Vanuatu struggles to recover after devastating earthquake

Recovery efforts are underway in the South Pacific island nation of Vanuatu following a powerful 7.3 magnitude earthquake that struck last week, causing extensive damage in the capital, Port Vila.

With many businesses closed and a tourism-dependent economy at risk, officials are working diligently to address the fallout from this natural disaster. The World Bank has fast-tracked 12 million U.S. dollars to support cleanup efforts.

General manager Anita Ambong of the Moorings Hotel was on-site when the earthquake hit.

"I knew it was bad and I just shouted to all the staff and the guests that were here, 'Up the hill, up the hill!' because after this I knew there would be a tsunami warning or something," she recalled.

Fortunately, none of her staff were injured, and the hotel sustained only minor damage.

However, the hotel has not escaped the broader impact on business during one of its peak seasons. The road leading to the hotel remains closed, leading to canceled reservations.

"Tourism to Vanuatu is very important; it is one of the most important resources that brings more of Vanuatu's income, and most of us we rely on that," Ambong said.

The disruption to tourism and trade in the heart of Port Vila was immediate and severe. The country, already coping with the aftermath of three cyclones last year, now faces the potential for long-term economic challenges. Some businesses may never recover from the latest disaster.

Choi Euncheon, who owns an auto repair shop affected by landslides, expressed concern over the future of his business. His store is closed, and he has no idea for how long. For him, that's a lot of money lost.

"Big money, big problem now," he said.

As Vanuatu focuses on the immediate needs of approximately 80,000 people directly affected by the earthquake, the challenges ahead are daunting.

"I'm worried at the moment about high unemployment, high inflation, because of limited supplies that will be happening, so this is going to be a big issue," said Dickinson Tevi, secretary general of the Vanuatu Red Cross Society.

Aid workers warn that Vanuatu will require sustained support to recover from this calamity.

Vanuatu struggles to recover after devastating earthquake

Europe is facing mounting economic pressure as tensions in the Middle East escalate, causing significant fluctuations in global energy markets, a European energy expert has said.

The region's heavy reliance on energy imports has left it vulnerable to soaring oil and gas prices, raising concerns over inflation and economic stability, said Simone Tagliapietra, a senior fellow at Bruegel, a Brussels-based think tank devoted to policy research on economic issues.

"This is putting very tough pressure on the European gas markets. Also, we see rising cost of the gasoline at the pump. So, higher energy costs, which will again have huge impact on the European citizens and which risk to ignite an inflation spiral where all prices rise as a consequence of the rising energy prices," said Tagliapietra, who specializes in EU climate, energy and industrial policy.

Despite Europe's substantial imports of liquefied natural gas (LNG) from the United States, the expert cautioned, U.S. supply remains unstable, which further complicates Europe's energy security outlook.

"Given the volatility in the decisions of the Trump administration and given the trade war that the Trump administration has started against all other countries including the European Union in the past year, we are also very much attentive at any possible attempt by the U.S. administration to limit the exports of this LNG. We do not see this as an imminent risk, but this is something that Europe certainly needs to watch out with great degree of care in the coming months and weeks," he said.

Tagliapietra agrees that Europe must accelerate its energy transition to reduce dependency on single import sources and fossil fuels.

"There is nothing that Europe can do to decouple itself from this vulnerability of fossil fuel dependency, then accelerating the deployment of solar and wind energy sources in Europe. And we need to continue to do a lot of efforts amid this new energy crisis," said Tagliapietra.

Rising tensions in Middle East trigger energy market volatility in Europe: expert