It would have been reasonable, upon hearing the news of the earthquake-induced tsunami that devastated South and Southeast Asia on December 26, to wonder at the unfairness of disasters so often striking those countries that are least equipped to deal with them. Bangladesh and China are flood prone; severe earthquakes have recently struck Central America, Turkey, India, Algeria, Afghanistan and Iran. Although Southeast Asia has been spared dramatic floods, cyclones or earthquakes in the past several years, the region suffered prior to the tsunami from multiple occurrences of avian flu, outbreaks of Severe Acute Respiratory Syndrome (SARS) and devastating terrorist attacks.
The strongest immediate impact of the tsunami will of course be felt in the staggering numbers of people lost: at least 160,000 in Indonesia, 31,000 in Sri Lanka, 10,000 in India and 5,000 in Thailand, according to the government figures available in mid-January. One could easily imagine that the indescribable human tragedy would be compounded by an economic one: A country like Indonesia that has slowly struggled to rebuild its economy after the regional financial crisis of 1997-98 suddenly sees years of effort undone in the space of a single day. Natural disasters are profoundly humbling in their ability to take lives and leave survivors utterly impotent--but their effect on economics is far more restricted. Good governance, planning and intervention can ensure that survivors do not suffer economically as well as emotionally. In this case, it is largely the generosity of rich countries that will ensure that, however the humanitarian crisis plays out, the economic damage from this disaster will be relatively short lived. To be effective, foreign assistance will have to be nuanced. Rich countries' offers of loans, grants and debt suspensions will vary by country, since the nations affected by the tsunami have vastly different economies.
