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In wake of disasters, some see economic opportunity
Rebuilding means jobs, more business
Question of the Day
Customers are paying $1,200 to $2,000 on average for chimney repair, Ms. Chanthalath said. One customer paid $16,000. “We’re trying to keep the costs as low as we can,” she added, explaining that the company wants to help the community during its time of need. “We’re doing what we can.”
In Joplin, the tornado tore apart homes, hospitals and schools, but the community has been quick to recover. About 400 of the 523 businesses destroyed have reopened or announced plans to do so.
Joplin’s economy also has been invigorated by 70,000 relief workers from across the country. Their arrival to help with cleanup efforts has boosted business at hotels and restaurants. June sales tax receipts were up 5 percent from last year.
“The economic impact that we’re feeling right now is all very positive,” Ms. Smith said. “They’re staying here. They’re eating here. They’re shopping in our stores.
“It’s a devastating blow to the community,” she added. “But really, it’s an opportunity that no other community gets.”
Local officials also are banking on a boost in construction in the next three to five years.
“We have 13 miles of ground that’s going to be empty,” Ms. Smith said. “So the construction industry will obviously receive a little bit of a boon from that.”
The community also tends to support local businesses.
“Nobody in Joplin wants to see any business fail right now,” she said. “There’s an incredible spirit here right now. When we make a purchase, we do it here. We don’t go out of town to make that purchase, or go online.”
The general consensus among economists is that wealthy countries such as the United States have enough money and resources to rebuild and push the economy forward over time. Developing nations such as Haiti, however, have more difficulty recovering from disasters.
“Developed countries experience a positive effect on GDP growth in the aftermath of a disaster,” Jose De Gregorian, governor of the Central Bank of Chile, wrote in a recent symposium of economists and development specialists in the magazine International Economy, “while developing countries tend to suffer reductions in economic activity.”
The short-term effects, whether in Joplin, Japan or Jakarta, Indonesia, are “unambiguously contractionary,” said Charles Wolf, an economist with the Rand Corp. and senior research fellow at the Hoover Institution.
“But in the medium and longer terms, and under favorable conditions, natural disasters can be stimulative,” he added, citing the quick return to growth for Indonesia after the 2004 tsunami and China after the Chengdu earthquake of 2008.
But James E. Glassman, senior economist and managing director at J.P. Morgan Chase & Co., said the argument that a major natural disaster can bring lasting economic benefits is far-fetched.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Tim Devaney is a national reporter who covers business and international trade for The Washington Times. Previously, he worked for the Detroit News, Grand Rapids Press, Portland Press Herald and Bangor Daily News. Tim can be reached at email@example.com.
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