Measuring Disaster Risk

Economic losses caused by natural disasters in Latin America and

the Caribbean 1900-2009 (US$ million)
Over the past century, population growth, unplanned urbanization, overexploitation of natural resources and the effects of climate change
have dramatically increased the economic costs of natural disasters for Latin America and the Caribbean, underscoring the need for
countries to better manage these risks.

50000
45000

43,015
33,964

35000

34,327

30000
25000

19,747

20000

13,038

15000

5,690

10000
5000

9
00

9
19

20

80

00

-1

-2

98

9
96
-1
60
19

19

40

00

-1

-1

94

90

Source: EM-DAT,
Bureau of Labor
Statistics and IDB
Staff calculations

729

19

Estimated Cost in
2009 US$ million

40000

Note: Disasters considered are earthquakes, floods and storms. All U.S. dollars figures were inflation-adjusted using the U.S. Consumer Price
Index For All Urban Consumers, as reported by the Bureau of Labor Statistics. Latin American and Caribbean countries included in the calculations: Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala,
Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, Uruguay and Venezuela.

Disaster Deficit Index (2008)

For a natural disaster event that

can occur once every 100 years

7
6
5

1.94

1.53
0.29 0.13
0.1

Ch

a
in

ile

0.07 0.03

ge

Tr

Do

in

id

in

ad

an

Ar

liv

Bo

lo

Co

ag

ia

a
bi
m

aR

ica

ca

st
Co

Ja

Ec

ua

ai

do

a
al

em

ica

Gu

at

Pa

na

Pe

ru

ic

pu

Re

lv
Sa

El

bl

or
ad

gu

ra
ca

Ni

Ba

rb

ad

ur
nd

os

nt

0.32

ico

0.77 0.73
0.67

To
b

2.42 2.28

Ho

Source: IDB

2.8

ex

3.15 3.14

as

Index above 1 shows

economic costs That exceed
state financial capacity

The Disaster Deficit Index (DDI) shows potential economic losses countries can face and their governments financial capacity to address
such costs. It measures the states capacity to pay in order to recover from the economic losses if a catastrophic event the type that can
occur once every 50, 100 or 500 years were to happen in 2008. A DDI greater than 1.0 indicates economic losses would exceed the
states financial capacities (the greater the DDI, the greater the financial gap).

Local Disaster Index (2001-2005)

The Local Disaster Index (LDI) evaluates the social and environmental risks stemming from recurrent small-scale disasters, looking at
death tolls, numbers of affected people and damages to housing and crops. It measures a countrys propensity to suffer these types of
disasters and their cumulative impact on development. An index below 20 implies a high concentration of small disasters in a few local
areas. An indicator between 20 and 50 indicates a normal propensity and a number above 50 indicates that a majority of the areas of a
countrys territory suffer small disasters.

71

70

63

60

58

50

48

43

40

37

32

30

27

20
10

Ar

ia
liv

Co

ge

lo

Bo

nt

bi

in

r
Ec

ua

ex

do

ico

ru
Pe

ad
El

Co

Sa

st

lv

aR

m
na
Pa

Source: IDB

or

ica

Local Disaster Index

80

Prevalent Vulnerability Index (2007)

60

52

50

51

49

47

46

43

43

40

39

38

37

35

34

33

30

32

31
22

20
10

ge

nt

Ch

ile

a
in

ex

ic

bi

Ar

Co

Ec

lo

Pe

ru

r
do

ua

ia

liv

Bo

na

Pa

rb

ad

os

ca

in

id

ad

Ba

st
Co

an

an

Ri

e
liz

Be

go

To

ba

ic
bl

Re

pu

or

ad

lv

Sa

Tr

Do

in

ic

El

Gu

at

em

al

ca

Ja

ai

as

Ho

nd

ur

gu
ra
ca

Ni

Source: IDB

52

40

Prevalent Vulnerability Index

The Prevalent Vulnerability Index (PVI) gauges the fragility and exposure of human and economic activity in disaster-prone areas and the
social and human capacity to absorb the impacts of disasters. The three composite indicators that make up this index consider factors
such as demographic growth, population density, poverty and unemployment levels, soil degradation caused by human action, gender
balance, social expenditures and insurance of infrastructure and housing. An index of 20 or less indicates low levels of vulnerability while
an index between 20 and 40 indicates a medium level. An indicator between 40 and 80 shows high vulnerability.

Disaster Risk Management Index (2008)

50

45

45

43

41

41

38

37

34

35

33

29

30

27

27

26

25

24

23

23

20
15
10
5

go

ba
To

in

id

ad

an

El

Sa

lv

ad

or

ia
liv

Bo

do

ua

ru
Pe

Ec

ge

nt

in

a
al
Ar

at

em

ic
bl

Gu

Tr

Do

in

ic

an

Co

Re

pu

Ch

Ri

ile

ca

o
ic

st

ex
M

Pa

na

a
gu

ra

Ni

ca

ai

os
Ja

ad

Ba

rb

bi
m
lo

ca

Co

Source: IDB

45

40

Disaster Risk Management Index

The Risk Management Index (RMI) measures a countrys risk management performance. It combines several measures to evaluate the
capacity to identify and reduce risks, respond and recover from catastrophes as well as to provide financial protection and risk transfer. An
index below 50 is considered unsatisfactory; a number between 50 and 75 is considered safisfactory and an index above 75 is considered
outstanding.

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