Endnotes

¹ "Shallow undersea earthquakes are responsible for most tsunamis though at times landslides triggered by smaller seismic events can also generate potentially lethal waves. Strong earthquakes cause a displacement of the crust. When they occur underwater, this crustal movement disturbs a large volume of water like a giant paddle and ripples spread out in all directions at speeds of 600–800 kilometers per hour, comparable to commercial aircraft. In the open ocean, they go unnoticed but once they reach shallower waters they slow down and begin to crest. The resulting waves are known as "tsunamis". They are scientifically described as a series of very long wavelength ocean waves caused by the sudden displacement of water by earthquakes, landslides, or submarine slumps and are mostly caused by earthquakes of magnitude 7.5 or greater." http://asc-india.org/menu/waves.htm)

² Historical records indicate that a major earthquake in 1615 had inflicted serious damage with large numbers of casualties. (http://www.lankalibrary.com/geo/portu/earthquake.htm)

³ Athukorala and Resosudarmo (2005) present an early discussion of some of policy issues related to tsunami reconstruction in Indonesia and Sri Lanka.

⁴ ADB (http://www.adb.org/media/Articles/2005/6618_tsunami_impact_Indonesia accessed 10/09/05); figures for Thailand are from IMF sources.

⁵ In the Northern and Eastern Provinces, average infant mortality is more than double that of the rest of the country, maternal mortality is three times as high, and almost 50 per cent of children are under-weight.

⁶ For example, while food rations were generally available, there were problems with availability of adequate varieties and quality in some locations; complaints emerged about application of different rules for the distribution of rations and cash grants from area to area (Sida, DFID and GTZ, 2005).

⁷ http://www.erd.gov.lk/devforum/Executive summary final.htm

⁸ This is available on: http://www.adb.org/Tsunami/sri-lanka-assessment.asp

⁹ The significant differences between total recovery needs and damages in some sectors are due to the fact that recovery strategy for those sectors focuses on long term development targets rather than merely on restoration.

¹⁰ GOSL (2005), "Post Tsunami Recovery and Reconstruction Strategy", May 2005

¹¹ Indeed, it is not impossible—at least in principle—for short term GDP to even increase in the wake of a major catastrophe.

¹² This type of behavior is known as 'consumption smoothing' and is implied by the ‘permanent income hypothesis’ of consumer behavior.

¹³ TAFREN (2005), "Rebuilding Sri Lanka: Post-tsunami Reconstruction and Rehabilitation" June 2005.

¹⁴ Consumer rejection of fish immediately after the tsunami has also been observed in other tsunami-affected locations such as Indonesia.

¹⁵ TAFREN (2005), "Rebuilding Sri Lanka: Post-tsunami Reconstruction and Rehabilitation" June 2005.

¹⁶ TAFREN (2005), "Rebuilding Sri Lanka: Post-tsunami Reconstruction and Rehabilitation" June 2005.

¹⁷ This section is largely based on the paper presented at the workshop by Kaml Kapadia on "Reviving livelihoods after the tsunami: identifying gaps in existing programmes."

¹⁸ The potential role of microfinance in such situations is documented in a growing literature. See, for example, Mathison (2003) and ILO (2005).

¹⁹ There are also non-financial services required to help the poor develop new skills and access markets so that they can put microfinance to good use. There may also be problems accessing credit for those who are not already members of revolving credit societies.

²⁰ Buffer and 'set back' zones are both ways to create space between human development and the coast. They do not reduce the affects of hazards such as tsunami waves but are designed to move the population away from hazardous areas. Such zones facilitate costal eco-system conservation by restricting certain types of human activities, which may, among others, have beneficial effects on wave damage. A coastal setback has been defined as "a prescribed distance to a coastal feature, such as the line of permanent vegetation, within which all or certain types of development are prohibited" ("Coastal Zone Management Plan Sri Lanka 2004": Coast Conservation Department, Government of Sri Lanka). For a discussion of buffer zones in developing countries, see Ebregt and De Greve (2000).

²¹ In addition, households that have successfully utilized the grant will be eligible to apply for a concessionary loan of Rs.500,000 from the 2 state-owned commercial banks.

