Central America drought, 2023 - Forensic analysis

The UN Global Assessment Report on Disaster Risk Reduction (GAR 2024) report presents 10 case studies, each one with a forensic risk analysis, which systematically examines and investigates the disasters to understand their causes and impacts, as well as the effectiveness of any mitigation measures.

Step 1: Understanding the disaster DNA

What happened?

Droughts have been a persistent hazard in Central America for more than 12,000 years, impacting ecosystems, life zones, and resource use. While these dry spells vary in size, duration, and impact, they have been handled in very different ways.

Since 1981, regional droughts have occurred roughly every seven years, lasting about a year and affecting an average of four countries each time. El Niño is often assumed to be a factor, but in fact it triggered only half of the regional droughts in this period.

Climate change in Central America is predicted to make dry areas drier and wet areas wetter, while four of the seven Central America capitals are already experiencing significant reductions in rainfall. Environmental degradation, including water pollution from industrial and agricultural activities, worsens the situation even more. Growing deforestation rates, particularly in Honduras and Guatemala, compound the situation.

Agriculture is highly sensitive to drought, and, in 2014, decreased and uneven precipitation caused significant damage. Between May and July 2014, for example, the amount of rainfall dropped throughout the Pacific region in some areas by up to 4 mm per day. Even one month of drought can cause crop loss, and in some countries, the July canícula, normally a two- or three-week dry spell, lasted for as many as ten weeks.

Exposure: Where was damage concentrated?

Central America faces structural challenges with its water security. Demand for water is highest in major cities, but most of these are located in places where supplies are historically lower. Often these densely populated areas are adjacent to regions of intensive agriculture, which also need plenty of water.

Farmers are also affected. Central America has more than 1 million households, who survive on subsistence farming. These are primarily in the Dry Corridor which spans more than 30 percent of the region. Drought impacts these farmers the most, causing malnutrition and reducing their opportunities to escape from poverty.

Vulnerability: Who was affected and why:

Droughts in Central America disproportionately impact those with lower socioeconomic standing. Farmers, especially small-scale farmers, are particularly vulnerable due to limited resources for adapting to changing conditions. Similarly, those lacking access to clean water suffer greatly during droughts as existing infrastructure often struggles in dry periods. Vulnerability is closely linked to livelihoods and access to essential services.

Historically, the agricultural sector has borne the brunt of drought impacts, particularly small and medium producers. However, recent droughts have expanded their reach, affecting urban areas and industries. The Economic Commission for Latin America and the Caribbean (CEPAL) estimates that by 2100 potential production losses could reach up to 22 percent of Central America's agricultural GDP. Corn, beans, and rice occupy half of Central America's cultivated land. Studies incorporating soil degradation effects have predicted significant production losses for staple grains, with bean production particularly affected. Expected reductions are around 25 percent in Nicaragua, Guatemala, El Salvador, and Honduras. About 78.6 percent of agriculture in Central America is family-based, with an average 3.13 hectares of land per family. More than 60 percent of families use their production for subsistence.

In Guatemala, drought affects 70 percent of the country's landmass and the poorest 54 percent of the population, who account for half of all chronic malnutrition among children under age five, according to Guatemala's Food and Nutritional Security Secretariat, SESAN.

Impacts are increasingly cascading. A 10 percent reduction in crop yields could lead to emigration by an estimated 2 percent of the population, for example. By 2080, climate change and related declines in agricultural productivity could induce 1.4 to 6.7 million adult Mexicans to emigrate.

In August 2022, the Mexican President proposed to halt beer production in the northern part of the country due to a severe water shortage. This region, which includes the heavily populated city of Monterrey, is experiencing a drought that threatens the availability of water for domestic use. The brewing process requires significant amounts of water, and studies suggest that climate change is posing a global threat to the beer industry.

Water scarcity disrupts industrial operations and increases energy costs in countries reliant on hydropower. Access to essential public services in rural areas and many urban areas also needs improvement. Basic infrastructure, healthcare, and education are insufficient, perpetuating cycles of poverty and hindering human development. Informality is high in labour markets, with limited formal employment opportunities and social protection, especially for youth and women.

Drought-related disasters in Central America would be less severe with reduced poverty, better income distribution, and higher-quality labour markets. Poverty and inequality have been constant challenges in the region for the past 50 years. In rural areas, poverty is closely linked to subsistence agriculture, while in urban areas, it manifests through lack of access to formal jobs, adequate housing, and essential services like clean water, sanitation, and education.

