Economic losses mount as Venezuela earthquake death toll grows
Initial forecasts suggest damage could cost as much as 7 percent of the South American nation’s GDP. The series of powerful earthquakes that struck Venezuela
Initial forecasts suggest damage could cost as much as 7 percent of the South American nation’s GDP. The series of powerful earthquakes that struck Venezuela on Wednesday could cause economic losses equal to as much as 7 percent of the country’s gross domestic product (GDP), according to preliminary estimates from the United States Geological Survey. Initial assessments released on Thursday estimate that the damage could amount to between 1 and 7 percent of Venezuela’s $111bn GDP after twin earthquakes measuring 7.2 and 7.5 struck about 160 kilometres (100 miles) west of the capital, Caracas, on Wednesday afternoon, leaving at least 188 dead. Interim President Delcy Rodriguez has said that there will be a $200m fund from the International Monetary Fund that will be used to help rebuild infrastructure, hospitals and housing. “Significant reconstruction will likely be necessary, and this will likely require foreign support, including from the US, regional actors, and international financial institutions. The government appears to have moved quickly to announce a reconstruction fund with support from the IMF [International Monetary Fund],” Rachel Ziemba, economist and senior adjunct fellow at the Center for a New American Security, told Al Jazeera. “Other adjustments to the sanctions regime may be necessary to facilitate remittances, capital flows, and greater flexibility for imported material.” The US is sending resources to assess the damage and provide aid.
Secretary of State Marco Rubio said that the US has deployed rescue operations, and it should have a better understanding of what is needed in the next 48 hours. “We will have a whole government response,” Rubio said on Thursday to reporters in Bahrain amid logistical challenges as Simon Bolivar international airport, the country’s main airport, remains closed. Experts are watching closely how the US response will impact diplomatic ties. “I think this could be an opportunity, perhaps a catalyst, to compel or propel the relationship to develop in a positive economic direction,” John Deal, managing director of capital markets at the Post Oak Group investment bank, told Al Jazeera. “The administration has been very interested in securing oil and gas assets, and it doesn’t appear that Venezuela’s oil infrastructure was significantly damaged. Meanwhile, the country has sustained massive damage in the most psychologically sensitive location in Venezuela: its capital city,” Deal said. The United Nations has also “fully mobilised” humanitarian efforts, the group’s humanitarian chief said, and Switzerland has sent 18 tonnes of rescue equipment to help elevate pressure on local authorities. Al Jazeera’s Noris Soto reported from Caracas that private companies have been asked to help remove rubble. The challenges for aid come amid an already sensitive economic situation.
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