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Urgent needs obscure long-term costs
By Emad Mekay

WASHINGTON - The world is rallying to aid countries and lives damaged by the tsunamis that have killed more than 120,000 people in Asia and Africa, injuring three or four times as many, but f ew have ventured to calculate the long-term economic impact of the disaster.

The International Monetary Fund (IMF) and the World Bank say it is too early to know the real damage caused by the disaster, but some independent analysts have began forecasting long-term costs.

Giant sea waves hit the coastlines of several Asian and African nations on December 26, triggered by a massive earthquake with its epicenter off the west coast of northern Sumatra in Indonesia. Bangladesh, Myanmar, India, Indonesia, Malaysia, Maldives, Sri Lanka, Singapore, Thailand and Somalia have all been stricken, with about one-half of the deaths in Indonesia alone.

A Duke University professor who has studied rural economic development in Indonesia and Sri Lanka says the loss of coastal villages' fishing fleets will be a major long-term obstacle to economic recovery. While the world and local governments will focus on short-term relief, fewer resources will be available to address the staggering long-term needs, predicts Randall A Kramer, professor of resource and environmental economics at Duke's Nicholas School of the Environment and Earth Sciences.

"These communities are dependent on the ability to fish, to trade by boat and to travel by boat," said Kramer, who has conducted house-to-house socio-economic surveys in Indonesian coastal communities, similar to those decimated in northern Sumatra. "These villagers have very low incomes to begin with, and without their boats - their major source of income - recovery will be especially slow."

The destruction of boats, vehicles, harbors and roads will make it extremely difficult for fishermen to travel to other villages in search of work, added Kramer.

"It will be a challenge to find ways to earn the money they'll need to buy or build new boats," he said. "They'll have to scrape together what little they can, or borrow money from relatives in other communities, assuming those communities haven't also been devastated. Government or commercial loans for small-scale fishermen to buy boats and fishing gear are rarely available."

Other independent bodies have also ventured initial estimates of the economic costs. The Brussels-based International Confederation of Free Trade Unions (ICFTU) said its union sources in Thailand estimate that 200,000 people are likely to be affected in southern Thailand's tourism industry where, in Phuket alone, 50,000 workers are employed in hotels.



There are also concerns about the fate of up to 50,000 migrant workers from Myanmar working in the region, many of them illegally. Thousands of plantation workers in Indonesia, tourism employees in Malaysia, as well as various categories of workers and their relatives in Sri Lanka and India are likely to be hit for a long time, said the union.

Both the IMF and the World Bank said they stand ready to help the affected countries: IMF officials said they would consider adjusting some of Indonesia's huge loans, while the bank said on Thursday that it will offer US$250 million in emergency reconstruction funds over the next six months while further financing for longer-term reconstruction needs is identified.

Bank officials have also said they would not object to governments' directing some of their current money on loan from the institution to affected areas.

German Chancellor Gerhard Schroeder has also suggested that the Paris Club of rich creditor nations could also approve a moratorium on repayment of debt owed by Indonesia and Somalia when it meets January 12.

But last week, the focus was still on saving lives. The World Health Organization (WHO) said that between 3 million and 5 million people in the region are unable to access the basic requirements they need to stay alive. Services such as clean water, adequate shelter, food, sanitation and health care are lacking, it said, calling for immediate assistance of $40 million.

Unless the necessary funds are urgently mobilized and coordinated in the field, "we could see as many fatalities from diseases as we have seen from the actual disaster itself. The tsunami was not preventable, but preventing unnecessary deaths and suffering is," said WHO's Dr David Nabarro.

(Inter Press Service)


Jan 4, 2005
Asia Times Online Community



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