‘We were living in paradise’

El Salvador’s earthquakes affect both rich and poor

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The IDB responds. The IDB started working on its emergency response immediately after the earthquake. In El Salvador, its country office got in touch with government authorities to offer the Bank’s support. In Washington, a special mission was quickly arranged. Led by Miguel E. Martínez, manager of the IDB’s Regional Operations Department for Central America, Mexico, Panama, Belize, Haiti and the Dominican Republic, the mission team departed for San Salvador as soon as the international airport was reopened.

The mission, which included specialists in housing, infrastructure, energy, transportation, environmental management, disaster prevention and mitigation, education, and finance, visited areas hit by the quake and assessed El Salvador’s financial needs. Working with San Salvador-based specialists and government officials, IDB officials soon identified some $180 million of existing loans that could be redirected towards the reconstruction effort.

Another group of mission members worked exclusively on preparing a $20 million loan under the IDB’s emergency reconstruction facility, which was established in 1999 after an earthquake hit Colombia’s coffee-growing region. This emergency loan will help El Salvador fund its temporary housing program for low income people who lost their homes. Up to $15 million will be used to distribute some 44,000 housing kits and help municipalities deal with the removal and disposal of rubble. (See sidebar, "Hope made of wood, plastic and tin").

The emergency loan will also support another urgent task: the stabilization of hazardous hillsides. This is a crucial issue. Most of the people killed by the January 13 earthquake were victims of landslides. The main quake was followed by over 2,500 smaller reverberations or replicas, which further loosened the earth and rocks on perilous slopes. Come the rainy season, El Salvador could suffer massive mudslides. To try to head off that danger, some $4 million of the emergency loan will be used to design and carry out small stabilization projects in critical areas, establish early alert systems and organize communities in disaster prevention and mitigation and emergency response. Such training helped one Honduran municipality, La Masica, to survive Hurricane Mitch, the deadliest natural disaster in recent Central American history.

Coordinating a global response. At the Salvadoran government’s request, the IDB also organized a meeting of the international community to raise support for reconstruction. That event, held in Madrid on March 7, resulted in an unprecedented international commitment to help finance El Salvador’s reconstruction. (See press release at right).

At that meeting donors analyzed a detailed economic impact survey that is currently being carried out by the U.N. Commission on Latin America and the Caribbean (CEPAL), as well as a macroeconomic impact study by the World Bank and the International Monetary Fund. The Salvadoran delegation, made up of leaders from the public and private sectors and civil society, outlined projects of a national reconstruction program they are working on with assistance from the United Nations Development Programme. These presentations offered donors an opportunity to voice how they will support El Salvador’s efforts to recover from a catastrophe that hit the nation hardly two years after it suffered massive flooding and mudslides triggered by Hurricane Mitch.

The earthquake struck at a critical time for El Salvador. It happened less than two weeks after the government enacted its Monetary Integration Law, under which the U.S. dollar became legal tender alongside the colón currency, which now trades at a fixed exchange rate to the greenback. The legislation bars the Salvadoran central bank from using reserves to finance government spending. That restriction was questioned immediately after the earthquake by the opposition FMLN party, which argued that it would hamstring the emergency response and reconstruction efforts.

The disruption caused by the earthquake is likely to hurt El Salvador’s economic performance, which had been improving considerably over the past few years, to the point that its economy was recently recognized as the "freest" in Latin America by the Wall Street Journal and the Heritage Foundation, a U.S. think tank. Lower employment and economic activity could diminish government revenues, while rebuilding its damaged housing is likely to entail higher imports of construction materials.

Help from expatriates. Donations from friendly nations and long-term multilateral financing for reconstruction will probably help offset those pressures. El Salvador will also be counting on the remittances from millions of expatriates. The Central Reserve Bank estimates that Salvadorans living abroad could send home some $1.9 billion this year, up from a record $1.75 billion last year.

Nevertheless, there is still the question of what to do in places like La Joya del Tigre, a tiny hamlet in a coffee-growing area of Usulután, the worst-hit department of El Salvador. The earthquake caused 114 of the village’s 115 houses to crumble. Families like the Amaya-Hernándezes, who have 11 children, are now living under small tents pitched among the rubble of their adobe houses. "In this region there are no industries, no maquiladoras, no alternatives to working on the coffee plantations," said Armando René Amaya, a municipal official of the nearby town of Santiago de María. According to Amaya, a self-described former guerrilla, laborers make about $3 a day during the harvest and cultivation seasons and have little else to do the rest of the year. "A lot of people are thinking of moving to the United States," he added.

And come the rainy season, many of the surrounding hillsides, which were made all the more unstable by January’s earthquake, could trigger mudslides. Amaya reels off ideas about prevention measures that could be taken: early warning systems, local emergency committees, mitigation brigades, safety meeting points. "We should get ready for that. It’s sure to happen," he says.

Date posted: March 2001

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It was a two-story house...