Strategy for Disaster Reduction
Latin America and the Caribbean
Newsletter ISDR Inform - Latin America and the Caribbean
Disaster in the Region
impact of the 1997-1998
The presidents of the Andean countries asked the Andean Development Corporation (Corporación Andina de Fomento, CAF) to assess the negative impact of the phenomenon and the way it was handled, and to present proposals on how to handle similar events in the future. The following is a summary of the social and economic impact of the 1997-1998 El Niño.
People in the region,
particularly low-income groups who tend to live in the areas most vulnerable
to natural disasters, suffered significant losses involving their already
scarce possessions and meager livelihoods. The floods and mudslides in
Ecuador, Peru and Bolivia damaged or destroyed 135,000 homes, and the
furniture and goods contained in them. Many of these homes will have to
be rebuilt in areas less prone to flooding. Close to 5,200 education facilities
were damaged or destroyed, as were their equipment and teaching materials.
In the health sector, 12 hospitals and 570 health centers suffered the
total or partial destruction of their infrastructure and equipment. All
five countries saw significant increases in vector-transmitted, dermatological,
bronchial and pulmonary diseases, prompting aggressive public health campaigns
to control the outbreaks.
Electricity generation was affected in drought-stricken areas, forcing the utility companies to use fuel-burning plants. In Peru and Ecuador, the floods damaged two hydroelectric plants, again requiring the use of fuelat greater expenseto generate electricity and prevent rationing.
The floods and mudslides destroyed or damaged close to 17,500 km of highways and roads, bridges and other related infrastructure, affecting the transport of people and merchandise and increasing operating costs. The lower river levels due to drought also increased the costs of transport on the Orinoco and Magdalena rivers, and the operating costs of several ports in Colombia and Venezuela.
The productive sector
was affected in its infrastructure, its stocks, and its production. The
floods destroyed or damaged agricultural infrastructure, reduced the number
of heads of cattle, and led to declines in productivity both in flooded
and drought-stricken areas. Fishing and fish processing were hurt by the
changes in the oceans temperature and salinity. The industrial and
commercial sectors lost infrastructure, equipment, and stocks; their sales
fell due to the lesser volume processed and sold as a result of the floods
and drought. Mining was also affected by flooding and reduced production.
Tourism infrastructure was hit and revenues fell because of problems with
the water and power supply during the high season.
Thanks to early warnings of the El Niño phenomenon, governments were able to take some prevention and mitigation measures and strengthen emergency preparedness and response agencies, which helped reduce the impact to some extent.
The economic impact
The total economic impact of the damage caused by the El Niño phenomenon in the Andean region between 1997 and 1998 is estimated at US$7.5 billion. Peru lost US$3.5 billion, Ecuador US$2.9 billion, Colombia US$564 million, Bolivia US$527 million, and Venezuela US$72 million.
Of the total amount, 39% corresponded to losses in production, 29% to damaged property, and 21% to increased service costs. The most affected sectors were the productive sector (US$3.6 billion), infrastructure (US$1.8 million), the social sector (US$736 million), and the service sector (US$621 million).
Ecuadors bill came to 14.6% of its Gross Domestic Product, Bolivias to 7%, and Perus to 4.5% of its GDP.
The damage wrought by El Niño reduced economic growth in 1998 by as much as 2.8% in the case of Peru (see Graph 3). Government deficits expanded due to the need to provide emergency relief and to the fewer taxes collected. The balance of trade was negatively affected by the lower exports and the need to raise imports to help with rehabilitation and reconstruction. Finally, the prices of scarce products have gone up, feeding inflation. These macroeconomic indicators may take years to recover.
The numbers reveal that the social and economic impact of the 1997-1998 El Niño on the Andean Community of Nations was so severe that vulnerability reduction must now be a top priority.
CAF, as mandated by the presidents of the region, is supporting the establishment of an Andean regional office for disaster reduction and the creation of a fund to finance regional vulnerability reduction activities. It will also publish a book detailing the impact of the 1997-1998 El Niño phenomenon in the region and the lessons learned, particularly on how to respond more effectively to such natural disasters in the future. Finally, CAF is promoting the strengthening and greater coordination of emergency management organizations in the Andean Community.