El Salvador - GFDRR

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110 | El Salvador: Damage, Loss, and Needs Assesment iv) Evolution of key variables. Economic activity. The real sector of the economy was slightly affected by Hurricane Ida in November 2009. It is important to point out that the damages and losses affected both the stock of sectoral assets and the flows in the productive sectors and in infrastructure. The sectoral analysis showed that the most affected sectors were transportation, environment and agriculture, followed by water and sanitation, housing, industry, commerce, education, health and services. In the transportation sector, damages exceeded losses because the damaged infrastructure corresponds to roads of secondary importance with respect to their connectivity with the city of San Salvador and with the rest of the country’s departments. In the agricultural and livestock sector, losses are greater than damages, mainly due to the effect on future coffee, bean, corn and sugar cane crops. v) Prices, wages and employment. The inflation rate showed mild variations in the period following the hurricane due to temporary shortages in products mostly for domestic consumption. Because supply was reestablished in a timely manner, the temporary price variations were neither significant nor permanent. The temporary increase in unemployment rates in the affected zones was able to be offset by rehabilitation and reconstruction activities, and therefore no strong variations are expected. However, it should be noted that performance during the first quarter of the year already reflected a deterioration in the number of jobs generated in the economy, so the unemployment rate is likely to be around 8%. vi) Evolution of the external sector. The increase in imports will be offset in part by the increasing flow of family remittances and by a slight upswing in exports, which will generate a current account deficit equivalent to 2% of the GDP. Therefore, the expected effects of Ida will not be significant in the current account deficit, despite the small increase in imports, mainly by the imported component associated with agriculture. Here, a loss of exportable products with an approximate value of US$3.3 million is reported. As for the service sector and especially tourism, a rapid recovery is expected due to minor damages and a return to normalcy in reservations and room occupation rates immediately after the emergency. Finally, there could be a slight rise in regular transfers through family remittances and for reasons of solidarity, since this has been the case on other occasions. In terms of the capital and financial account, an increase may be expected due to increases in the flow of capital aimed at reconstruction activities. In turn, the financial account may reflect increases stemming from more grants from multilateral institutions. B. IMPACT OF THE DISASTER ON PERSONAL INCOME Although the disaster’s impact on macroeconomic performance shows that the previous trend in terms of product growth should not be affected, the fiscal deficit may increase slightly in the short term and the greater imports required would be balanced by an increase in family remittances from overseas. At personal level, however, and at least for the next twelve months, income would experience a temporary
IV. ECONOMIC IMPACT | 111 deterioration that would need to be propped up in order to avoid malnutrition as well as a possible increase in violence and other associated problems. Using as a basis the relationship existing between the labor force of each sector of economic activity and gross production under normal operating conditions of the economy, temporary losses of workdays resulting from the production losses estimated in Chapter 2 were assessed. For each sector, this made it possible to estimate both the years/person that were lost and the income not earned by those working in these sectors. In addition, using the average salaries of each sector, paid to men and women, total income losses experienced by the affected persons were estimated (see Table 44). The previous estimates indicate that men and women have lost an amount of income equivalent to US$18.4 million, which represent the value that programs to generate personal income should replace, referring to the period between November of this year and May or June of 2010. The highest income losses occur in the agricultural and livestock sector, followed by the commercial and service sectors. In general, men lose the highest amount of income, compared to women; however, women lose more income in the commercial and service sectors. This is due to the existing ratio between the number of workers of each sex in the sectors analyzed (see again Table 44 and Graph 12). Item TABLE 44.ESTIMATE OF JOB AND PERSONAL INCOME LOSSES CAUSED BY THE DISASTER IN EL SALVADOR Agriculture, livestock and fishing Economic activity sectors Manufacturing Commerce and Services Number of workers 438,988 400,890 677,590 Men 391,377 201,454 271,590 Women 47,611 199,436 406,000 Average salaries, US$/year Men 1,722.5 3,422.3 3,859.7 Women 1,269.0 2,306.3 2,795.3 Job losses, years/person 6,132 315 2, 252 8,699 Men 5,467 158 902 Women 665 156 1,349 Estimated income losses (millions of US$) 10.26 0.90 7.26 18.42 Men 9.42 0.54 3.48 Women 0.84 0.36 3.77 Source: Estimates by assessment mission. Totals The analysis also makes it possible to identify the sectors in which people who lose income are currently working; it is thus feasible to focus the target population for the abovementioned programs (see Graph 12 once again).
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El Salvador Damage, Loss, and Needs
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| iii ACKNOWLEDGEMENTS We wish to e
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| 1 PRESENTATION At the request of
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El Salvador - GFDRR

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