El Salvador - GFDRR
El Salvador - GFDRR
El Salvador - GFDRR
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II. POPULATION AND AFFECTED AREAS | 45<br />
nesses experienced damages totaling US$271,500; La Paz and San <strong>Salvador</strong> were the departments most affected.<br />
In La Paz, nearly half of damages in the small business sector were caused by damages to inventory.<br />
In the Department of San <strong>Salvador</strong>, most damages occurred in commercial sites. With regard to<br />
manufacturing, over three-quarters of damages correspond to US$108,450 in damages to buildings in the<br />
Department of San <strong>Salvador</strong>. Finally, of the US$20,000 in damages experienced by the wholesalers, nearly<br />
US$14,500 correspond to equipment damages in the Department of La Paz.<br />
Ninety percent (US$3.43 million) of losses are due to the foreseen reduction in economic activity,<br />
which is expected to return to normal within about three months. It is worth noting that one third of<br />
total losses correspond to the reduction in retail activity in the Department of San Vicente, estimated at<br />
US$1.28 million. In the Department of San <strong>Salvador</strong>, losses due to the reduction in retail activity are estimated<br />
at around a quarter-million US dollars. Most losses in the service sector are also due the reduction in<br />
activity, also concentrated in the Department of San Vicente, although in the Departments of La Libertad,<br />
La Paz and San <strong>Salvador</strong> estimated losses due to the reduction in activity total US$470,000.<br />
In turn, wholesalers’ losses total US$533,900, of which 57% corresponds to the reduction in activity<br />
in the Department of San Vicente and 34% to the reduction in activity in the Department of La Libertad.<br />
Finally, 60% of losses in the manufacturing sector correspond to the foreseen reduction in activity in the<br />
Department of San <strong>Salvador</strong>.<br />
Reflecting the micro-business profile, of those businesses affected only 37% have access to financing<br />
and less than 5% of the affected businesses were insured at the time of the disaster. Of those businesses<br />
with access to financing, approximately half have faced problems in making pending loan payments due<br />
to the disaster. With regard to difficulties in marketing products and services, most businesses facing such<br />
difficulties are those with less demand.<br />
Based on the above, it may be concluded that the disaster worsened the already precarious situation<br />
faced by micro- and small businesses. This situation is characterized by strong vulnerability to demand<br />
fluctuations, combined with problems of access to financial mechanisms that allow them on the one hand<br />
to soften the effect of such fluctuations, and on the other hand to finance an escalation that allows them<br />
to move up on the value chain and diversify their geographic base.<br />
Besides the negative effects described above, an estimate has been made of the additional losses<br />
that the agroindustrial and commercial sectors will experience due to reduced food production in the agricultural<br />
and livestock sector as a result of the disaster. The lost value of the processing and sale of food<br />
products was estimated on the basis of losses in primary production, taking into account the volumes that<br />
producers retain for their own consumption. Thus, the unit prices of products affected in this manner at<br />
producer, wholesale and retail levels were used as a comparison. These additional losses, estimated at<br />
US$14.9 million for agroindustry and US$9.5 million for commerce, would occur in the first four months<br />
of 2010 because they stem from production in December 2009.<br />
Thus, the summary of damages to assets and of production losses in these sectors totals around<br />
US$39.9 million, as detailed in the following table: