Damage assessment How much will it cost to rebuild after

Damage assessment: How much will it cost to rebuild after the earthquakes in Turkey and Syria?

The effects of the earthquakes recorded in Turkey and Syria are dramatic and are among the most devastating disasters in the history of the region. Its effects have caused more than 35,000 deaths and 85,000 injuries, and the number continues to rise. One of the questions that arises after a few days is: what is the estimated cost of the earthquake, taking into account the destruction caused?

On the humanitarian front, many countries immediately dispatched rescue teams, specialized personnel and essential materials. 20 European Union countries have offered more than 30 rescue groups and Spain has mobilized its field hospital and START emergency response team. Major humanitarian organizations have launched emergency appeals for an early response and recovery, for example the International Federation of Red Cross and Red Crescent Societies have requested 200 million Swiss francs (almost 203 million euros) to respond adequately. And the calls for reconstruction are already getting louder. The World Bank has announced a $1.78 trillion (€1,686 million) fund for recovery and European Commission President Ursula von der Leyen and Swedish Prime Minister Ulf Kristersson have convened a donors’ conference to mobilize funds the international community. The question that arises is: how much money will it cost?

In Turkey, affected regions represent 9% of GDP, 15% of population, 15% of agricultural production, 9% of industry and between 6% and 8% of foreign trade.

To estimate the impact, the EU, the World Bank and the United Nations use an international method called “Post-Disaster Recovery Needs Assessment”, which makes it possible to determine the damage and economic costs to meet post-disaster recovery needs. This methodology is carried out jointly by the government, the affected community and a broad group of national and international stakeholders. There are many examples of this type of evaluation, such as the last earthquake in Haiti in 2021. Not only the numbers are interesting, but also the understanding of the multidimensional nature of the possible effects of such a catastrophe. This assessment categorizes the costs and impacts into seven different sectors, allowing the consequences of these disasters to be measured.

Costs and impacts in seven sectors

  • Social: This category estimates the costs associated with impacts on health, education, housing, culture, or nutrition. The damage to infrastructure and property in these fundamental social areas of society and the resulting human and economic effects are assessed. El Salvador in 2022 produced a very interesting specific guide to assessing housing, health and education recovery needs.
  • Infrastructure: Costs related to water and sanitation, community infrastructure, energy and electricity, transportation and telecommunications are estimated. In the affected areas, thousands of buildings were badly damaged, telephone lines were cut and there were power outages. This infrastructure is vital as it can result in indirect costs such as paralyzing the means of production, humanitarian access or economic activity in sectors such as tourism.
  • productive means: the effects on agriculture, livestock and fisheries, trade, industry and tourism are assessed. Although the earthquake in Turkey did not affect the main economic centers or tourist regions, it is critical to assess it, especially since many vulnerable families live in the affected regions of both countries, whose economic status is weak and whose livelihoods may be severely affected by the earthquake.
  • Macroeconomics: the impact on the budget deficit or trade balance will be crucial in the coming months and years. In Turkey, affected regions represent 9% of GDP, 15% of population, 15% of agricultural production, 9% of industry and between 6% and 8% of foreign trade. The visible effect on the GDP measure can be difficult to analyze because the losses are not directly included in the calculation, but the clean-up tasks add up.
  • Finances: It is also important to assess the impact on financial institutions, banks and non-banks. In such a situation, it is advisable to suspend operations on the stock exchange, as happened in Turkey after the financial market lost 16% (representing market capitalization losses of 32,648 million euros). In 2022, inflation in Turkey reached 86%, so many citizens decided to invest their savings in stocks to protect themselves from losing their money.
  • cross-cutting issues: Topics that can affect others collaterally are analyzed, such as governance, the environment or the differentiated influencing of gender aspects. For many analysts, the impact on governance or policy can make a difference. Political elections will be held in Turkey in May 2023 and managing the emergency will be key to their results. In Syria, control of the north of the country is shared between the government, Kurdish-led forces and other rebel groups. It will be important to analyze the potential impact on the fragility of this governance and whether it can trigger any kind of conflict.
  • Human development: economic impacts on human development and poverty are estimated. In Turkey, the 10 affected provinces are among the poorest, so their impact may be more severe as they are less resilient. It is even worse in Syria: Aleppo, one of the regions hardest hit by the earthquake, is also one of the regions hardest hit by the conflict. In addition, the freezing temperatures and torrential rain made rescue work difficult. The region is experiencing a crisis within a crisis.
  • It will be crucial to take all these aspects into account so that Turkish and Syrian society can recover as quickly as possible, especially in an inclusive way.

    Borja Santos He is a Humanitarian Affairs Expert and Associate Vice Dean of the IE School of Politics, Economics and Global Affairs.

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