Tag Archives: chile

Paying for disaster

Relief workers in Concepcion, Chile. Credit: Flickr/Globovision

Relief workers in Concepcion, Chile. Credit: Flickr/Globovision

Chile and Haiti suffered similar massive earthquakes, but the aftermath and impact of the disasters couldn’t be more different.

Chile’s much more economically developed than Haiti and has made huge progress over the past 20 years, which partially contributed to limiting the country’s death toll after the earthquake. So recovery, as Marketplace’s Tess Vigeland reports, will be focused (after human relief) on not losing the economic gains in areas like natural resource developments and infrastructure improvements. She spoke with Kevin Casas-Zamora, of the Brookings Institution:

Vigeland: You mentioned that there’s been a lot of economic growth in Chile. How much of that do you know went into infrastructure that perhaps contributed to the death toll not being greater?

Casas-Zamora: I think why the death toll was as low as it has been given the magnitude of the tragedy, it ultimately has to do with development in general. The glaring comparison between Chile and Haiti showcases very well why development matters. And it matters because it saves hundreds of thousands of lives.

Vigeland: What do you think the rest of the world, other governments, are taking away from how Chile has handled this crisis thus far?

Casas-Zamora: My sense is that the most remarkable aspect of all this is that it comes in the wake of the earthquake in Haiti. And the contrast couldn’t be greater. Really, in Chile what we’re witnessing is a state that works, whereas in Haiti the most glaring absence in the immediate aftermath of the earthquake was of a state at all. I mean it was sort of a phantom state. Whereas in the case of Chile, you can definitely see what a difference a functioning state makes when a disaster such as this one strikes.

The effect of the earthquake on Chile’s natural resources business is a major concern. Nightly Business Report’s Terri Cullen reports:

The location of the disaster can inflate commodities prices as well. For example, Chile is the world’s largest copper producer. The quake briefly sent the price of copper soaring to a seven-week high, before settling back on word the country’s biggest mines are undamaged. Oil prices also rose after Chile’s government said the quake disrupted oil production in the country, so it would need to import more fuel.

The threat of escalating inflation and the loss of human productivity will no doubt hamper economic growth in Chile and Haiti in the months, and perhaps years, to come. But the rebuilding and recovery effort could potentially wind up helping the economy in the long run.

Haiti’s economic status isn’t the only reason the quake there was so much more devastating than Chile’s. Other factors, including a direct hit to the capital city, and that Haiti hasn’t been an earthquake-prone area, also contributed to a greater impact in the Caribbean nation.

But it’s not a contest. Both countries have much rebuilding to do and “donor fatigue” is a real issue. The Christian Science Monitor compares the giving to both countries so far. After the 2004 Asian tsunami, NPR published this guide to giving wisely and advice how citizens can assist both ongoing causes and the cause-du-jour.