UN study broken down

How badly did Hurricane Ivan damage the Cayman Islands? Answers from a report by the UN’s Economic Commission for Latin America and the Caribbean are grim.

Cayman’s damage from Ivan is greater than the total hurricane season damage this year to Grenada, Jamaica, the Dominican Republic and the Bahamas combined. The total amount of damage and loss is equivalent to almost two years of Cayman’s GDP. A per resident estimate stands at CI$75,700, the highest ever encountered by ECLAC.

On Tuesday, 7 December, ECLAC’s Ricardo Zapata Marti presented the report’s findings to Cabinet. That evening the Leader of Government Business, McKeeva Bush, went on Radio Cayman to share the news with the nation.

The report identifies impacts in three sectors: social, productive and infrastructure. The impacts are then classified in two ways; the report speaks first of damage, or the actual impact on physical assets; and second of loss, or the effects on future economic and social flows.

Preliminary highlights

The major findings of the report are:

• The total impact of the disaster on the Cayman Islands was CI$2.8 billion, more than this year’s damage to Grenada, Jamaica, the Dominican Republic and the Bahamas combined.

• The total amount of damage and loss is equivalent to about 183 per cent of Gross Domestic Product. This is almost two years’ worth of the total value of goods produced and services provided within these Islands.

• The amount of damage is estimated at $75,700 per person, the highest ever encountered by ECLAC.

• Over 80 per cent of the impact reflects damage to and destruction of assets. Housing suffered the largest impact. The remaining roughly 20 per cent of the impact is in the form of losses to future flows.

• Within the past 10 years, Cayman’s best year resulted in construction permits for about CI$400 million, or one-sixth of the direct damage of CI$2.8 billion.

The report also covers the impact on the country’s public finances, GDP, and consumer prices. The overall fiscal balance of Government was CI$24.3 million pre-Ivan. Now Government has an overall fiscal balance of negative CI$38.7 million. This is a change of minus CI$63 million in Government’s financial position.


The ECLAC study also looked at macroeconomic impacts and projected a drop in the Cayman Islands’ GDP from the pre-storm level of 3.1 per cent to a negative growth rate or contraction of -2.2 per cent post-storm. The Consumer Price Index is expected to increase from 1.9 per cent to 3.1 per cent.

Damages and losses reported by sector are as follows:

Social Sector: Total damage and loss to the social sector amounted to CI$1.5 billion, or 53% of the total impact. The most severely affected sub sector is housing, which had a total impact of CI$1.4 billion. The impact on education totalled CI$44.8 million.

Productive Sector: The total impact to the productive sector equalled CI$931.4 million, or 33 per cent of the total impact. The two most impacted sub sectors are commerce and tourism. Commerce suffered an impact of CI$463.4 million and tourism experienced an impact of CI$462.4 million.

Infrastructure Sector: The total damage and loss to infrastructure amounted to CI$407 million or 14 per cent of the total impact. The most severely impacted sub sector was road transport, which had a total impact of CI$194.9 million, followed by telecommunications at CI$79.5 million.

The team

In late November, an ECLAC-led mission arrived in Grand Cayman at the request of the Cayman Islands Government and with the support of the United Nations Development Programme. The mission’s purpose was to prepare a multi-sector, integrated damage and loss report. Government’s Economics and Statistics Office assisted. The ECLAC methodology for such a report was developed over the past decades and is recognized by international public and private sector organizations.

ECLAC is one of five regional UN commissions. It was founded to contribute to the economic and social development of Latin America and the Caribbean, coordinate actions towards this end, and reinforce economic relationships among the countries and with other nations of the world.

In the meantime, Cayman continues its recovery efforts. The international financial services industry was interrupted for one week. After the restoration of power, water, and telecommunications, the industry was once again operating. Cruise ships returned on 1 November and stay-over tourists were welcomed back on 20 November, though several hotels, condos, restaurants and other tourist businesses will continue their recovery efforts through March 2005 and possibly later.

Government priorities have been to assist residents in re-building and repairing homes and removing storm debris.

Ivan is the worst disaster to have ever impacted the Islands. The last storms that had similar impacts were experienced in 1932 and in 1944.

The government places major emphasis on provision of pubic shelters to withstand catastrophic hurricanes and only two people died in the Cayman Islands as a result of Hurricane Ivan. These tragic deaths, the loss of homes, and the interruption of business will be studied, and future mitigation will be based on the lessons learned from the Ivan experience.