MercoPress. South Atlantic News Agency

“Disaster risk” and potential economic losses in 17 Latam countries

How to anticipate impact of a Chilean-quake phenomenon

Latin America and the Caribbean face potentially crippling economic and social costs from natural disasters and need to do more to reduce risks and prepare government finances to respond to eventual catastrophes, says a new set of indicators by the Inter-American Development Bank (IDB).

The new edition of Indicators of Disaster Risk and Risk Management details the potential economic losses a group of 17 countries in this region could suffer in the event of a natural disaster and evaluates how effective their governments are in managing these risks. The indicators show that the region’s systems and policies to manage disaster risk are still unsatisfactory.

The latest results of the risk indicators are been presented at the Ninth Consultative Meeting of the Global Facility for Disaster Reduction and Recovery, currently held at IDB headquarters.

The system of indicators, developed in 2005 with financial support from the IDB Multi-donor Disaster Prevention Trust Fund and the Japan Special Fund, allows countries to better assess their risks, serving as a useful guide for policymaking and government actions to reduce human, infrastructure, financial, and economic losses caused by earthquakes, floods and other natural events. The IDB is currently working with 15 countries in Latin America and the Caribbean in projects related to disaster risk management.

Human and economic losses stemming from natural disasters have increased over the past century in this region as a consequence of population growth, unplanned urbanization, over exploitation of natural resources and probably the effects of climate change. Earthquakes, floods and storms caused 34 billion US dollars in economic losses in 2000–2009, compared with losses of 729 million USD in the in the 1940s.

For example, the indicators show that if Peru were hit today by an earthquake similar to the one that hit Chile earlier this year, it could suffer economic losses of as much as 15.8 billion. A similar event could cause losses of as much as 5.2 billion in Mexico, 3.8 billion in Colombia and 3.5 billion in Ecuador.

“The region faces significant levels of risk that have apparently not being fully gauged by policymakers and society in general. Latin America and the Caribbean have shown unsatisfactory levels of risk management,” said Héctor Malarín, head of the IDB Rural Development, Environment and Disaster Risk Management Division”.

In order to improve their risk management, countries need to upgrade their policies, enhance integration among agencies at the central and sub-national levels of government as well as invest to reduce, retain and transfer these risks.