ECLAC’S PRESENTATIONS ADPC-WB Workshop - August 13-15, 2002 / Bangkok, Thailand

1. ECLAC’S PRESENTATIONSADPC-WB Workshop - August 13-15, 2002 / Bangkok, Thailand • 1: Presentation of ECLAC Methodology • 2: Sectoral Revision of Assessment in ECLAC Methodology • 3: Country experiences: World Bank’s experience in India and Turkey • 4: Global overview/Macro Effects of a Disaster in ECLAC Methodology

2. Presentation of the ECLAC methodology • General considerations • Valuation as a tool for reconstruction, mitigation and planning resilience • Usefulness of historical records • Methodological considerations • Definitions: risk, vulnerability, mitigation recurrence, etc. • Basic concepts: direct (assets/capital), indirect (flows/economical, financial, fiscal) • Valuation criteria • Sources of information: remote, statistical, direct observation, surveys, second hand, etc.

3. WHAT IS IT: • A tool for the socio-economic and environmental assessment of disasters • Multi-sectoral and multidisciplinary damage evaluation and quantification method for disaster affected sectors • Standard sectoral procedures that allows comparability of results • Instrument for the decision making process and for policy formulation as it identifies more severely affected sectors, geographical areas and vulnerable groups • Conceptual improvement for measuring aspects not included in national accounting and assessing specific vulnerability (of social groups, such as women and the environment)

4. WHAT IT DOES: • Allows projecting future performance of the affected economy in the short and medium term, and implement the necessary corrective economic policy measures • Allows to determine the State’s capacity to face reconstruction tasks and determine needs for cooperation and international financing • Facilitates training in damage valuation and formulation of mitigation strategies • Involves affected population with relevant authorities and aid providers • Puts in evidence the systemic character of the development process and the interaction among sectors and stakeholders

5. Social sectors Environment Infrastructure and services Productive sectors Dynamic interaction between sectors and activities with natural occurrences: Vulnerability and mitigation Landslips, avalanches and erosion Mudslides and silt deposits Groundswells, sea surges and high waves Flooding and rain

6. Vicious circle: Man, Environment, Disasters • Human actions progressively deteriorate the environment • Natural phenomena affect the environment (positively / negatively) • Impact of disasters tends to increase NATURAL PHENOMENA HUMAN ACTIONS ENVIRONMENT

7. BREAKING THE CYCLE OF CONFLICT AND RESUMING THE PATH OF DEVELOPMENT The World Bank’s Conflict Prevention and Reconstruction Team, SDV SECURITY (Reduced Vulnerability) PEACE SOCIAL STABILITY * GOOD GOVERNANCE ECONOMIC RECOVERY DEVELOPMENT DEMOCRACY

8. SEQUENCE OF EFFECTS PHENOMENON: Characteristics (physical description, typology and context) EFFECTS: direct indirect • LINKAGES • Menace Vulnerability Risk Impact/Benefit of reconstruction (global, by sector) • Reduce vulnerability • Synergies for reconstruction: “appropriation” of risk by affected/menaced population (community, social group, sector, country)

9. PREVENTION the “before” actions Actions (programmes, projects) with the objective of anticipating and counteract the negative consequence an event may have (hydro-meteorological, climatic, seismic, tectonic, geological, even technological, industrial or “complex” It implies namely operational and organisation actions, training of potentially affected groups and population to face a disaster’s consequences. SOME DEFINITIONS IN DISASTERS

10. MITIGATION encompasses actions “before”, “during” and “after” Actions (programmes, project) with the objective of counteracting (reducing the negative impact) of an occurrence. Includes allocation of resources to reinforce structures, redesign or alter existing elements to reduce vulnerability in addition to training and organisation (including at the community level) SOME DEFINITIONS IN DISASTERS (2)

11. VULNERABILITY calculation made on the basis or recurrence and severity of disastrous events Risk factors or exposure to danger of existing physical structures (buildings, houses, etc.) and basic infrastructure (lifelines, transportation and communications, etc.). Conditions of human settlements and localisation of productive activities (primary, industrial,l tertiary or services) and their linkage among them and with the environment. SOME DEFINITIONS IN DISASTERS (3)

12. DISASTER REDUCTION encompasses actions “before”, “during” and “after” Actions (programmes, project) with the objective of reducing vulnerability and exposure to risk in the face of the interaction between human action and natural foreseeable or recurrent events. Implies the use (design and enforcement) of construction codes, land-use regulation, space planning, institutional arrangements and community involvement SOME DEFINITIONS IN DISASTERS (4)

13. RISK MANAGEMENT (actions to be carried out “before” with consequences “during” and “after”) Pro-active strategy (in contrast to re-active response) to reduce vulnerability and counteract risk factors Its objective is disaster reduction Is not a sector action but a global set of actions encompassing all sectors, beginning with sound environmental management Is not a conservation policy per-se but requires sustainability criteria both in terms of natural resources and human intervention. SOME DEFINITIONS IN DISASTERS (5)