Floods and droughts increased poverty levels by 1.5 to 3.7 percent between 2000 and 2005. Institutional weaknesses further exacerbate the problem. Aging water treatment and distribution infrastructure in dry regions leads to significant water loss, hindering access, particularly in rural areas. Closing the investment gap in the water and sanitation sector is crucial for improving drought resilience.

In 2022, inflation in Latin America and the Caribbean fluctuated between 3.6 and 6 percent, driven by high international commodity prices, production, and transportation costs. Currency depreciations, weather events, and insecurity pushed prices higher, especially in Haiti.

Resilience: what factors limited the impacts?

Drought in Central America demonstrates the importance of "meaningful inclusion" for avoiding disasters. This concept requires addressing poverty and income distribution by involving everyone, especially subsistence farmers and indigenous peoples, in planning and implementing adequate water supplies. Urban areas should also be included since many residents cannot afford bottled or trucked water. Providing and maintaining basic water and sanitation infrastructure as a public service can prevent drought disasters. The case study shows that drought has long affected Central America, with impacts worsened by neglected water infrastructure and inequitable access.

Limited data and differing definitions make it hard to compare drought impacts across sectors and countries. However, scientific understanding of drought has improved, and initiatives exist to bridge the knowledge gap between science and other sectors. But translating this knowledge into effective risk reduction is difficult due to fragmented communication and limited coordination between institutions.

Drought risk management in Central America needs a more cohesive institutional framework. This weakness limits the monitoring and enforcement of regulations. Budgetary constraints are a significant issue, but improvements can be made through better inter-institutional and local government collaboration.

Insurance penetration in the region is low, with limited options for addressing drought impacts. Existing agricultural insurance covers only a tiny portion of potential losses and is not widely affordable. No financial solutions exist for losses related to hydropower or water supply disruptions despite the potential macroeconomic impact of such events.

Disaster risk management (DRM) currently plays a minimal role in drought preparedness. While some humanitarian and sectoral support exists, DRM efforts primarily focus on emergency response rather than comprehensive risk reduction. A more comprehensive approach is needed to address knowledge gaps, strengthen regulations, and tackle the underlying factors exacerbating drought impacts.

Step 2: Future trends

People

• Slums are becoming a more important factor in the region's urbanisation, accounting for 29 percent of all urban residents, rising to 39 percent for Guatemala. These settlements are often informal and illegal. An estimated 30-66 percent of urban dwellers in Central America do not have basic services such as water or sewer systems. Between 1990 and 2015, slums grew as a proportion of Latin American residences from 6 to 26 percent.
• Drought conditions in the Dry Corridor magnify food and water challenges, often leaving vulnerable people with little choice but to migrate.
• Central America has some of the world's highest inequalities. Gini coefficients in El Salvador, Honduras and Guatemala are 38.8, 48.2, and 48.3 respectively.
• Poverty is widespread. In Guatemala, the national poverty rate is 62 percent, rising to 77 percent for rural populations. In Honduras, the national poverty rate is 60 percent, rising to 82 percent for rural populations. Indigenous populations are disproportionately affected.

Planet

• Central America is one of the world's most exposed regions to climate change, the IPCC's Sixth Assessment Report (AR6) says. It is also one of the regions most affected by climate migration and displacement. By mid-century, the main climate impacts on the region will include significant heat waves, increased intensity and frequency of tropical cyclones, relative sea level rise, coastal flooding, erosion, ocean acidity, and aridity, drought and wildfires.
• Without significant investment, urban and rural water scarcity is set to increase.

Prosperity

• CEPAL says drought will cause agricultural production to fall by as much as 22 percent by the end of this century.
• Food consumer price inflation (CPI) stands at 7.5 percent and shows few signs of decreasing. Other factors, such as currency depreciations and insecurity, suggest that CPI is likely to remain high.
• Central America is one of the world's most urbanised regions, with the second-fastest rate of urbanization. Some 59 percent of the population lives in urban areas and this figure is expected to reach 70 percent within a generation.

Step 3- Forensic learning

This section aims to encourage dialogue around the forensic analysis to foster improved decision making. The areas for consideration below are envisaged as an input to stimulate in-country discussion and action plan on future disaster prevention and enhanced disaster risk management