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Hurricane season in the Caribbean causes more than US$2.2 billion in losses

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The devastating effect of hurricanes Ivan and Jeanne, which hit the Caribbean in September and October 2004, caused substantial damage to the economies of several countries. According to a preliminary evaluation by the Economic Commission for Latin America and the Caribbean (ECLAC), direct and indirect losses from these natural disasters have reached more than US$2.2 billion in four countries: the Bahamas, Grenada, Jamaica and the Dominican Republic, while damage to Haiti and the Cayman Islands are still under study.

According to the ECLAC specialists in charge of this evaluation, the extraordinarily active 2004 hurricane system in the Caribbean has caused enormous damage, particularly to this region's island nations and States, as well as some sectors of neighbouring countries, the US state of Florida and Mexico's Cozumel Island. The worst human and socio-economic losses occurred in the least developed smaller countries, among them Haiti and Grenada, although other environmentally fragile countries (the Bahamas and the Cayman Islands) and indebted economies (Jamaica and the Dominican Republic) were also seriously affected.

Hurricane Impacts in the Bahamas, Grenada, Jamaica and the Dominican Republic

The Bahamas, an ecologically fragile archipelago whose largest part of the territory is its patrimonial sea, suffered the double and consecutive assault of hurricanes Frances and Jeanne. Their combined effect caused direct and indirect damages and economic losses worth more than US$550 million, that is, more than 10% of the previous year's current Gross Domestic Product (GDP). This has meant that an economy expected to grow almost 3% thanks to rising tourist activity and new investment in this activity and its free trade zone will see its economic activity fall 1.7% in 2004.

While the damage to housing and roads was serious, productive sectors were the most affected. Because of this, the country will need international cooperation in the coming months and has applied to the Inter-American Development Bank (IDB) emergency facility.

Meanwhile, on the island of Grenada the economic effects of Hurricane Ivan will be felt for many years. According to estimates, 89% of the total housing stock of the country was destroyed. Grenada's economic growth in 2004 is forecast to plunge six percentage points, ending the years with a GDP of -1.4%, a situation that is expected to persist for several periods (see report on ECLAC website).

Among the activities most affected are tourism and the production of traditional crops. Total hurricane damage in Grenada is almost US$889 million, more than twice the present value of last year's GDP. Eighty nine percent of this amount corresponds to direct damages, while the remaining 11% is from indirect damage (that is, its effects on domestic output of goods and services).

In Jamaica, Hurricane Ivan caused some US$575 million in damage, about 8% of GDP. Sixty two percent arose from direct damage to physical assets, while the remaining 38% consisted of indirect losses from the decline in economic activity expected for 2004 and the next three years.

This disaster will reverse Jamaica's recovery, begun in 2002: before the hurricane, 2004 was to be its third year straight of growth, estimated at 2.6%. Now, however, growth will probably reach only 1.9%.

Hurricane Jeanne's impact on the Dominican Republic left damages of US$270 million, according to a preliminary estimate from ECLAC, equivalent to 1.7% of GDP in 2003. Fifty five percent arose from direct losses, especially in assets and agricultural production, while the remaining 45% took the form of indirect losses to several sectors, increased operating costs or reduced income in services such as water, electricity, transportation and tourism.

Productive sectors were the most affected (60% of total damage), while the impact on infrastructure accounted for 33% and social sectors just 6% of the total.

If the other disasters, such as mudslides and torrential rainfall in November 2003 and May 2004, which have lashed the Dominican Republic in the past 12 months are also considered, total damage to this country rises to over US$320 million, of which US$125 million is in the agricultural sector.

Haiti and the Cayman Islands

Last October ECLAC started preparations to assist the interim government in Haiti with an evaluation of damage from Hurricane Jeanne. Although the final evaluation remains pending, the consequences in the north and northwest were disastrous, especially in the country's third largest city, Gonaives.

Meanwhile, on the Cayman Islands Hurricane Ivan primarily damaged the tourism sector and its social, housing and communications infrastructure. An ECLAC expert evaluation mission, with support from the United Nations Development Programme (UNDP), will be sent in the days to come.

For over 30 years, ECLAC has developed an integrated methodology for evaluating the socio-economic and environmental impacts of disasters caused by extreme natural events. Because it uses objective procedures to evaluate the damages and losses, this has become a standard instrument for the governments of Latin America and the Caribbean, proving to be an essential part of any strategy for the country's recovery, beyond the initial emergency phase.

"To intensify cooperation to reduce the number and effects of natural and man-made disasters" is one of the United Nations' Millennium Goals. This is one of the eight goals established by 189 chiefs of state at the Millennium Summit, held September 2000, at UN headquarters in New York.

The complete report evaluating the disaster in Grenada is available on the ECLAC website following the link.

For more information on the other countries evaluated, please contact Ricardo Zapata, with ECLAC's Subregional office in Mexico.
E-mail:; Tel: (52 55) 5263-9600.