Draft 0.1, 29 September 2026. Visible to administrators only, for review before publication.

Module 5: Restarting the local economy after a disaster

Reading time about 30 minutes, workshop 60 to 90 minutes. For club and district economic development committees, club disaster coordinators, and the local leaders, lenders and trainers they work with.

What you will be able to do

• Apply six ground rules that keep post-disaster economic support from harming the local market.
• Explain what each of the five families of community economic development does, and what changes when it is used after a disaster.
• Choose the right partner for each family, instead of doing the work yourselves.
• Sequence the five families over time, from the first weeks of recovery to the second and third years.
• Recognise the most common mistakes before they are made.

Why it matters

Restarting the economy of areas hit by a disaster is one of the two mandates The Rotary Foundation has given RAGCED. It is also the least written part of the subject: guides on disaster response stop when relief ends, and guides on community economic development (CED) are written for normal times. RAGCED's own CED toolbox has five families of action: microfinance, vocational training, value chains, cooperatives and integrated local development. This module transposes them to the months and years after a disaster. Immediate relief is not RAGCED's role: for the first hours and weeks, see the Disaster Field Guide (https://disasterfieldguide.org/). Module 4 explains how to recognise the moment when recovery, and therefore this module, begins.

A farmers' market reopens under temporary tents after Hurricane Katrina (Waveland, Mississippi, USA, 28 January 2006). Photo: FEMA / Leif Skoogfors, public domain

Pre-apprentice training in heavy construction equipment mechanics (Anaconda Job Corps Center, Montana, USA, 27 July 2021). Photo: USDA Forest Service, Northern Region, public domain

1. Six ground rules for post-disaster economic work

These rules come partly from the sources listed at the end, partly from common sense. They apply to all five families.

1. Existing businesses first. A North American recovery manual puts it plainly: "existing businesses are the ones that are most likely to rebuild the economy." Before creating anything new, help what already exists to reopen.
2. Buy local, do not compete with the market. Once shops and traders are working again, free goods compete with them. The FAO warns that injecting money directly can distort both the commercial and the social system, and recommends that any inputs be tied to a contribution from the group. The Disaster Field Guide makes the same point for relief: money lets you buy locally, which supports the local economy.
3. Be careful with debt. People who have lost their assets are the most exposed to over-indebtedness. The same manual warns against pushing businesses into more debt than they can carry, and adds that non-repayable grants are sometimes the better solution.
4. Right time, right order. The FAO says its farmer field schools are not the first point of intervention after a disaster: they can start once communities begin to settle and adapt. The five indicators of Module 4 tell you when that moment comes.
5. Do not exhaust people with questions. "People can get weary of having multiple assessments post-disaster. If this happens, assessment results will not be true." Coordinate your needs assessment with others, and meet people in person rather than handing out forms.
6. Connect, do not replace. The club's role is to connect people to lenders, trainers, buyers and authorities who will still be there after the project. The community leads; the club supports.

2. Money: microfinance and savings

What it is. RAGCED's 2021 microfinance guidebook states that "a successful, sustainable microfinance program requires more than making loans". It promotes a six-part approach: needs assessment, education, loans, mentors, networking and evaluation. Its advice on loan capital is simple: the best source of microloans is often "a local lender already lending in your community". Where there is no banking service at all, it suggests a savings group instead of a loan programme: 15 to 25 self-selected people who meet regularly to save, then lend from their pooled savings. Rotary International's CED strategies strongly encourage clubs that want to use grant funds as loan capital to contract with a microfinance institution as a permanent lending infrastructure. It is a strong recommendation, not a ban: a club acting as a direct lender is strongly discouraged.

Why it matters after a disaster. Families and small businesses need working capital to restock, repair tools and reopen. Savings have often been spent or lost.

What changes.

• Debt risk is higher. Incomes have fallen at the very moment people need to borrow. After the 2008 flood in Cedar Rapids (United States), businesses took on more than 120 million dollars of extra debt while their revenues fell by more than 40%. A loan that is reasonable in normal times can become a trap.
• Existing loans are in trouble. Many borrowers cannot repay on schedule. Lenders have their own tools for this: the Grameen model, for example, has a flexible loan that reschedules repayments after an illness, a theft or a disaster. Talk to the lender before doing anything that touches existing loans. Paying borrowers' instalments from outside can break the lender's repayment discipline.
• Grants may come first. North American recovery programmes used small bridge loans, loans forgiven if the business reopens, and grants released in stages. Their amounts do not transfer, but the principle does: short-term help to reopen, delivered by a financial partner, before any long-term credit.

Precautions. Never lend directly. Check the lender before signing: its accounts, its loan files, its annual audit. Keep interest rates at the lender's sustainable level rather than subsidising them. Restart savings before credit where banks are absent. Build in mentoring (the RAGCED guide suggests one business advisor for five to eight entrepreneurs, over six months).

3. Skills: vocational training

What it is. Training people for jobs and self-employment that exist. Rotary International's CED strategies give the rule in one line: avoid teaching skills the labour market does not need. The Foundation's CED staff ask the same question of every training project: at the end, do people have a job, an internship, a higher income, yes or no?

Why it matters after a disaster. Reconstruction creates sudden demand for builders, electricians, plumbers and technicians. People who have lost their jobs need an income quickly.

What changes.

