Crossroads (Toward Philippine economic and social progress)
Philippine Star, 13 November 2013


Natural disasters hit the country with regularity. Our defense against the brute force of physical laws is often inadequate even if we prepare for them.

Brute force of Yolanda/Haiyan. Modern weather forecasting used by CNN combined satellite imagery with graphics showing the blazing speed of super-typhoon Yolanda (internationally code-named Haiyan) as the eye crossed Central Visayas. Local reporting on this score suffered in comparison although it conveyed the message of a large event.

Reports on the power of the super-typhoon varied, but they were all so far above the strength of the normal typhoons that visit us yearly. The wire services gave the strength of the typhoon at 314 kph at some phase of it. But as it barreled past the islands, it packed winds of 235 kph that gusted up to 275 kph.

Yet an experienced meteorology professor at the Florida International University said that the heavy force of the typhoon avoided accurate measurements.

Assessing the damage. Beyond the toll in human lives, the economic damage of this disaster cannot yet be fathomed fully.

Though we are used to frequent disasters as a country, this one brought in images of apocalyptic proportions. The damage in Tacloban, the worst hit center of population, looked like a shamble of collapsed buildings and houses reduced to rubble and broken lumber and debris.

Human settlements are typically found on the edge of islands where the coastal roads kiss the shores. We can imagine how the searing force of the wind followed by storm surges overwhelmed these island communities.

Local industry and commerce were adversely affected. The destruction and disruption of normal industry and commerce aggravated the human dimension of the moment as the supplies of food, medicines and other necessities became scarce. This threatened the health and well being of survivors who are now without food, shelter and other assets.

Extreme scarcity of these in the immediate circumstances brought a measure of social disequilibrium and despair to a ravaged population seeking means of survival beyond the terrible catastrophe that they experienced.

The typhoon wrought great havoc to agriculture, including fishing. Across the islands, this matter threatens the year’s supply of food for the country. Panay Island is a rice producer and so is Mindoro. Coastal fisheries and acquaculture are major sources of fish and other food.

Panay and Negros islands are sugar producers. Samar and Leyte are big coconut producers. The major islands, including Cebu, are a key source of supply for mangoes and other fruits. Where the tree stands are decimated or their root systems affected, damage to harvests could be extended over a long period. Even trees and plantations do not recover easily when they get wounded.

Across the various Visayan islands, many households depend also on the raising of livestock and poultry. These are very vulnerable to the disaster. Fishing – whether coastal, inland or interisland – is a common source of livelihood.

The damage to coastal and aquatic fisheries is likely to be substantial as these activities were battered badly by the typhoon. Private tourism facilities that have been put up in recent years are likely to have suffered a huge setback.

Extensive economic damage means costly rehabilitation and reinvestment. All the Central Visayan islands have been hit hard – Samar, Leyte, Cebu, Negros, and Palawan. Bohol island, just recently badly ruined by the 7.2 Richter scale earthquake, is once again further damaged. We have yet to know more also about the many small but densely populated islands that typhoon Yolanda passed in this part of the country.

The poor and disasters. Incidentally, the poor bear the worst brunt of these natural disasters. The poor are defenseless compared with those who have income and wealth.

The poor suffer more for the loss of their only possessions. The destruction of shelter and other assets represents a serious blow for those who built them slowly over the years. Those with makeshift housing will be exposed to the elements longer even as they rebuild their shelter.

Some of the poor could be wiped out and sink into deeper poverty as they lose their housing, their limited ownership of private property and even their livelihoods. Thus, the ranks of the poor in the affected areas have swollen. The job of the government of conquering poverty has just become even more difficult to deliver.

What happens to economic growth? The foremost question in people’s minds after a major disaster is what happens to the economy in the large? Will it reduce the growth rate of the economy? Will it mean a poorer economic performance?

It depends. The super-typhoon has wrought enormous destruction, but much of it does not represent a setback in terms of major national infrastructure facilities. Apparently, the nation’s transport system – land, sea and air – although disrupted, is not badly damaged. This allows commerce to be restored.

Many supply disruptions in agriculture could be replaced by imports or by timely replanting, where it is possible to replant the crop in question. The rice and corn as well as vegetable agriculture damage could be partially recovered – but with a lag.

One threat of supply disturbances is immediate effect on prices that it feeds on. Timely imports and supply rebalancing within the country is required. All these implies however a loss in resources that the nation might pursue other paths of economic growth.

A determined government effort is needed to facilitate the proper response from farmers where replanting is possible – this is in terms of providing credit and technical support. The only problem is that the time of year could preclude replanting where there is insufficient irrigation or where irrigation facilities are available, the same have not been damaged. The rainy season is about to end.

Business losses – like the damage to vehicles, physical facilities, buildings, and so on – create a new demand for replacements and for construction activity and could even raise the overall investment level. Losses in physical facilities are recovered through new investments as well as through insurance coverage.

Hence, with so much destruction, the bright side of it is that it builds up a demand for new investments in favor of rehabilitation of facilities as well as improvement of existing facilities. Additional spending that comes with rehabilitation provides some inducement for economic expansion even though this is only in terms of recovering lost or damaged facilities.