A ripple in development? - Channel Research

3.5 Macro-economic recovery and households
in Sri Lanka and the Maldives
In this section we are discussing together the situations that occurred in
the Maldives and in Sri Lanka. Although the countries have had a very
different experience of the tsunami, we found in our research that the
patterns concerning livelihoods and interactions with international
cooperation and national authorities. These patterns afford us some
useful generalisations.
In Sri Lanka, after shelter reconstruction, which accounted for
45% of the total, money allocated for livelihood restoration and recovery
constituted the second largest component of donor funds. It represented
for example 18% of the UK NGO Disaster Emergency Committee’s
total post-tsunami expenditure in 2007. The bulk of these funds
was disbursed towards asset replacements. This focus is highly relevant
to the needs on the ground as, apart from housing and shelter, infrastructure
has been generally less affected than in other tsunami affected
areas in the sub-region (mainly because of lower density), and overall
economic growth was (surprisingly) little affected.
In the Maldives, total damages incurred after the tsunami were
estimated to be about US$ 470 million, approximately 62% of GDP,
making it one of the hardest-hit countries in overall macroeconomic
terms, with the tourism, fishing, housing and transport sectors being the
worst affected 43 . Nearly 5% of the population was forced to evacuate
their homes and were placed in temporary shelters with their homes
and property destroyed 44 .
The impact on the largest sector of the Maldivian economy, namely
the tourism sector (which contributes over 33% of GDP) was estimated
to amount to a loss of 30% or US$55 million in industry contribution
to 2005 GDP and 10,440 jobs 45 . However, the sector also proved to be
remarkably resilient and was able to recover far more quickly than the
other affected sectors due to easy access to a combination of insurance,
government and private sector funds for recovery and reconstruction
and a slow but steady rise in tourist numbers to pre-tsunami levels.
In Sri Lanka however, the severity of the impact on the economy
was considerably less with overall damage from the tsunami being estimated
at 7–7.3% of GDP 46 . As Mulligan and Shaw (2007) point out,
“Initial predictions that the tsunami would shave more than a percentage
point from GDP growth proved excessively pessimistic”, and in fact
GDP growth increased from 5.4% in 2004 to 6% in 2005 (Central Bank
of Sri Lanka 2006), some of which may of course be the volume of
assistance coming in.
43
ADB, UNDP and World Bank, Maldives Tsunami Disaster Needs Assessment, 2005
44
Ministry of Gender, Family Development and Social Security, 2005
45
World Travel and Tourism Council, 2005
46
ADB et al., 2005, p.5
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