• Reconstruction demand is temporary. The recovery manual distinguishes economic activity (rebuilding spending, temporary hires) from lasting economic impact: favour projects that persist beyond the reconstruction period. Train for trades that will still be needed when the rebuild ends.
• Training can raise building standards. In the Ecuador example of the Disaster Field Guide, local workers were trained in earthquake-resistant construction and the municipality adopted the programme as a reference.
• Paid work can keep people in place. In North American cases, paid clean-up and repair jobs mainly served to keep the workforce in the area. Where they are combined with training, they are a bridge to lasting skills.
• Farming needs its own method. FAO farmer field schools bring together 20 to 25 producers over a full season, with facilitation rather than lectures. After a disaster they come later, not first, and a field school on resilience lasts at least 18 months.

Precautions. Talk to employers before choosing a trade. Do not offer free what local private training centres already sell, unless they are part of the project. Do not distribute free inputs during agricultural training: the FAO suggests alternatives such as paid work where part of the pay stays with the group, or vouchers exchanged for inputs at local traders.

4. Markets: value chains and cooperatives

Value chains

What it is. A value chain is all the steps that take a product from producer to final customer, with the actors and money flows between them. Rotary's CED strategies approach it through agricultural barriers (capital, skills, outdated practices, land, market access, water, market knowledge), and ask for a combination of interventions rather than a single one. The FAO sums up the logic: the market determines production. RAGCED's page on food security and income expects agricultural projects to strengthen small-scale institutions, improve production and marketing, and build capacity for employment and enterprise.

Why it matters after a disaster. A disaster breaks chains at several links at once: seeds and inputs, storage, transport, buyers. A farmer who replants but cannot sell has not recovered.

What changes. Find which link is broken before acting. Restore the flow through the traders and buyers who were there before, rather than replacing them. RAGCED's food security page lists "the establishment of production systems that reduce risk" and better storage among eligible activities: a recovery project can rebuild the chain stronger than before.

Example. In the Disaster Field Guide, agricultural recovery in Sofala province, Mozambique, after Cyclone Idai combined flood-resistant seeds, tools, micro-irrigation, training in resilient techniques and marketing cooperatives. The local club identified families with the authorities, distributed seeds and tools and supported the cooperatives. When designing a similar project, apply the FAO's rule on inputs: link distribution to a contribution from the group.

Precautions. Avoid isolated equipment, or equipment that cannot be bought or repaired locally. Do not fund a processing unit without an identified buyer. Do not flood the market with free seeds when a local seller exists.

Cooperatives

What it is. Rotary defines a cooperative as an autonomous association of people who work together voluntarily for their mutual benefit. It lets people with no market power alone (small producers, artisans, savers) buy, sell or save together.

Why it matters after a disaster. Collective action often starts from a concrete need. Five days after the Cedar Rapids flood, more than 500 business owners met to share equipment and premises; the group then became the unified voice of small businesses towards the authorities. In Greensburg (United States), local business owners created a non-profit that built premises for thirteen local businesses, funded by local donations.

What changes. Existing cooperatives and savings and credit cooperatives may have lost members, stock and cash. Check their books before putting money in: reserve fund, two signatories on bank accounts, annual audit, grants kept separate from members' own funds.

Precautions. The group should exist before the statutes. A cooperative created quickly to receive aid is an empty shell. Watch for capture by a few influential members, protect women's and young people's participation, and do not stop support abruptly on registration day. The first question a funder asks is whether the cooperative is legally registered.

5. Places: integrated local development

What it is. Working on several fronts in one place: markets, storage, workshops, business incubators, combined with training and services. Rotary's CED strategies describe an "adopt-a-village" approach: several coordinated strategies in one community, led by the community from design to evaluation. Rotary also warns against isolated equipment or infrastructure proposals.

Why it matters after a disaster. Markets, workshops and storage are often physically destroyed. Rebuilding them is where the economy becomes visible again.

What changes.

• Build what will last beyond the rebuild. In Cedar Rapids, a public market opened in a flood-damaged industrial building. The idea came from local residents; the market works as an incubator, with below-market rents, and neighbouring shops saw their weekend trade double. This is a rich-country case: keep the method, not the scale.
• Schools hold communities together. In Greensburg, classes reopened in temporary buildings three months after the tornado, because families decide where to live according to education.
• Bottom-up, not top-down. The same manual concludes that "a top-down neighbourhood revitalization development does not work".

Precautions. Beware the empty building. Before any construction, define who owns and runs the facility, how it covers its running costs, and who pays for maintenance and renewal. No ribbon-cutting without that plan.

6. Sequencing the five families over time

The five families do not start together. The sequence below is a proposal based on common sense and on the sources above; adapt it to each disaster.

The CED guide proposes the same logic for funding: a first, transitional economic Global Grant to restart the damaged local economy, then a structuring one to install lasting mechanisms such as microfinance, cooperatives and restored value chains. Check timing and rules in the Foundation's current Terms and Conditions.

Go further

• Community economic development guide for Rotary clubs (in preparation), Guillaume Bourgogne: "Principles and ethics of CED"; "Microfinance and financial inclusion"; "Vocational training and employment"; "Value chain development"; "Cooperatives and collective entrepreneurship"; "Integrated local development".
• Disaster Field Guide, Guillaume Bourgogne: Chapter 23, "From response to recovery".
• RAGCED, Guidebook for Building Sustainable Microfinance Programs (2021), and the page "Food security and income", on https://ragced.org
• Rotary International, Economic and Community Development Project Strategies.
• FAO, Farmer Field School Guidance Document: Planning for Quality Programmes.
• Economic Developers Alberta, Community Toolkit for Economic Recovery and Resiliency (2019).
• Disaster Field Guide: https://disasterfieldguide.org/

After running this module in your club, please send your feedback (a pre-filled email), or fill in the feedback sheet in the workshop sheets and send a photo of it. It helps RAGCED improve the programme.

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