IMPACT OF HURRICANE KEITH IN BELIZE

EVALUTION TEAM MEMBERS 15 members15 members 6 consultants and experts from other international organizations: IICA, PAHO and UNICEF6 consultants and experts from other international organizations: IICA, PAHO and UNICEF technical and logistic support from IDB’s representationtechnical and logistic support from IDB’s representation full cooperation of Belize governmentfull cooperation of Belize government

SCHEDULE Information gathering Information gathering Preparation of draft report Preparation of draft report 22 - Submission of report to Government22 - Submission of report to Government Editing, revising and printing of report Editing, revising and printing of report 28 - Formal submission to Government and IDB for trasmsittal to Friends of Belize28 - Formal submission to Government and IDB for trasmsittal to Friends of Belize 7 December (in Washington, at IDB) Friends of Belize Conference7 December (in Washington, at IDB) Friends of Belize Conference

WHAT DO WE MEASURE

ECONOMIC ANALYSIS OF NATURAL DISASTERS Direct damagesDirect damages Indirect DamagesIndirect Damages Total cost of damagesTotal cost of damages Global (macroeconomic) effectsGlobal (macroeconomic) effects

DIRECT DAMAGES Are all damages to assets (capital, inventories and stock, finished products, inputs and production in process, raw materials, spare parts, etc.).Are all damages to assets (capital, inventories and stock, finished products, inputs and production in process, raw materials, spare parts, etc.). It includes damage to property that occurs simultaneously or immediately after the disastrous event.It includes damage to property that occurs simultaneously or immediately after the disastrous event. Covers damage to physical infrastructure, buildings, machinery and equipment, warehouses, transport infrastructure and equipment, furnishings, agricultural soil, inputs and production --including crops on ground not collected-- irrigation and drainage works, dams and reservoirs, etc.Covers damage to physical infrastructure, buildings, machinery and equipment, warehouses, transport infrastructure and equipment, furnishings, agricultural soil, inputs and production --including crops on ground not collected-- irrigation and drainage works, dams and reservoirs, etc. Is measured in physical terms and is assigned a value in monetary terms.Is measured in physical terms and is assigned a value in monetary terms.

CONSIDERATION OF REPLACEMENT COSTS Value is assigned on “as is” basis: present value of assets includingpresent value of assets including depreciation, tear and wear anddepreciation, tear and wear and level of maintenance or repair,level of maintenance or repair, not replacement (at current costs of similar good) or reconstruction (improved, less risky, technologically upgraded, etc.)

CONSIDERATION OF REPLACEMENT COSTS In the productive sectors replacement costs imply losses in assets (infrastructure and lost production damaged by the event),losses in assets (infrastructure and lost production damaged by the event), income lost and production that will not be obtained indirectly due to the event, andincome lost and production that will not be obtained indirectly due to the event, and investment that will have to be made to recuperate a similar production level to pre-hurricane levels. This preliminary estimate will vary in time, according to price fluctuations in the coming months, financial resources available and time- frame associated with investment maturity and natural growth of plants.investment that will have to be made to recuperate a similar production level to pre-hurricane levels. This preliminary estimate will vary in time, according to price fluctuations in the coming months, financial resources available and time- frame associated with investment maturity and natural growth of plants.

INDIRECT DAMAGES Are losses in flows (production that will not be realised, goods and services not provided or made costlier due to the disaster).Are losses in flows (production that will not be realised, goods and services not provided or made costlier due to the disaster). Includes additional costs due to the emergency in the distribution, marketing and consumption cycle.Includes additional costs due to the emergency in the distribution, marketing and consumption cycle. Are measured in monetary terms (not physical), at current (pre-disaster) prices and establishing changes in these.Are measured in monetary terms (not physical), at current (pre-disaster) prices and establishing changes in these.

