The Economic Scale of Venezuela’s Earthquake Recovery

• Three weeks after twin earthquakes in Venezuela, 5,000 people have died and 18,000 are displaced.
• Estimates for reconstruction range from USD 6.7 billion to USD 37 billion depending on the source.
• Severe economic fragility, including massive external debt and hyperinflation, complicates recovery efforts.

Disaster Assessment Methodology

• The ECLAC framework, used by the World Bank and IDB, categorizes impacts into:
  • Damage: Physical asset destruction at replacement cost.
  • Losses: Economic output/services lost until recovery.
  • Additional Costs: Extraordinary expenditures for humanitarian and medical aid.
• Reconstruction needs include financing for public policy, infrastructure, and household support.

Economic Impact Estimates

• Official government figures report 2,000 damaged structures, while NASA satellite data suggests closer to 30,000.
• UNDP/RAPIDA: Estimated direct physical losses at USD 6.7 billion (approx. 6% of GDP).
• Economist Asdrúbal Oliveros: Suggests direct losses of USD 7–9 billion, with total recovery costs reaching USD 12–15 billion.
• UNDRR: Provides a higher estimate of USD 37 billion in direct physical damage, accounting for 40% of GDP.

Localized Consequences and Infrastructure

• Impact is concentrated in the state of La Guaira and parts of Caracas.
• Critical disruption of the Simón Bolívar International Airport in Maiquetía necessitated flight rerouting to Valencia and Barcelona.
• Major affected sectors include tourism, housing, commerce, logistics, and transportation.

Financial Challenges

• The country faces extreme constraints:
  • 75% contraction in economic output and historic hyperinflation.
  • Limited domestic banking and insurance capacity.
  • Default on approximately USD 240 billion in external debt since 2017, barring access to capital markets.
• Proposed funding initiatives remain far below required amounts:
  • A USD 200 million reconstruction fund from IMF assets.
  • CAF-led mobilization of public and international resources.