How much will it take to rebuild Venezuela after the earthquakes?

Three weeks after the twin earthquakes struck Venezuela’s coastal region, the official death toll has risen to nearly 5,000, while close to 18,000 people remain displaced. As the immediate emergency response gives way to longer-term recovery efforts, attention is increasingly focused on the financial resources required to manage the humanitarian needs of the catastrophe, but also to rebuild the country’s homes, infrastructure, and economy.
Initial assessments have largely concentrated on estimating the direct physical damage to buildings, infrastructure, and other tangible assets. These estimates, however, do not capture the indirect economic losses resulting from disruptions to production, trade, employment, and public services. As more comprehensive information becomes available, the estimated total economic impact of the disaster is therefore expected to increase substantially.
How are disaster losses estimated?
The internationally recognized standard for estimating the economic impact of disasters is the Disaster Assessment Methodology developed by the Economic Commission for Latin America and the Caribbean (ECLAC), a pioneer in this field. The framework has since been adopted by major international institutions, including the World Bank (WB) and the Inter-American Development Bank (IDB).
Its third edition, published in 2014 in collaboration with the Pan American Health Organization (PAHO), provides a comprehensive approach for estimating not only the direct effects of disasters but also their socioeconomic impacts at both the macroeconomic and household levels, as well as the financial resources required for recovery and reconstruction.
Under this methodology, disaster impacts are classified into three categories: damage, losses, and additional costs. Damage refers to the destruction of physical assets such as buildings, facilities, machinery, equipment, infrastructure, and inventories. These are valued according to their estimated replacement cost at pre-disaster prices.
Losses represent the value of goods and services that are no longer produced or delivered from the moment the disaster occurs until full recovery is achieved. Estimating these losses requires comparing the post-disaster trajectory of economic sectors with a hypothetical scenario in which the disaster had not occurred. As a result, these estimates depend on a range of assumptions and are inherently subject to uncertainty.
Additional costs include extraordinary expenditures incurred by governments and the private sector in response to the disaster, such as emergency medical supplies, humanitarian assistance, and other essential goods and services.
Finally, the methodology estimates recovery and reconstruction financing needs, which encompass the costs of the public policies and investments required to restore normal economic and social conditions. These include rebuilding basic infrastructure and services, as well as financing food assistance programs, cash transfers, and other forms of support for affected households.
How large are the economic losses of the earthquakes?
We still don’t know the full scale of the destruction. While the Venezuelan government claims that more than 2,000 pieces of infrastructure were severely damaged, satellite images from NASA show that the figure is closer to 30,000.
Just two days after the twin earthquakes struck, the United Nations Development Programme (UNDP) released a preliminary assessment of the direct physical damage to housing and other assets, using satellite imagery and artificial intelligence-powered Geographic Information Systems (GIS) through its Rapid Digital Analysis (RAPIDA) methodology. The assessment estimated direct losses to be USD 6.7 billion, with a range of USD 4.7–8.7 billion, equivalent to approximately six percent of Venezuela’s GDP.
Venezuelan economist Asdrúbal Oliveros argues that the damage could be more extensive, estimating direct losses at USD 7-9 billion. He further suggests that the total cost of reconstruction could reach USD 12-15 billion, reflecting not only the replacement of damaged assets but also the broader costs of economic recovery and rebuilding.
In contrast, the United Nations Office for Disaster Risk Reduction (UNDRR) has produced a significantly higher estimate. Its analytical assessment places direct physical damage at approximately USD 37 billion — nearly 40 percent of Venezuela’s GDP.
Around two-thirds of these losses are attributed to damage to residential, commercial, educational, healthcare, government and industrial buildings, while the remaining third applies to critical infrastructure, including telecommunications networks, roads, ports, airports, and other public assets.
Local damage, national consequences
While six states were impacted, most of the physical damage caused by the twin earthquakes is concentrated in the state of La Guaira, as well as parts of Caracas, the capital. Consequently, the resulting economic losses are expected to be largely confined to a region that does not account for a significant share of Venezuela’s productive capacity, particularly in the oil, manufacturing, and agricultural sectors.
At the local level, however, the impact is substantial. According to a policy brief published by ThinkAnova in collaboration with the Microsoft AI for Good Research Lab, approximately seven out of every ten damaged buildings in La Guaira are located in Catia La Mar, while the severity of damage and the number of affected households in Caraballeda are particularly high. These impacts have also disrupted one of the region’s main economic activities: tourism.
Oliveros identifies housing, infrastructure, commerce, transportation, and logistics as the sectors most severely affected. Damage to the main runway at Simón Bolívar International Airport in Maiquetía — the country’s principal international gateway — forced its temporary closure. Although operations have partially resumed, the airport has yet to return to full capacity, prompting airlines to reroute flights through Valencia and Barcelona, and reshaping economic activity in these regions.
Rebuilding under severe financial constraints
Given the country’s fragile economic conditions, rebuilding Venezuela presents an extraordinary challenge. Following a contraction of roughly 75 percent in economic output and a period of hyperinflation that exceeded 300,000 percent annually, the collapse in the value of the Venezuelan bolívar has severely eroded household incomes while dramatically shrinking both the banking sector’s lending capacity and the insurance market. These structural weaknesses significantly constrain the country’s ability to finance recovery and reconstruction.
Access to external financing is also limited. Since 2017, Venezuela and the state-owned oil company PDVSA have remained in default on their external debt, which The Financial Times has estimated at approximately USD 240 billion. This has effectively closed access to international capital markets.
Although Calixto Ortega, Vice President for the Economic Area, President of Banco de Venezuela and Venezuela’s Governor to the International Monetary Fund, has stated that negotiations to restructure the country’s external debt continue despite the emergency, Venezuelan economist Leonardo Vera argues that debt restructuring alone will not provide the resources required for reconstruction. Instead, he points to alternative financing mechanisms, including dedicated reconstruction funds, multilateral financial assistance, and both international and domestic donations.
The government has announced several initial funding initiatives. Interim President Delcy Rodríguez unveiled a reconstruction fund with an initial allocation of USD 200 million drawn from Venezuelan assets held at the IMF, intended to finance housing, infrastructure, and hospital reconstruction. Similarly, the Development Bank of Latin America and the Caribbean (CAF) has established a fund to mobilize public, private, and international resources in support of emergency response and long-term reconstruction.
Despite these announcements, the resources committed so far remain only a small fraction of the amounts that preliminary estimates suggest will be required to fully rebuild the affected regions and restore economic activity.