INDIRECT DAMAGES (2) Increased operational costs due to destruction or damage to infrastructure and other assets, including stocks.Increased operational costs due to destruction or damage to infrastructure and other assets, including stocks. Additional production costs and increased costs in distribution and supply of goods and services due to use of alternate means.Additional production costs and increased costs in distribution and supply of goods and services due to use of alternate means. Income losses resulting of diminished economic activity (both in terms of production and distribution).Income losses resulting of diminished economic activity (both in terms of production and distribution). Extraordinary costs associated with emergency needs (such as health and hygiene campaigns, vaccination programmes, potabilization of water, etc.).Extraordinary costs associated with emergency needs (such as health and hygiene campaigns, vaccination programmes, potabilization of water, etc.). Extraordinary investments for the (temporary) resettlement of activities (production, distribution, services, etc.) and sheltering homeless or displaced population.Extraordinary investments for the (temporary) resettlement of activities (production, distribution, services, etc.) and sheltering homeless or displaced population.

TOTAL COST OF DAMAGES It is the sum total of direct and indirect damages, in material (physical) terms and monetary value, attributable to the disaster.It is the sum total of direct and indirect damages, in material (physical) terms and monetary value, attributable to the disaster. Is undervalued and tends to reflect mostly the direct damages without considering the emergency costs (search and rescue, provision of food, medicines, shelter, temporary displacement of activities, etc.Is undervalued and tends to reflect mostly the direct damages without considering the emergency costs (search and rescue, provision of food, medicines, shelter, temporary displacement of activities, etc. Does not quantify value of lives lost, recording only the number of deaths, injured, disappeared or most severely affected.Does not quantify value of lives lost, recording only the number of deaths, injured, disappeared or most severely affected.

GLOBAL EFFECTS Refers to the impact on the overall performance of the economy, measured by the main economic variables.Refers to the impact on the overall performance of the economy, measured by the main economic variables. Are felt during a certain lapse of time after the disaster:Are felt during a certain lapse of time after the disaster: –in the short run (6 months to a year in terms of emergency and rehabilitation), –medium-term 2 to 4 years) in terms of rehabilitation- reconstruction, and –in the long run (in terms of permanent structural change, cancellation of development opportunities and assets never replaced.

MACROECONOMIC EFFECTS Are measured as the difference in the performance of main economic indicators after the disaster and the existing projections or estimates before its occurrence.Are measured as the difference in the performance of main economic indicators after the disaster and the existing projections or estimates before its occurrence. Includes the relative value of the following:Includes the relative value of the following: –Gross Domestic Product, aggregated and by sectors. –Balance of payments and trade balance. –Indebtedness level and monetary reserves. –Public finances balance (change in the relation between income and outlays). –Net capital formation (gross investment) –Price variations (inflation) –Employment/unemployment levels –Family and personal income –Other social indicators (education, health, housing, etc.)

MAJOR TROPICAL STORM AND HURRICANES IN THE CARIBBEAN,

Contents of report The proposed outline for the report will include: –Summary and conclusions –Description of the event (magnitude, extent, force) –Sectoral evaluations –Summary of damages –Overall economic, infrastructural, social, and environmental impact –Macroeconomic and other policy implications –Towards a reconstruction strategy: risk reduction and vulnerability mitigation –A tentative list of project profiles for reconstruction and mitigation –The need for external cooperation

Social damages –Population/areas affected –Impact on social sectors (accounting both on infrastructure losses and cost of services lost and extraordinary expenses associated with the emergency) HealthHealth Education (including sport facilities)Education (including sport facilities) HousingHousing Living conditions (effects on social fabric, on different socio-economic groups, including the gender perspective, employment, etc.)Living conditions (effects on social fabric, on different socio-economic groups, including the gender perspective, employment, etc.)

