Understanding and Coping with Natural Disasters: El Niņo in Latin America and the Caribbean
The economies of some Latin American countries were pummeled by the most recent El Niño event; costs in terms of poverty, growth, and natural resource degradation were very high, and in some instances partially avoidable. Policymakers and international lending institutions are scrambling now on two interrelated fronts. First, action is needed to get these economies back on track, taking care first to lift out of poverty those who suffered most from El Niño 1997/98. Second, wherever possible, investments are needed to reduce or even avoid the losses associated with future El Niño events, and perhaps other natural disasters, too. But time, resources and absorptive capacity are limited, so priorities must be established. But how? To set priorities for action and investments, a better understanding of how El Niño-type events affect the poor, and how these effects might be undone, is needed. Past efforts to quantify the impacts of El Niño have been inadequate for these tasks: stocks of assets and flows of products have been confused; valuations of these have not been systematic; and quantification efforts have never focused on a complete set of assets held (and lost) by the rural poor. This paper addresses these issues by setting out a conceptual framework for assessing the impact of natural disasters in general on the asset portfolios of rural households and communities, paying special attention to El Niño events. Similarities between El Niño shocks and those posed by seasonality and drought-induced famines are also examined. Implications for policy and IDB lending are explored.
Last updated: 04/26/07
