Post-Tsunami Aid Is an Opportunity for Region to Address Inequities, Says Expert on South Asian Economies

BUFFALO, N.Y. -- The influx of foreign aid to areas hardest hit by the Indian Ocean tsunami presents an opportunity for the region to address long-standing economic inequities, according to Jessie P.H. Poon, Ph.D., associate professor of geography at the University at Buffalo.

At the same time, she warned, the history of foreign aid to some of the developing countries affected by the disaster -- Thailand, Malaysia, Indonesia and Myanmar -- and its overall impact on these economies has been mixed.

She noted that the tsunami only magnifies the troubles of areas like Banda Aceh, the Indonesian city nearest to the epicenter, which has had its share of turmoil throughout its history.

"Since the Dutch occupation in the 19th century, Banda Aceh has experienced little peace," she said, "and in the past four decades, it has struggled for territorial autonomy, which has not exactly endeared the area to the Indonesian government, so it remains to be seen how economic and political reconstruction will proceed.

"The good news is that the newly elected Indonesian president seems more willing to work at peace in the region," she said. "The spotlight on the disaster in this area may precipitate that process."

Poon added, "This is a good opportunity for domestic governments to focus on improving local economies in the region.

"But the tsunami will exacerbate regional inequities unless the aid is targeted to restore some level of material infrastructure and to create employment that will enable people to participate productively in the economy," she continued.

"Provided the disaster aid is not squandered on white elephant projects, as it sometimes has in the past with development aid, then its immediate impact should be to rebuild badly needed infrastructure, such as roads, electricity, water supply," she said.

She agreed with other observers that the short-term economic impacts are more local than national.

"For example, the predicted economic growth for Thailand for 2005 has been reduced only to 5.7 percent from 6 percent, still pretty good considering that many European countries have lower growth rates," she said.

However, she noted, the economic life of some areas simply has been wiped out.

"Hundreds of otherwise self-sufficient farming and fishing villages at near subsistence levels now are without any means of livelihood," she said.

And while small island economies, such as the Maldives, have been completely destroyed, she said that she thinks the impact is greatest in Indonesia.

"With more than 150,000 dead, Indonesia has got to be the worst hit," she said. "No natural disaster in southeast Asia in recent history came close to this number. Krakatoa, the volcano that erupted there in 1883, caused about 36,000 deaths."