‘Haiti reconstruction will cost $14 bn’

February 17th, 2010 - 12:02 pm ICT by IANS  

Washington, Feb 16 (IANS/EFE) The earthquake that devastated Haiti Jan 12 caused damages of between $8 billion and $14 billion, the Inter-American Development Bank (IDB) has said in a study. It estimates that the cost of rebuilding could reach close to $14 billion.
The study released Tuesday makes a preliminary analysis of the damages that the country suffered during the magnitude-7.0 temblor, using variables including the magnitude of the quake, number of dead, population and the per capita gross domestic product, and comparing it with other disasters that have occurred.

The scenario depicted by the IDB is that the earthquake caused the death or disappearance of between 200,000 and 250,000 people, close to the latest official estimate, which puts the number of deaths at 230,000 to date.

IDB economists Andrew Powell, Eduardo Cavallo and Oscar Becerra believe, after making a preliminary calculation of damages, that the minimum damage figure for this disaster is $8.1 billion, and that the final estimate could reach $13.9 billion.

From that point of view, the Haiti temblor was “vastly more destructive” than the Asian tsunami of 2004 and the hurricanes that hit Honduras in 1974 and 1998, with damages equivalent to more than 100 percent of Haiti’s annual GDP.

By comparison, in the tsunami there were 165,825 deaths accounted for, and damages of nearly $5.2 billion, or 2 percent of Indonesia’s GDP.

The IDB considers that the amount of damages in Haiti will require unprecedented coordination among aid donors.

It also says that to assure the efficient use of the money, some individual donors “may need to surrender the kind of control and conditionality they typically demand of projects they finance”.

“This will in turn require extraordinary mechanisms to ensure transparency and accountability,” the report says.

The IDB says that countries hit by disasters on this scale suffer economic contractions that can go on for decades.

In some of those countries, and despite floods of international aid, the per capita GDP tends to be 30 percent lower 10 years after the disaster.

“Of course this does not necessarily mean that aid does not work, perhaps the negative growth effect would have been even worse if aid had not increased,” the document stresses. “However, this does underline the challenge ahead for Haiti and for the international community attempting to support the country.”

–IANS/EFE

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