Tsunami catastrophe: Economic effects on Presidential poll
History provides us with examples of nations struck with near complete disaster rising from their ashes. Japan and Western Germany after the war are clear illustrations of these.

There were expectations that we could convert this massive disaster of the tsunami into an opportunity for national reconstruction in economic and political terms. The vast amount of aid committed by donor countries, NGO assistance and the excellent response of our civil society led hope to such expectations. These hopes have been more or less dashed to the ground.

After ten months, there are still people living in unlivable tents and so-called transitional homes, still awaiting a proper roof over their heads. It is a demonstration of government bungling. Inefficiency, ineptitude and the results were inevitable in a highly politicised country that could not unite for the good of the affected people.

The human tragedy left behind by the terror waves was unprecedented. Its enormous economic costs and consequences were mind-boggling. Though the precise economic costs are too difficult to estimate, that they are huge is irrefutable.

There were basically three types of costs arising from the disaster. The first was the dislocation of economic activities, like farming, fishing, transport and communications. Their contributions to the national output would be seriously affected. The second are the costs of rehabilitation and expenditure of the displaced persons. Third was the cost of repair and reconstruction.

Fishing
In terms of economic sectors, the most seriously hit was the country's fishing industry.

In the last two decades, the fishing industry in the Northern and Eastern waters was adversely affected by the war. Just as the revival of fishing in this area was taking place, a more widespread disaster encompassing nearly the entirety of the fishing community in the island occurred. The destruction to the fleets of boats on both the western and eastern coasts was colossal. In 2002 marine fish production reached 273,000 metric tons, but declined to 255,000 metric tons in 2003. Last year's production before the tsunami struck was high. This year's marine fish production is likely to drop sharply.

The costs of repair, restoration and purchase of new boats, motors and fishing gear would indeed be a massive investment. Yet the reconstruction of the fishing industry and its modernisation to enhance its productive capacity is a vital economic and social need. In recent years fishing has contributed around 1 percent to the country's GDP. The country is about 80 per cent self sufficient in fish and also exports a small quantity. The industry’s revival and growth depends on the infrastructure development and the rehabilitation of the fishing community.

Tourism
The booming tourist industry was also hit by the December 26 catastrophe. In 2003, tourist arrivals exceeded the 500,000 mark. In 2004 tourist arrivals reached around 560,000 as there was a 12 per cent increase up to end October.

The year that recorded the highest tourist arrivals and foreign exchange earnings witnessed the worst destruction. Many hotels on the coastline are in various levels of devastation. It is a double blow as the repair of the hotels and accommodation would be an enormous capital cost that has to be carried out in a bleak year for tourism.

No doubt both the lack of accommodation and the fears generated by the devastation would mean that there would be a huge dip in tourist arrivals not merely to Sri Lanka, but the region as a whole. The setback to the tourist industry would also affect financial institutions that would require to be of future assistance.

Agriculture
Agriculture that contributes about 16 per cent to the GDP is less affected. While agriculture in the hinterland, tea, rubber and many food crops have not been harmed, paddy cultivation especially in the North and East would be seriously impaired and the next Maha paddy crop will see a further decline.

The paddy-growing region in the East is one of the most productive with paddy yields rising to around 10 metric toms per hectare compared to the national average yield of 3.9 metric tons per hectare.

Apart from the immediate destruction of the standing crop, the tidal waves could have an adverse effect on the soil conditions. This would affect paddy cultivation adversely. The danger of salinity in the soils remains the latent threat to the cultivation of these paddy lands.

Rehabilitation
The devastation of fisheries harbours, roads and railways would have a serious impact on production and exports. The reconstruction of economic infrastructure has been expensive, arduous and protracted. However, the reconstruction of the southern railway line speedily was one of the finest achievements of the railway.

There is an urgent need to provide for housing and drinking water to enable people to resume their economic activities. It is in housing that the government failed — and worse still was a hindrance to civil society and NGOs constructing houses owing to the politicisation of the reconstruction.

The initial phase of rehabilitation would have to be followed by a longer sustained phase of reconstruction of the devastated areas. The reconstruction of these areas provides an opportunity to improve the townships and villages, improve housing and sanitary conditions and upgrade the road and rail network.

The reconstruction could be an opportunity for the remodelling and modernizing of the devastated regions. It is a massive task requiring sacrifices from the entire populace.However much people contribute, it would be inadequate to rebuild the country. Generous assistance from foreign countries and international organisations are absolutely essential.
If the reconstruction of the North and East required US$ 4.5 billion over three years, then the reconstruction of the extensive area of disaster would need perhaps a three fold.

The reconstruction of the North and East was hampered by the inability to achieve peace. A much larger sum requires to be committed by the international community without any preconditions except the implementation of a reconstruction plan.

The failure of the government to respond effectively to the human tragedy would no doubt be a factor in the coming Presidential election. What could have been a golden opportunity for the government has been a lost one. The voting in the elections would disclose some of the responses to the government's reconstruction programme.

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