El Salvador - GFDRR

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44 | El Salvador: Damage, Loss, and Needs Assesment TABLE 17. CLASSIFICATION OF AFFECTED BUSINESSES (Percentage of total) By Department Cuscatlán 2.6 La Libertad 17.6 La Paz 16.2 San Salvador 25.9 San Vicente 37.6 By Economic Sector Industry 12.1 Large-scale Commerce 5.3 Small-scale Commerce 39.7 Services 42.9 By Size Large Business 0.9 Medium Business 2.6 Small Business 17.6 Microbusiness 78.8 Source: Prepared by the authors based on the survey conducted by DIGESTYC. In the 14 municipalities surveyed, an impact equivalent to US$7.69 million is estimated, of which a total of US$3.88 million correspond to damages and the rest to losses. These values were extrapolated to all municipalities affected, assuming that the impact on the 14 municipalities surveyed represents 50% of the damages in the 66 municipalities affected. Thus, at national level, damages and losses are estimated to be equivalent to US$7.75 million and US$7.62 million, respectively. To evaluate the key factors that affect businesses due to the disaster, during the survey participants were asked to list the three most important factors. The results indicate that the drop in demand has been the most important factor, followed by road access problems due to blocked roads. Other factors mentioned include damages to the site, and problems with the provision of basic services. In line with the above, of the values of damages presented in Table 18 over 70% correspond to damages to buildings, while among losses the principal components are losses associated with reduced activity, representing 90% of the total. With regard to damages, 7.3% of businesses suffered damages to the construction of their establishment, 4.3% to other assets, and 4.6% to inventories. By type of activity, the service sector experienced the most damage (US$3.44 million); San Salvador was the municipality most affected. This result reflects damages of nearly US$2 million reported in buildings of the service sector in said department. In turn, retail busi-
II. POPULATION AND AFFECTED AREAS | 45 nesses experienced damages totaling US$271,500; La Paz and San Salvador were the departments most affected. In La Paz, nearly half of damages in the small business sector were caused by damages to inventory. In the Department of San Salvador, most damages occurred in commercial sites. With regard to manufacturing, over three-quarters of damages correspond to US$108,450 in damages to buildings in the Department of San Salvador. Finally, of the US$20,000 in damages experienced by the wholesalers, nearly US$14,500 correspond to equipment damages in the Department of La Paz. Ninety percent (US$3.43 million) of losses are due to the foreseen reduction in economic activity, which is expected to return to normal within about three months. It is worth noting that one third of total losses correspond to the reduction in retail activity in the Department of San Vicente, estimated at US$1.28 million. In the Department of San Salvador, losses due to the reduction in retail activity are estimated at around a quarter-million US dollars. Most losses in the service sector are also due the reduction in activity, also concentrated in the Department of San Vicente, although in the Departments of La Libertad, La Paz and San Salvador estimated losses due to the reduction in activity total US$470,000. In turn, wholesalers’ losses total US$533,900, of which 57% corresponds to the reduction in activity in the Department of San Vicente and 34% to the reduction in activity in the Department of La Libertad. Finally, 60% of losses in the manufacturing sector correspond to the foreseen reduction in activity in the Department of San Salvador. Reflecting the micro-business profile, of those businesses affected only 37% have access to financing and less than 5% of the affected businesses were insured at the time of the disaster. Of those businesses with access to financing, approximately half have faced problems in making pending loan payments due to the disaster. With regard to difficulties in marketing products and services, most businesses facing such difficulties are those with less demand. Based on the above, it may be concluded that the disaster worsened the already precarious situation faced by micro- and small businesses. This situation is characterized by strong vulnerability to demand fluctuations, combined with problems of access to financial mechanisms that allow them on the one hand to soften the effect of such fluctuations, and on the other hand to finance an escalation that allows them to move up on the value chain and diversify their geographic base. Besides the negative effects described above, an estimate has been made of the additional losses that the agroindustrial and commercial sectors will experience due to reduced food production in the agricultural and livestock sector as a result of the disaster. The lost value of the processing and sale of food products was estimated on the basis of losses in primary production, taking into account the volumes that producers retain for their own consumption. Thus, the unit prices of products affected in this manner at producer, wholesale and retail levels were used as a comparison. These additional losses, estimated at US$14.9 million for agroindustry and US$9.5 million for commerce, would occur in the first four months of 2010 because they stem from production in December 2009. Thus, the summary of damages to assets and of production losses in these sectors totals around US$39.9 million, as detailed in the following table:
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Page 5 and 6: | iii ACKNOWLEDGEMENTS We wish to e
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Page 9 and 10: | 1 PRESENTATION At the request of
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AUSTRALIA BELGIUM BRAZIL CANADA DEN
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El Salvador - GFDRR

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