Updated 2 weeks, 6 days ago

Latin America can't stand the costs of Mother Nature

Latin America is suffering the effects of a relentless natural phenomenon. The continent has had to deal with continuous rains, which have led to floods and mudslides. And, sadly, these have affected areas that were already in need. While organizations in Peru and Colombia are counting the victims, governments are met with the need to fix houses, repair infrastructure, aid medical needs and, most important, plan the future of communities that, right now, are helpless. The disasters have left both countries with the job of rebuilding shattered towns and with the hope of leaving them in a better shape than before the floods.

However, we must realize that the costs that arose from these disasters were unexpected and could have serious economic consequences for both countries. In the case of Peru, El Niño has, so far, a cost of US$3,1 billion in damages –according to the Peruvian consulting firm Macroconsult–. The case for Colombia it’s still uncertain but the government has already directed an emergency fund of US$13,9 million to take care of immediate needs. The damages in Peru –which could increase from the US$3,1 billion to US$15 billion, according to Jorge Nieto, the Minister of Defense– indicate that the situation in the country is structural and it goes well beyond a short crisis. Therefore, it will have a bigger impact on the country’s economy. The analysis from Macroconsult also showed that Peru’s GDP growth projection would be forced to decrease from a 3,5% to a 2,9%. This hit in growth would fall, mainly, on the agriculture and mining sectors.

In Colombia, on the other hand, the tragedy has only affected one town and the organizations are already taking quick actions to diminish the effects. Aside from the fund of US$13,9 million, the Inter-American Development Bank opened a fund of US$200,000. So far, the costs revealed by the President Juan Manuel Santos account for US$17,5 million to build a hospital, US$4,9 million to rebuild two bridges and US$1 million to improve three more. The picture, however grim, is less alarming than the one in Peru.

However, if the territorial authorities don’t take precautionary measures, the disaster could escalate to other vulnerable areas. According to a recent report from the National University –one of the most distinguished educational institutions in Colombia–, there are another 385 municipalities in danger. These municipalities are, as Mocoa is, next to riverbanks and, hence, in clear danger of flooding if the rains continue. The government needs to start paying attention to each of these municipalities or the costs could multiply by 400.