Counting the economic cost of Haiyan | Asia Pacific

Counting the economic cost of Haiyan

Counting the economic cost of Haiyan

Updated 15 November 2013, 14:45 AEDT

While the human toll is still being assessed in the wake of Haiyan, it's clear the economic cost of the super typhoon will also be significant.

Philippines finance secretary Cesar Purisima says it will be years before the damage is repaired.

Some estimates put the non-insured impact of the typhoon as high as 12-billion dollars.

Nevertheless, most economists agree that ultimately that the long-term impact is manageable.

Presenter: Sen Lam

Speaker: Cesar Purisima, Philippines finance secretary; Dr Steven Rood, country representative for the Philippines, Asia Foundation

ROOD: I'm afraid that the estimates for the amount of damage very extremely. I've seen estimates anywhere from 8 to 80 billion dollars, so until we get a much clearer perspective from areas that haven't really been reached and inventory, we're going to have to just continue to pour in relief in the hope that we'll have enough.
LAM: What about damage to infrastructure, such as roads, airports, telecommunications. How costly will that be for the Philippine economy, do you think?
ROOD: Well, there was damage to the airports that were close to the sea, there was damage by the storm surge. Roads are being cleared. They're not so much damaged as clogged with debris and so that should be fairly good. Telecommunications was definitely a problem, but that's mostly back up, as the privatised telecommunication firms really sprang into action.
Overall, if you look at these kind of incidents around the world, it looks like about a one per cent hit on the growth of the gross national product, growth of GDP, and so instead of perhaps 7 per cent growth, the Philippines might be reduced down to 6 per cent growth, which by world standards is still pretty good, but is slower than hoped.
After a year or two, however, the economies tend to return to their long term trajectory as investments in reconstruction begin to pick the economy back up.
LAM: I guess it's also especially sad, because the Philippine economy was just emerging from the doldrums and slowly recovering. But you're saying that the rate of growth will not be drastically affected?
ROOD: Ah yes, but overall, for the nationwide, of course, it will devastate those areas. The estimates are 8 to 10 per cent decline, which can be devastating for a poorer area, because it spared the Metro Manila, which is the general economic hub, will actually increase the economic inequality among areas in the Philippines, where the capital city is much richer than these outlying areas.
LAM: Indeed. the capital, Manila, was relatively unscathed by the typhoon. So do you say then that that's a bright spot in all of this, that because Manila is a generator of wealth, that at least Manila was spared?
ROOD: Both that and the fact that is a centre of, logistic centre for relief efforts. It was functioning perfectly. So in that sense, the problem isn't here and the amount of relief, the problem is down there and the distribution of relief.
LAM: What about on a local community level? How are typhoon survivors expected to cope in the coming months if they're lost their homes, some of them their livelihoods?
ROOD: Well, there's actually two sets of survivors in this sense. For many of the people, this was just another typhoon, a strong typhoon, but just one that they knew how to deal with and so those communities that are not directly on the sea shore, that were not affected by the sea surge. They should be able to reconstruct themselves more or less as they normally do, after, we get about two dozen typhoons in this country a year.
However, the storm surge was sort of unprecedented, people didn't know what it meant when it was predicted. They didn't realise that it was like a tsunami and those low lying coastal areas, which are totally wiped out, they really will have the problem you elude to of a community trying to rebuild itself. So there will need to be food for work, there will need to be desalinisation of rice fields, there will need to be considerable government efforts for two or three years before they'll be able to get back on their feet again. 

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