Venezuela Earthquakes Could Have Caused $19.6 Billion in Damage, World Bank Says

The 24 June Venezuela earthquakes could have resulted in around $19.6 billion (€17.2bn) worth of direct physical damage, according to the World Bank Group.

This significant number underscores the country's need to invest in timely, resilient reconstruction for the economy to recover.

The findings were highlighted in a Global Rapid Damage Estimation (GRADE), carried out by the World Bank and published on Thursday.

The primary aim of the assessment is to provide the Venezuelan government and development partners with early insight into the scale of the rebuilding needed, and help outline the reconstruction and recovery efforts which need the most immediate attention to recover from the large-scale disaster.

"The earthquakes have disrupted lives, damaged critical infrastructure, and created new challenges for Venezuela's recovery," Susana Cordeiro Guerra, World Bank Vice President for Latin America and the Caribbean, said in a press release.

"Recovering effectively begins with reliable evidence. This assessment gives the Government of Venezuela and its partners an early objective foundation for recovery planning, and the World Bank Group is committed to supporting that effort every step of the way," Guerra added.

Majority of damage to residential buildings

The GRADE assessment estimated that 47% of the total damage was to residential buildings, with infrastructure accounting for 27%. Non-residential buildings made up 26% of the total damage.

La Guaira state and Distrito Capital bore the brunt of the damage, accounting for approximately half of the total impact.

The World Bank Group also conducted additional analysis of the possible macro- and socio-economic implications of the earthquake, as well as what recovery could entail.

This data revealed that the pace of reconstruction will be of paramount importance in shaping how well the Venezuelan economy and society recovers.

Given the current state of public and private investment, most of the reconstruction funds would likely need to be diverted away from other less critical investment projects.

In this situation, reconstruction is expected to take over 10 years, with considerable negative effects on economic activity.

On the other hand, by prioritising rapid reconstruction and assigning higher public and private investment for this purpose, the economic and social impact of the earthquake could be greatly mitigated.

How has the GRADE methodology estimated damage?

The GRADE methodology offers an independent and, most importantly, fast way of assessing direct physical damage after a significant disaster.

It uses satellite imagery, exposure data, remote sensing, and engineering models, with more detailed sector assessments where needed.

In the case of the Venezuela earthquakes, GRADE combined earthquake damage modelling, catastrophe risk modelling, validation and calibration, and an assessment of the capital stock value of different sectors and assets.

A mix of historical data and scientific data, such as ground motion, engineering assessments of structural vulnerability, information on the built environment and population, was also used, along with reported damage data from the government, community-based organisations, development partners, media, and social media.

The GRADE assessment for Venezuela also received financial support from the Government of Japan through the Program for Mainstreaming Disaster Risk Management in Developing Countries and the Global Facility for Disaster Reduction and Recovery (GFDRR).

Household vulnerability should also be considered when rebuilding

The GRADE assessment also highlighted that household vulnerability should be given particular consideration when embarking on rebuilding efforts.

This includes social factors such as age, income, housing quality, along with economic and environmental health, which can help determine a particular demographic’s vulnerability to disasters.

In this case, seven of the most affected states: Miranda, La Guaira, Distrito Capital, Carabobo, Yaracuy, Aragua and Falcón30 were home to around 11.5 million people, around 40% of the country’s population.

These seven states also held almost half of Venezuela’s exposed building and infrastructure stock, valued at around $657bn (€576.8bn).

Some of the social vulnerabilities seen in demographics across these states included female-headed households, single-parent households and households with elderly, disabled or ailing people.

As such, the GRADE assessment found that the restoration and maintenance of basic services such as water and electricity could be particularly beneficial to these communities during rebuilding. This is because service disruptions within vulnerable households can have outsized consequences, even when physical building damage is relatively low.

This lack of services could also deepen existing inequalities rather than affect households uniformly.

These insights could significantly help the Venezuelan government focus recovery efforts on high-priority areas in the coming months, to achieve progress as quickly as possible.

However, population size and limited institutional capacity remain major challenges to the pace and quality of response and recovery.