Impact on the non-formal sector
Disasters have special negative impacts on the non-formal
sector. The costs of disasters are often underestimated because disruption in
this part of the economy is not usually taken into account. In many societies
the non-formal economy, while not usually included in national economic
statistics, can involve a substantial portion of the total population. The
non-formal sector is especially vulnerable to housing damage because houses
often serve as sites of business activity. Once local business is disrupted,
there will be indirect costs from lost employment and income. Small business in
this sector may be especially sensitive to price increases. In addition, relief
efforts can themselves inhibit recovery in this sector. For example, import of
relief items can create disincentives to small producers, particularly in the
agricultural and personal and household goods sector.
Hurricane damage
UNDRO/U.
Tomblin
