiscal andInvestmentInvestmentPortfolio)Portfolio)
CyclonCyclone or e or
hurrichurricaneane
Sector by sector valuation Sector by sector valuation methodologymethodology
Social SectorsSocial Sectors HousingHousing HealthHealth Education, culture, sportsEducation, culture, sports
InfrastructureInfrastructure Transport and Transport and
communicationscommunications EnergyEnergy Water and sewerageWater and sewerage
Productive sectors Productive sectors Goods: agriculture, industryGoods: agriculture, industry Services: commerce, tourism, Services: commerce, tourism,
etc.etc. Global impactGlobal impact
On the environmentOn the environment Gender perspectiveGender perspective Employment and social Employment and social
conditionsconditions Macroeconomic assessmentMacroeconomic assessment
Sources of informationSources of information
Strategic sources The press Maps Verification visits Surveys
Quick appraisal Household surveys Expert’s quick appraisal
Secondary sources 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?
HUMAN HUMAN IMPACTIMPACT
VictimsVictims
HealthHealth
EducationjEducationj
NATURAL HABITAT / NATURAL HABITAT / ENVIRONMENTENVIRONMENT
-Water (quality and Water (quality and quantity, retention and quantity, retention and control)control)
-Air (pollution, clean)Air (pollution, clean)
-Biodiversity and integral Biodiversity and integral ecosystem management ecosystem management (impact at global, macro (impact at global, macro and micro systems)and micro systems)
FINANCIALFINANCIAL
- Credit accessCredit access
- Land tenureLand tenure
- Legal ownership and - Legal ownership and empowerement (differential empowerement (differential access to creditaccess to credit
PHYSICAL INFRASTRUCTUREPHYSICAL INFRASTRUCTURE
Type and quality of settlements and Type and quality of settlements and housinghousing
-Communications and transport Communications and transport infrastructureinfrastructure
-Other built infrastructure and Other built infrastructure and vulnerabilityvulnerability
SOCIAL ASPECTSSOCIAL ASPECTS
-Networks and systems (security, Networks and systems (security, safety and solidarity)safety and solidarity)
-Family units, extended linksFamily units, extended links
-Violence and securityViolence and security
Integrated systemic impactIntegrated systemic impact
The profile changes in the face of The profile changes in the face of disaster’s differential impact on each disaster’s differential impact on each one ofthe five cornersone ofthe five corners
1
10
100
HUMAN
SOCIAL
NATURAL/ENVIRONMENTALFINANCIAL
PHYSICAL
Pasado Presente Corto plazo Mediano y largo plazo
Future ScenariosFuture Scenarios 11stst. Scenario: damage assessment and event’s impact, without . Scenario: damage assessment and event’s impact, without
including reconstruction actionsincluding reconstruction actions Alternative reconstruction scenariosAlternative reconstruction scenarios
Taking into account no longer the replacement but the Taking into account no longer the replacement but the reconstruction costsreconstruction costs
Emerging reconstruction priorities, sector by sectorEmerging reconstruction priorities, sector by sector The emerging reconstruction strategies in the immediate weeks The emerging reconstruction strategies in the immediate weeks
after the disasterafter the disaster The economy’s absorption capacity of foreign resourcesThe economy’s absorption capacity of foreign resources The economy’s capacity to execute projectsThe economy’s capacity to execute projects The performance of key economic variables in the face of an The performance of key economic variables in the face of an
increase or impending reorientation of resources for increase or impending reorientation of resources for reconstruction: interest rates, indebtedness, inputs and production reconstruction: interest rates, indebtedness, inputs and production means availability (raw materials, capital goods, domestic saving, means availability (raw materials, capital goods, domestic saving, labour force, etc.)labour force, etc.)
The situation after the disasterThe situation after the disaster 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
Modelling dynamics Use economic and econometric tools A simplified graphic analysis
Crecimiento del PIB en Honduras
- 2.0
- 1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
1996 1997 1998 1999 2000 2001 2002 2003 2004
Tasa de crecimiento sin Mitch ni sequìa Crecimiento con Mitch y sequía
MITCH
SEQUIA
Evolución del PIB en El Salvador
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
1996 1997 1998 1999 2000 2001 2002 2003 2004
Tasa de crecimiento sin Mitch, terremotos ni sequía
Crecimiento con Mitch y terremotos
MITCH
TERREMOTO
SEQUIA
Evolución del PIB en Nicaragua
-1,0
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
1996 1997 1998 1999 2000 2001 2002 2003 2004
Tasa de crecimiento sin Mitch ni sequìa Crecimiento con Mitch y sequía
MITCH
SEQUIA
Basic steps
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
Quantifiable effects of the disaster on the economic growth as a whole and on the main aggregates GDP National income Investment, gross capital formation Economic gaps (private, public, external) Inflation, balance of payments
Phases in macroeconomic assessment
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
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
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 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
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.Thank you for your attention.