Tags: CB | Haiti | Earthquake | Damage

Study: Quake Damage Twice Value of Haiti Economy

Tuesday, 16 Feb 2010 03:46 PM

 

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Damage from Haiti's catastrophic Jan. 12 earthquake may be twice the value of the country's annual economy, Latin America's main development bank said Tuesday.

A report by three Inter-American Bank economists found last month's earthquake to be more devastating than the 2004 Indian Ocean tsunami was for Indonesia, and five times deadlier than the 1972 earthquake that leveled Nicaragua's capital.

Economists Eduardo Cavallo, Andrew Powell and Oscar Becerra estimated the magnitude-7 quake wrought damage worth between $8.1 billion and $13.9 billion.

Haiti produced only $7 billion worth of goods and services in 2008, according to the World Bank.

"This is just an assessment of damage; it gives no indication of the amount of money to get the country back as if nothing had happened," Cavallo told The Associated Press by phone.

He said an ongoing assessment will be needed to determine the total amount Haiti needs to rebuild.

The authors used statistical models based on data complied from about 2,000 natural disasters since 1970 — taking into account estimated death tolls, levels of economic development and other factors — and they caution the study is preliminary.

They came up with a wide range of potential estimates, including one as low as $4.1 billion.

But because there is so little precedent for a disaster this size — killing more than 200,000 people and striking directly at the heart of the country's political and economic center — Cavallo said they believe the final figure will be closer to their highest estimates.

That is devastating news for a country whose economy was faltering before the disaster and is the Western Hemisphere's smallest per capita.

The Dominican Republic, which shares the island of Hispaniola with Haiti and has a similarly sized population, had a $46 billion economy in 2008.

Disasters on the scale of Haiti's quake tend to induce long-term poverty that is difficult to reverse.

In many of the countries studied after their disasters, the authors found, personal wealth remained 30 percent lower 10 years after the events even with large amounts of international aid.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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