Emad Mekay

WASHINGTON, Dec 30 2004 (IPS) — The world is rallying to aid countries and lives damaged by the earthquake and tsunamis that have killed more than 120,000 people in Asia and Africa, injuring three or four times as many, but few 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 Sunday, triggered by a massive earthquake with its epicentre off the west coast of northern Sumatra in Indonesia. Bangladesh, Burma, 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, in a statement Wednesday.

“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, harbours 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 Burma 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 say they would consider adjusting some of Indonesia’s huge loans, while the bank said Thursday it will offer 250 million dollars 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 Jan. 12.

But on Thursday, the focus was still on saving lives. The World Health Organisation (WHO) said that between three and five million people in the region are unable to access the basic requirements they need to stay alive. Services like clean water, adequate shelter, food, sanitation and healthcare are lacking, it added, calling for immediate assistance of 40 million dollars.

“This is the most serious natural disaster to affect the region for several decades. The health needs of the populations affected are immediate and substantial,” said WHO Director-General Dr Lee Jong-wook, in a statement.

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,” added WHO’s Dr David Nabarro, in the same release.

The United Nations says between 50 and 60 donor nations are now taking part in the massive relief efforts. It asked for 127 million dollars late on Wednesday for Indonesia, Sri Lanka and the Maldives.

An official from the world body had earlier accused western nations of stinginess in their response to the emergency needs. By early Thursday, Spain has pledged 67 million dollars, Japan 40 million, the United States 35 million, Canada 33 million, Britain 29 million, Germany and Australia 27 million and France around 20 million dollars.

Saudi Arabia had promised 10 million dollars, although one Saudi prince alone, el-Walid bin Talal, pledged that amount for the City of New York after the terrorist attacks of Sep. 11, 2001.

On Thursday the ‘New York Times’ asked in an editorial ‘Are We Stingy’? The newspaper answered ‘Yes’, and defended earlier comments by U.N. Emergency Relief Coordinator Jan Egeland, who had called rich nations’ overall aid efforts “stingy.”

U.S. President George W Bush, who emerged from a holiday at his Texas ranch, reacted angrily to the comment, which followed an initial U.S. pledge of 15 million dollars.

“The person who made that statement was very misguided and ill informed,” Bush said Wednesday. But the Times editorial countered, “Mr Egeland was right on target.”

The current U.S. pledge of 35 million dollars “remains a miserly drop in the bucket, and is in keeping with the pitiful amount of the United States budget that we allocate for non-military foreign aid,” added the newspaper.