Vanuatu after Cyclone Pam: the economic impact

What is likely to be the economic impact of Cyclone Pam in the medium run (the next three to five years)? There has been little written about the economic impact of Cyclone Pam to date. Despite the current lack of data, experience with disasters in the Pacific and other parts of the world can provide us with some guidance on what to expect. Estimates of the damage to infrastructure, housing etc. caused by Cyclone Pam will probably be available by the end of the month. It is clear that such damage will be significant. To illustrate, Cyclone Evan in 2012 was estimated to have caused damage equal to approximately 30 percent of Samoa’s Gross Domestic Product (GDP). We can expect similar, and probably more significant, damage to have resulted from Cyclone Pam.

Cyclone Pam is likely to depress future economic output. The immediate costs to agriculture and tourism – the two most important economic sectors in Vanuatu – are already apparent. Crops used for both cash income and household consumption have been devastated. Although some crops will recover quickly, other crop plants such as kava (which comprised 10 percent of Vanuatu’s merchandise exports in 2014) can take several years to mature. The impact on agricultural producers will therefore be felt for some time.

http://devpolicy.org/vanuatu-after-cyclone-pam-the-economic-impact-2015…