Tsunami: economic cost pales against human toll

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: There are few people in the world today who don’t comprehend the extent of the disaster that struck on the morning of December 26, 2004. The pictures flashed on television screen are constant reminders of the 150,000 that perished and millions rendered homeless. Now, with the debris finally settling over the horrors, people are beginning to assess the scope of the damage. What has become clear is that, above all else, the earthquake and ensuing tsunami are a tale of human tragedy. The economic and financial impacts fade in comparison.

There is, of course, the widespread destruction wreaked by the tsunami. India has pegged its cost at over $2 billion. Thailand estimates it at about $510 million. Insurance companies in affected areas will pay out hundreds of millions or possibly a few billion in compensation. A small amount when you consider the fact that the hurricane in Florida single-handedly cost America $20 billion.

In the case of the tsunami, sadly, many of the most needy will probably not get any remuneration, which only serves to underline the poignancy of the situation. Tourism will suffer — several of Southeast Asia’s most popular tourist spots were hit. With 12 million visitors coming to Thailand annually, they account for 6% of the nation’s GDP. In the Maldives, half of the country’s earnings come from tourism. In Sri Lanka, tourism was the fastest growing sector.

India was fortunate in that the major beach resorts are located on India’s western coast and remained unscathed. Nevertheless, the repercussions are expected to be only near-term. Many analysts believe that the spending to re-build hotels and infrastructure will offset some of the loss of tourism receipts.

Infectious disease outbreaks, like Severe Acute Respiratory Syndrome and avian influenza had a much greater long-term impact on visitor arrivals. Even in Indonesia, which saw the highest number of deaths, the damage to the economy was much more controlled than what it could have been. For example, the country’s oil resources have been saved. Indonesia is the world’s largest exporter of liquefied natural gas and the Arun natural gas fields were not hit.