Infrastructure damages Basic services and lifelinesBasic services and lifelines Transportation and port/docking facilitiesTransportation and port/docking facilities TelecommunicationsTelecommunications EnergyEnergy Public buildings and infrastructurePublic buildings and infrastructure Urban servicesUrban services

Economic sector losses Agriculture, fisheries, and other rural activitiesAgriculture, fisheries, and other rural activities Industry (including free zones) and services (commercial, financial, etc.)Industry (including free zones) and services (commercial, financial, etc.) Tourism (both effects on infrastructure losses and damages to hotels, restaurants, etc., flows of visitors, cruise-ship visitors, impact on ground operations (tour operators, travel agencies, etc.)Tourism (both effects on infrastructure losses and damages to hotels, restaurants, etc., flows of visitors, cruise-ship visitors, impact on ground operations (tour operators, travel agencies, etc.)

Environmental, cultural and historical damages To ecosystems (marine life, cays, reef, natural reserves, ecological parks, etc.)To ecosystems (marine life, cays, reef, natural reserves, ecological parks, etc.) to archaeological sites and cultural heritageto archaeological sites and cultural heritage Assign an economic value to these losses in terms of:Assign an economic value to these losses in terms of: –intervention to redress damage –environmental services lost (for the period of recovery) –assets lost

Overall economic impact (on the basis of expected performance ex ante of the event and the measurement made by the mission of post-facto effects), indicating:(on the basis of expected performance ex ante of the event and the measurement made by the mission of post-facto effects), indicating: –impact on macroeconomic variables (such as GDP, external/fiscal balances, etc.),and –projected reconstruction needs in the short/medium term

SUMMARY OF DAMAGES

The summary data on direct and indirect damage indicates that –the most affected sectors are the productive ones: –tourism and agriculture represent over 47 per cent of the direct damage measured. –Total damage to the economic sectors is estimated as 59 per cent of total damage –Losses of infrastructure account for about 16 per cent of total damage. Their repair or replacement must be a priority as they perform a generator function to economic and social activity nation-wide.

KEITH’S IMPACT ON BELIZE ECONOMY

KEITH’S EFFECTS ON GDP

Reconstruction strategy and priorities Definition of a mitigation and reconstruction strategyDefinition of a mitigation and reconstruction strategy Capital losses and reconstruction funds neededCapital losses and reconstruction funds needed Social sectors restitution and compensation mechanismsSocial sectors restitution and compensation mechanisms Identification of local constraints and resource-complements required to overcome themIdentification of local constraints and resource-complements required to overcome them appeal of assistance in reconstruction (as distinct from the emergency needs)appeal of assistance in reconstruction (as distinct from the emergency needs) role of the private sectorrole of the private sector

ANNEX: List of project profiles in the form of individual fact sheet for each profile indicating sector, content, objectives, actions to be performed, total cost, local inputs and external resources needed, indicating executing agency suggested and possible source of resources.List of project profiles in the form of individual fact sheet for each profile indicating sector, content, objectives, actions to be performed, total cost, local inputs and external resources needed, indicating executing agency suggested and possible source of resources.

Sector composition of the projects identified In the amount of BZ$211.6 million (or US$105.8) in percentages: Projects in social sectors48.0 Health and sanitation2.5 Education1.4 Housing44.1 Energy, water supply, sanitation and telecommunications 6.1 Transport subsector15.8 Productive sectors24.8 Agriculture24.3 Tourism0.5 Environmental management5.3 Prevention and mitigation

Thus the urgency to face the challenge not only of replacing lost housing and other social infrastructure but to do so with new, more resilient criteria and giving full attention to risk reduction since –as Keith made apparent— Belizean society has a high level of exposed vulnerability.

On occasion an event like Keith –fortunately enough without major losses of lives as has recently occurred in other countries—opens the opportunity for a change of policy and a soul-searching effort to avoid preserving or aggravating presently negative trends. Certainly Keith represents an economic setback in some aspects but it may be just the kind of reminder needed to give a hard look to ongoing processes that may be rectified.

IMPACT OF HURRICANE KEITH IN BELIZE