²² Since it became clear that there is considerable inequity in providing the same sum of money to rebuild houses with broken windows as against those houses that have suffered greater damage (even though the damage is less than 40 per cent), a new one-off payment of Rs.50,000 (US$500) is being considered for those whose house damage is less than 20 points according to the damage verification system.

²³ Daily News, 02/02/05.

²⁴ In fact, a survey conducted by the IPS found that three-quarters of households within the designated buffer zone do not wish to rebuild on the same site (IPS, 2005).

²⁵ The figures for total houses destroyed vary. For example, other GOSL estimates suggest that the number of houses destroyed is over 99,000 (GOSL (2005b)).

²⁶ THRU MOU for Housing 'Donor' (available from the Urban Development Authority).

²⁷ World Bank website (accessed 07/09/05)

²⁸ See, for example, Foreman and Patrick (eds.) (2000). Cuny (1983) for an earlier review of this issue, which suggests that this is not a new phenomenon. For some of the political economy aspects, see also bala-Bertrand, J.M., (1993) The Political Economy of Large Natural Disasters: With Special Reference to Developing Countries, Oxford, United Kingdom; Clarendon Press.

²⁹ For example, of 506 vehicles imported for tsunami work, 290 were released to NGOs (GOSL, 2005c).

³⁰ Under-utilized aid refers to commitments of aid for a particular period minus disbursements of aid for the same period (in absolute terms).

³¹ GOSL (2005), "Interim Report of the Auditor General on the Rehabilitation of the Losses and Damages Caused to Sri Lanka by the Tsunami", September 2005.

³² Estimates of the extra demand for house construction vary, but they all indicate a massive increase in demand for scarce construction labor and materials (See TAFREN (2005), "Rebuilding Sri Lanka: Post Tsunami Reconstruction and Rehabilitation", June 2005). According to the Chamber of Construction Industry as reported the Daily Mirror, February 21, 2005, it is estimated that at least 100,000 additional workers will be required; this includes about 13,000 masons, 2,000 carpenters, 2,500 painters and nearly 54,000 unskilled laborers.

³³ Monetary authorities have been slow to respond by raising interest rates for fear of further slowing down the growth momentum. The benchmark rates were revised upwards only in November 2004 by 50 basis points. A marginal increase of a further 25 basis points followed in May 2005 and a more appropriate upward adjustment of 50 basis points in June 2005. Despite the latter adjustment, Sri Lanka has experienced negative real rates of interest since the second half of 2004.

³⁴ In general, when countries get large capital inflows, they tend to experience Dutch Disease effects to varying degrees because some sectors and industries tend to have their profitability increase as well as spending effects raise prices for their outputs, while others experience only the resulting cost increases. See Corden and Neary, 1982, and Corden, 1984 for expositions of the basic analytical model.)

³⁵ The assumption is that the recipient country is a 'small' country in world markets, so its international transactions do not have a significant impact on world market prices.

³⁶ In Sri Lanka authorities can intervene in foreign exchange markets not only directly through Central Bank transactions, but also using the resources of the two state owned commercial banks which dominate the commercial banking sector.

³⁷ See Benson and Clay (2004)

³⁸ http://www.recoverlanka.net/background/hazards.html

³⁹ A detailed discussion of the requirements of an early warning system co-authored by Rohan Samarajiwa and Ayesha Zainudeen (LIRNEasia),Malathy Knight-John (IPS) and Peter Anderson (Simon Fraser University, Canada) is available at http://www.lirneasia.net/wp-content/news-sl.pdf

⁴⁰ Freeman, Keen and Mani (2003: p.24). They go on to point out that this reluctance will be stronger if donor’s are expected to bear part of the costs if a disaster does occur. There is a large and growing literature on economic issues related to managing disaster risk, following the seminal contribution of Dacy and Kunreuther. (1969). See also Kunreuther and Roth Sr. (1998). Some of the literature relevant to developing countries is reviewed and discussed in Freeman, Paul K., Michael Keen and Muthukumara Mani (2003) and Benson and Clay (2004).

The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms..

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