14. DISASTER MANAGEMENT actions to be carried “during” and the immediate (short-term) “after” The response strategy (re-active strategy) to, after the occurrence of a disaster, intends to counteract its more immediate negative impact and prevent more severe effects in the short term. Includes emergency actions (search and rescue, immediate assistance, shelter, sanitary and health campaigns, rehabilitation of lifelines, assessment of emergency needs and first appraisal of reconstruction requirements. SOME DEFINITIONS IN DISASTERS (6)

15. SEQUENCE OF DISASTER VALUATION

16. Direct damages Impact on assets Infrastructure Capital Stocks Occur immediately during or after the phenomenon that caused the disaster Indirect Damages Effects on flows Production Reduced income and increased expenses Are perceived after the phenomenon, for a time-period that can last from weeks to months, till recuperation occurs Concepts

17. Measuring the damage “delta” or damage gap Pre-existing conditions (ex ante) The measure Of direct and indirect damages Upon the pre-existing situation (sector by sector baselines) is aggregated into the national accounts and determines the resulting disaster-caused scenario, as the gap over the expected performance prior to the event. Several scenarios may be outlined, based on the assumptions made for the reconstruction process Expected performance (without disaster) 3-5 years Disaster impact (ex post) 3-5 years

18. * DISASTER DEVELOPING COUNTRIES INDUSTRIALIZED COUNTRIES THE “PERVERSE EFFECT” OF DISASTERS ON GROSS CAPITAL FORMATION IN A SMALL ECONOMY Adapted from Mora, “El impacto de los desastres, aspectos sociales, polítifcos económicos, ambientales y su relación con el desarrollo de nuestros países (BID, 1999) GROSS CAPITAL FORMATION * TIME

19. * DISASTER * * * DEVELOPING COUNTRIIES INDUSTRIALIZED COUNTRIES THE EFFECT OF SUCCESSIVE DISASTERS ON CAPITAL FORMATION Adapted from Mora, “El impacto de los desastres, aspectos sociales, polítifcos económicos, ambientales y su relación con el desarrollo de nuestros países (BID, 1999) GROSS CAPITAL FORMATION * TIME

20. Know the pre-existing situation • Identify the core development factors of the economy • Identify the main characteristics at the time of the disaster: face of the economic cycle, seasonal elements, indebtedness level, domestic savings, FDI flows, etc. • Access the macroeconomic data bases from national authorities, academic analysts and/or consultants and advisors in the country • Identify existing econometric models for the local economy • Identify if input-output tables are available or determine weighing factors that indicate intersectoral linkages.

21. Acknowledge the expected or projected outcome in the absence of disaster • Obtain from government, academics and/or advisors and private consultants the existing scenarios or short and medium term projections before the disaster • Build a price table at current value for the disaster period with at least five year projections. There may have been more than one pre-disaster scenario for the main economic variables • Build a constant-value (real magnitude) series for the main variables (using the country’s base year, either in local currency or US dollars • Establish the rate of exchange that will be used for the valuation

22. Determine the situation caused by the disaster • Stemming from sector valuations assess the value-added changes expected for every sector in the short term and for a medium-term period to be agreed (3-5 years or more) • Supported by input-output tables 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) : variations in the main economic gaps is highlighted: external sector, fiscal deficit, internal equilibrium (prices, exchange rate, etc.)

25. Future Scenarios • 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.)

26. Social Sectors Housing Health Education, culture, sports Infrastructure Transport and communications Energy Water and sewerage Productive sectors Goods: agriculture, industry Services: commerce, tourism, etc. Global impact On the environment Gender perspective Employment and social conditions Macroeconomic assessment Sector by sector valuation methodology

27. Social Sectors Including subsectors and issues of special relevance: Food and nutritional conditions Differential impact on women

28. Productive sectors 9. Agriculture, cattle raising and fishing 10. Industry, commerce and services 11. Tourism

31. Damages to agriculture, cattle raising and fishing Direct damages • Repair or reconstruction costs of agriculture, cattle farming and fishing infrastructure, including tertiary level roads • Damages or destruction of fishing fleet • Damages or destruction of fish farming ponds and shrimp factories • Agriculture production ready to be harvested • Stocked agricultural produce and grains • Losses in animal stock • Indirect damages • Reduced yields in future crops • Not planting of future crops • Reduced fishing • Loss of employment • Differential impact on women

32. Food and nutrition estimates of impact • Prepare a basic foodstuff availability balance to identify food and nutritional deficits • Identify the location and number of affected population • Indirect costs • Food cost and temporary shelter for affected population deprived of food during migration process • Determine the indirect cost of imported supply and food distribution campaigns to aboid malnutrition and migration

33. Commerce, industry and services Direct damages • Repair or reconstruction costs of infrastructure • Repair or replacement cost of equipment and machinery • Losses in finished production (stocks and inventories) Indirect damages • Reduced production • Temporary employment losses • Differential impact on women

