Crises and Disasters: Measurements and Mitigation of their Human Costs

Macroeconomic crises and natural disasters are a recurrent problem in Latin America, and are strongly correlated with increases in poverty in the region. In the last two decades there were more than 40 incidences were GDP per capita fell more than 4 percent in one year and there were as many major natural disasters. The 1995 Mexican Peso crisis and the Asian Financial Crisis of 1997-98, which affected several countries in our region, Hurricane Mitch and the events associated with El Niño are just some recent examples.

Poor people are particularly affected by macroeconomic crises and natural disasters. Because of the lack of access to insurance mechanisms, low-income families will adjust to an income downturn by drawing on scarce savings, selling assets, lowering consumption, and reducing their demands from health and education services. These strategies may have an irreversible impact on the asset base and productive capacity of households. The corrosion of the permanent income of the most vulnerable generates a vicious circle where crises lead to greater poverty and greater poverty engenders more vulnerability to prospective crises.

The IDB and IFPRI hosted the international conference Crises and Disasters: Measurement and Mitigation of Their Human Costs, that was held in November 13 and 14 2001 in Washington D.C. at IDB Headquarters. The conference discussed the impact of crises and disasters on poverty in different regions of the world. The main objectives of the conference are to build and disseminate knowledge on the magnitude and distribution of impacts of economy-wide shocks on various dimensions of well-being (income, consumption and access to services) and the institutional factors that can contribute to improve the prevention and management of economy-wide shocks.