Philippines Typhoon

10 days ago, typhoon Haiyan devastated many areas in the Philippines, killing thousands and leaving millions homeless with whole villages and towns turned to rubble . This disastrous disaster has destroyed lives but has had significant consequences in the short run for the Philippine's economy. The Philippine economy was a leading emerging Asian market but the typhoon has hit them hard. As a country that is reliant on the export of commodities it is particularly damaging as the land has been destroyed therefore heavily affecting the abundance of agriculture and commodity markets. Unfortunately, the typhoon hit just before harvest time, so a years worth of crop is gone and with it the valuable revenue that would have been obtained. However beyond the short run effects is there a light at the end of the tunnel for the Philippines economy?

The short run effects were inevitably going to be negative however the long run effects don't have to be. Past typhoons have shown only short run, minuscule effects on GDP. Haiyan, actually missed the main industrial and commercial areas therefore GDP will not be majorly affected. But for the areas affected, the typhoon has provided an insight into how the infrastructure can be repaired and improved to avoid such catastrophic consequences in the future. For example, building stronger foundations and earthquake proofing for buildings which will actually help GDP to grow through construction efforts. In addition to this, the Philippines government fund spending due to their strong fiscal situation and Filipinos overseas will likely send more money home to help relatives.