This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 SAN SALVADOR 003507 
 
SIPDIS 
 
STATE ALSO FOR AID/LAC 
 
E.O. 12958: N/A 
TAGS: ECON EAID PGOV PHUM PREL SENV SOCI ES
SUBJECT: AFTER THE DELUGE: THE EFFECTS OF HURRICANE STAN AND ILAMATEPEC VOLCANO ERUPTION
 
 
¶1.  SUMMARY: El Salvador's geography and geology make it 
vulnerable to natural disasters such as earthquakes, 
hurricanes, and volcanoes.  During October, the nation 
suffered a volcanic eruption, hurricane-induced flooding and 
mudslides, and an earthquake, although the latter caused 
little if any serious damage.  Losses total an estimated 
$355.6 million, including damages of $113 million to private 
housing and $103 million to roads.  Crop losses total almost 
$50 million.  In polls since the disasters, President Saca 
has received high marks for the administration's rescue and 
disaster-relief efforts; with less than three months to go 
until March elections, positive perceptions of the 
administration's disaster response underscore its lead with 
prospective voters.  END SUMMARY. 
 
BACKGROUND 
----------

¶2.  Lying on the Pacific's earthquake-prone Ring of Fire and 
at latitudes plagued by hurricanes, El Salvador's history is 
a litany of catastrophe, including the Great Hurricane of 
1780 that killed 22,000 in Central America, and earthquakes 
in 1854 and 1917 that devastated El Salvador and destroyed 
most of the capital city.  More recently, an October 1986 
earthquake killed 1,400 and seriously damaged the nation's 
infrastructure; in Fall of 1998, Hurricane Mitch killed 
10,000 in the region, although El Salvador--lacking a 
Caribbean coast--suffered less than Honduras and Nicaragua. 
Major earthquakes in January and February of 2001 took 
another 1,000 lives and left thousands more homeless and 
jobless. 
 
AN OCTOBER TO REMEMBER 
----------------------

¶3.  El Salvador's largest volcano, Santa Ana (also known by 
its indigenous name Ilamatepec), erupted on October 1, 
spewing tons of sulfuric gas, ash, and rock on surrounding 
communities and coffee plantations and killing two people. 
The death toll was relatively small because the government 
had already evacuated at-risk communities, based on 
increases in seismic activity that began June 15; however, 
the eruption permanently displaced 5,000 people, and forced 
the temporary evacuation of 15,000. 
 
¶4.  The following day, on October 2, Hurricane Stan 
unleashed heavy rains that caused flooding throughout El 
Salvador.  During the first five days of October, nearly 400 
millimeters (about 16 inches) of rain fell on land already 
saturated by wet-season rains.  (Note:  Late rainy-season 
precipitation usually averages approximately 250-300 mm per 
month during August, September, and October.  End note.) 
Floods ruined crops in some of the most fertile parts of the 
country, and landslides disrupted transportation and 
communication in cities and rural areas.  In all, the 
flooding caused 67 deaths, and more than 50,000 people were 
evacuated at some point during the crisis. 
 
DAMAGES ESTIMATED AT $355.6 MILLION 
-----------------------------------

¶5.  The United Nations Economic Commission for Latin America 
and the Caribbean (ECLAC) estimates the economic damages of 
these natural disasters at $355.6 million, or 2.2 percent of 
annual GDP.  ECLAC believes that the growth projections for 
this year will only be marginally affected, and that this 
negative effect will likely be counteracted next year by 
reconstruction efforts, especially by housing construction. 
ECLAC estimates a GDP growth rate of 2.2 percent for 2005, 
lower than the 2.5 percent previously projected.  For 2006, 
GDP would grow by 3.2 percent, instead of the previous 
projection of 3 percent, thanks to increased economic 
activity spurred by reconstruction efforts.  Inflation for 
2005 will run approximately 4.5 percent instead of the 4 
percent previously projected, mostly as a result of higher 
food prices due to increased transportation costs and crop 
damage. 
 