34. Manufacture Damages in Millions of US$ Direct Indirect Total Guarenas/Guatire industrial complex 6.4 3.0 9.4 300 small manufacturing enterprises 13.4 11.6 25.0 Damage in agro-industry … 16.5 16.5 Damages in construction-related ones 1.0 1.0 2.0 Totals 20.8 32.1 52.9

35. Commercial losses Damages in Millions of US$ Direct Indirect Total Damages to supermarkets 84.3 16.9 101.9 Damages to medium-sized commerce 206.3 51.6 257.9 Damages in small and micro businesses 23.4 4.7 28.1 Totals 314.0 73.2 387.2

36. Damages to tourism Direct damages • Repair or reconstruction costs of tourism infrastructure • Repair or replacement cost of furniture and tourism equipment • Damages to beaches and other tourist attractions Indirect damages • Temporary fall in hotel occupancy and income of enterprises • Negative effect in linked activities • Cancelled future reservations and cost of promotion campaigns • Unemployment • Differential impact on women

40. Women and disasters • Men and women share damage impact of disasters; nevertheless women face particular effects associated with sex differences • Differences in gender roles require different apporaches in the face of reconstruction

41. Disasters and women • Estimates regularly made by ECLAC include damages to assets pertaining to women en each sector, as well as indirect losses of income in remunerated work • To this should be added other assets and non-formal activities, non-paid household chores performed at home, all of which are not included in the national accounts

42. Reproductive work: Renewal of workforce (child care, education, etc.) Productive labour force availability (household care and cleaning, food preparation, water supply, personal care and attention, etc.) Caring of labour force and population not participating in the workplace (ill, aged, incapacitated, etc.) Backyard economy (to supplement income and nutrition of the household): Domestic bird and minor livestock raising Derivate foodstuff within the household (eggs, milk, etc.) Fruit yard Small subsistence lots and parcels Definitions

43. Direct damages • Housing, furnishings, appliances lost, when women are heads of household • Assets in formal sectors owned by women • Machinery and equipment of micro and small enterprises informally operated by women at home • “Backyard economy” assets (small species cattle, family lot, vegetable gardens and informally raised crops) • Production stocks of both formal and informal activities

44. Indirect damges or losses • Temporary loss of remunerated work outside the home • Production losses of micro and small enterprises • Same for household operated businesses • Production losses of “backyard economy” • Increase in “reproductive” associated tasks and work • Other losses

45. FUTURE DEVELOPMENTS VULNERABILITY AND DEVELOPMENT (1) • Subject of analysis: relation of size, development and vulnerability: • “resilience” (strengthening and preparedness) in the face of: • shocks (internal, environmental, climatic, external) • Dependency and diversification • Integration and producitve/competitive linkages • Analytical-mathematical formulation • Global (transborder, regional) impact of disaster • Economic, social, environmental • Effects on the donor/relief community • Effects on private sector (transnational corporations, FDI, financial markets, etc.)

46. FUTURE DEVELOPMENTS VULNERABILITY AND DEVELOPMENT (2) • Lessons from Mitch, droughts and earthquakes in 2001, climatic variability and 30 years of disaster valuation: “revisit” and appraise reconstruction process • Broadening methodology to social and environmental valuation • Enhance current methodology with consideration of prospective alternative scenarios and macroeconomic models • Train national authorities in the areas of economics and planning • Promote mitigation and risk managements policies beyond prevention and response

47. Proposed courses of action Restore economic and social fabric Restore and strenghten productive linkages (upstream/downstream) Reduce internal / external vulnerability • Sectoral components: • Monitoring, analysis and climate forecasting, including forest fires • Contingency plans in key sectors, for example: • Agriculture, cattle raising, • rural poverty, • energy and baselines • Water and health • Interconnected systems • Regulation of basic services with sponsorship of private enterprise • Focalized plans for vulnerable groups, including employment, food availability and nutrition • Education to reduce vulnerability • Diagnosis and monitoring of vulnerability at the local level • External policies: • Introduce risk management as part of the regional international agenda, alongside: • External competitive insertion • Benefitting from the globalization process • Inclusive regional insertion • Internal policies: • Include vulnerability reduction as an objective of development plans alongside goals of: • Competitive growth • Equitable development • Sustainable and sustained development • Social participation

48. Disasters, conflict and crisis management • How to approach the different interventions required: conceptual aspects, definition problems and purpose of the interventions • Are they different sides of the same coin: crisis managements associated with disasters and / or conflict? Conceptual quagmire • Methodological problems: needs assessments vs. Causal analysis • Operational problems: setting priorities and differentiating emergency from urgency: simultaneity and sequencing • Policy problems: positive vs. negative intervention; resource allocation vs. policy change promotion

49. Comparative analysis of disasters and post-conflict situations

50. Comparative analysis of disasters and post-conflict situations (cont.)