The tsunami that so cruelly stole Christmas for so many in South Asia and around the globe remains mind-boggling in terms of the loss of life. But as the waves of horrific news begin to recede a bit, the economic pain -- at least by some measures -- may not be as severe as initially anticipated. From the Times:
"In the economies of Sri Lanka, Indonesia, India, Thailand and the other affected countries, the tsunami is likely to register more as a small wave, because the two industries most heavily hit -- tourism and fishing -- make up small percentages of the overall economy.
"Even as it has destroyed the livelihoods of millions of families in South Asia, the tsunami will shave only a few points off the region's economic growth this year. Depending on the importance of tourism in each country, the decrease is expected to range from less than 1 percent for Thailand to 2 percent for Sri Lanka and 4 percent for the Maldives, according to estimates by Standard Chartered Bank.
"Aceh, which bore the brunt of the tsunami damage in Indonesia, accounts for only 2 percent of Indonesia's economy. The tsunami apparently did not damage the region's most lucrative properties, oil and gas production facilities.
"Thailand's economy is expected to grow about 6 percent in 2005, about the same as in 2004. Tourism in southern Thailand around Phuket, the only part of the country affected, accounts for about 1.3 percent of the national economy."
Obviously, that's little consolation for all those experiencing the acute loss and suffering of the catastrophe. And the notion of a relatively less painful economic recovery also banks on enormous amounts of aid pouring in in a timely manner and being put to effective use.
"Already, much of the Phuket tourism has been rerouted to other Thai resort towns, and the damaged beach towns could well see a construction boom as up to $2 billion is expected to be invested to rebuild beachfront hotels, homes and shops. But Peter Harrold, the World Bank's country director for Sri Lanka, cautioned against using gross domestic product as the only measurement of the economic impact of the disaster. The loss was huge in houses, boats, ports, hotels, clinics, roads and railways, he pointed out, and all will have to be rebuilt. 'Overnight, a huge capital stock was wiped away,' he said.
"Most affected businesses and individuals along the rim of the Indian Ocean do not have insurance coverage for the kind of disaster they encountered a week ago. How much, or even whether, they will be compensated by their governments or through outside aid remains unclear."
Logistics with immediate relief aid alone have already proven to be a problem.
"All too often, a surplus of good intentions leads to relief agencies tripping over one another in what Raymond C. Offenheiser, president of Oxfam America, has called 'the anarchy of altruism' that produces waste, duplication and frustration. There are already reports of unwanted clothing and other supplies piling up in the Indian state of Tamil Nadu, and one aid worker in Sri Lanka said the country has a surfeit of doctors at the same time it desperately needs water purification systems."
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