¶6.  Damage to private housing was estimated at $113.1 
million.  Meanwhile, schools and healthcare facilities 
sustained damages of $17 million and $19.3 million, 
respectively, with 55 health units and one hospital 
reporting damage.  Losses in transportation infrastructure 
were estimated at $103 million; a total of 300 kilometers of 
paved roads were damaged.  Damage to public water systems 
totaled $11.8 million.  On the positive side, reservoirs now 
full from the rain are allowing hydroelectric generators to 
run at full capacity, and overall the sector's revenues are 
ahead an estimated $1.3 million. 
 
¶7.  Crop losses totaled $48.7 million, with coffee bearing 
the brunt of the damage due to the volcanic eruption.  An 
estimated 43,000 hectares of coffee sustained significant 
damage, and the foundation for Coffee Research, PROCAFE, 
estimates that about 3 percent of the total coffee crop for 
the year was lost, with a potential value of almost $6 
million.  Other crop damage included corn, vegetables, 
bananas, forage, fruits, cotton and beans.  Subsistence 
farmers cultivating in flood plains were hit especially 
hard, losing their summer corn crop (which was drying in the 
fields), as well as a red-bean crop that is grown on the 
drying corn stalks.  In a country already suffering severe 
erosion caused by overfarming marginal lands, ECLAC reports 
that landslides caused by the rains damaged another 955 
hectares of land. 
 
Relief Efforts Focus on Mitigation 
----------------------------------

¶8.  On October 4, 2005, the Legislative Assembly declared a 
National Disaster and State of Emergency to free up 
resources for disaster response.  President Saca has 
announced that public investment plans for next year would 
focus on disaster prevention and mitigation.  An Inter- 
American Development Bank loan of $43 million that was 
previously destined for the Ministry of Environment and 
Natural Resources will now go toward disaster mitigation 
efforts. 
 
¶9.  Housing reconstruction will also be a priority.  A $75 
million loan from the Central American Economic Integration 
Bank for housing and road construction will also go to 
disaster relief, including a housing project that President 
Saca announced November 27 would provide homes to 2,000 
persons displaced by the disasters.  ECLAC projects that 
coping with the aftermath of the disasters will increase the 
fiscal deficit by 0.6 percent of GDP in 2006 for a total 
deficit of 2.9 for the year, and by 0.3 percent of GDP in 
2007 for a total deficit of 2.1 percent of GDP.  For 2006, 
reconstruction expenditures are estimated at $100 million, 
with $52 million estimated for 2007. 
 
¶10.  Bilateral donors have pledged a total of about $9.5 
million so far to support relief efforts.  Spain has pledged 
$3 million.  Other donors include Germany, Italy, France, 
Taiwan, Mexico, Norway, South Korea, Japan, and Israel. 
Venezuela donated $400,000 in food and supplies. The United 
States, through USAID, donated $2.1 million total to the 
relief effort, including $100,000 to Catholic Relief 
Services (CRS) for supplies, $100,000 to PAHO for water and 
sanitation, $15,000 for volcanic monitoring, $400,000 in 
food aid, $500,000 for small-scale infrastructure, and an 
additional $1 million for priority needs to be identified in 
agreement with the Ministry of Foreign Affairs. 
Multilateral donors have contributed an additional $1 
million and have allowed the El Salvador to reprogram 
previously approved loans for disaster relief. 
 
POLITICAL FALLOUT? 
------------------

¶11.  In a November CID-Gallup poll, 81 percent of those 
interviewed expressed approval of the Saca administration's 
overall response to October's crisis; 72 percent 
characterized the assistance to disaster victims as "Good" 
or "Very Good."  Some 87 percent blamed the widespread 
destruction either on the exceptional strength of the 
abnormal weather, deforestation, or the construction of 
housing in at-risk areas, while only 6 percent indicated 
that the government bore any blame for the scope of the 
losses. 
 
¶12.  COMMENT: The damages from the October natural 
disasters, while serious, do not appear to have dealt a 
significant blow to the country's continued development on 
the scale of Hurricane Mitch or the deadly 2001 earthquakes. 
Recovery and reconstruction efforts are already underway. 
With less than three months to go until March municipal and 
Legislative Assembly elections, there seem to be no negative 
ramifications from October's natural disasters for the 
ruling ARENA party.  On the contrary, the administration's 
efficient response appears to have enhanced its reputation 
for good government, and reinforced its advantage among 
likely voters.  END COMMENT. 
 
Barclay