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Last Updated: Wednesday, 29 December, 2004, 05:49 GMT
Quake's economic costs emerging
Survivors in India wait for clothes from aid workers
Many survivors have been left with nothing
Asian governments and international agencies are reeling at the potential economic devastation left by the Asian tsunami and floods.

World Bank president James Wolfensohn has said his agency is "only beginning to grasp the magnitude of the disaster" and its economic impact.

The tragedy has left more than 60,000 people dead, with Sri Lanka, Thailand, India and Indonesia worst hit.

Some early estimates of reconstruction costs are starting to emerge.

Millions have been left homeless, while businesses and infrastructure have been washed away.

Blow to growth

Economists believe several of the 10 countries hit by the giant waves could see a slowdown in growth.

First and foremost this is a human tragedy
Glenn Maguire, Societe Generale

In Sri Lanka, some observers have said that as much as 1% of annual growth may be lost.

For Thailand, that figure is much lower at 0.1%.

Governments are expected to take steps, such as cutting taxes and increasing spending, to facilitate a recovery.

The World Bank, which provides about $20bn a year in development aid to the world's poorest countries, said it was in talks with a number of countries including Sri Lanka and Indonesia about redirecting existing loans to the rebuilding process.

Indian fisherman walk past a destroyed house and boat
The damage to life and property has been on a massive scale

"With the enormous displacement of people...there will be a serious relaxation of fiscal policy," Glenn Maguire, chief economist for the region at Societe Generale, told Agence France Presse.

"The economic impact of it will certainly be large, but it should not be enough to derail the momentum of the region in 2005," he said.

"First and foremost this is a human tragedy."

India's economy, however, is less likely to slow because the areas hit are some of the least developed. The regional giant has enjoyed strong growth in 2004.

But India now faces other problems, with aid workers under pressure to ensure a clean supply of water and sanitation to prevent an outbreak of disease.

Tourism and fishing

Thailand's Prime Minister Thaksin Shinawatra has estimated the destruction at 20bn baht ($510m).

Analysts said this figure is likely to rise and the country's tourist industry is likely to be hardest hit.

Thailand's fishing and real estate sectors will also be affected by Sunday's 9.0 magnitude earthquake, which sent huge waves from Malaysia to Africa.

Malaysia said as many as 1,000 fishermen will be affected and that damage to the industry will be "significant", Agence France Presse reported.

Rapid rebuilding will be key to limiting the impact of the tragedy.

"In three months, we should rebuild 70% of the damage in the three worst hit provinces," said Juthamas Siriwan, governor of the Tourism Authority of Thailand.

The outlook for Sri Lanka is less optimistic, with analysts predicting that the country's tourist industry will struggle to recovery quickly.

Tourism is a vital to many developing countries, providing jobs for 19 million people in the south east Asian region, according to the World Travel and Tourism Council (WTTC).


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