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HomePublicationsCatalogReconstruction after a Major Disaster: Lessons from the Post-Tsunami Experience in Indonesia, Sri Lanka, and ThailandIntroduction


The tsunami that occurred in Asia in December 2004, caused by an earthquake with an epicenter off the southwest of Sumatra in Indonesia, was one of the most destructive natural disasters in recent history. It was also a truly international disaster. The Economist described it as "the deadliest tsunami in recorded history."1

The impact of the tsunami was felt in countries in Asia and Africa, thousands of miles away from the epicenter. The exact death toll will probably never be known; however, it seems clear that almost 230,000 people died and that well over one million people were displaced (Table 1 [ PDF 13.2KB | 1 page ]).

There was an unprecedented global response to the disaster. Governments, international agencies, and millions of people across the world donated to help communities devastated by the tsunami. As one survey of the disaster put it:

The nature of the tragedy, combined with the clear and constant exposure it received through the media, led hundreds of millions of individuals around the globe to donate funding to various national and international charities and relief organisations. An outpouring of this magnitude from individuals has never been witnessed before for a single event. (Bernhard, Yritsilpe, and Petchkul 2005: 82)

Most of the affected countries were entirely unprepared for the disaster; this was not surprising. Countries like Sri Lanka had not experienced an event of this kind for millennia.2 Even Indonesia, which frequently experiences serious natural disasters, was caught unprepared.3 The tsunami exposed the affected countries and communities to unprecedented stress in terms of disaster management. The initial relief effort was widely described as remarkably successful; local communities and national governments immediately organized emergency relief operations and, helped by international agencies, quickly provided food, clean water, basic health services, and temporary shelter to those affected by the disaster. The high-profile international effort to help reconstruction and recovery was also widely hailed for its scale and generosity:

[The t]sunami recovery represents the largest ever mobilisation of donor funds for an emergency and reconstruction effort. All over the world, governments, international agencies and multilateral donors, non-government organisations (NGOs) and individuals supported the provision of humanitarian relief and reconstruction to affected areas. NGOs and the Red Cross movements alone raised over $5 billion, alongside $8 billion pledged by governments and others for recovery and reconstruction. (Schwartz 2006).

The promised funding initially appeared to be more than adequate to cover both initial relief and reconstruction. Indeed, the expected flow of international assistance was such that—as incorporated explicitly into the reconstruction plans in Indonesia—the aim was not simply to replace destroyed housing and infrastructure but, to use a phrase that was commonly heard within the donor community in Aceh at the time, to “build back better.”

Towards the end of the first year after the tsunami, the rehabilitation and reconstruction effort supported by international aid programs seemed to have been a resounding success. There was satisfaction—and more than a whiff of euphoria—in many of the early assessments based on progress reports prepared by national agencies and major international organizations. The observation by Inderfurth, Fabrycky, and Cohen (2005) captured the mood of many of these reports:

While full reconstruction may take five years or longer, if the level of commitment demonstrated by the international community is maintained, the tsunami will be remembered as a model for effective global disaster response, not just as a disaster. Because of the speed and generosity of the response, its effectiveness compared to previous (and even subsequent) disasters, and its sustained focus on reconstruction and prevention, we give the overall aid effort a grade of “A.”

However, these early ultra-rosy assessments seemed unrealistic even then. They have, by now, certainly failed the test of time.

Soon after relief operations began, problems with the relief and reconstruction effort began to come to light. In 2005, there were widespread reports of inefficiencies in the distribution of funds, unsatisfactory plans for the rebuilding of houses, slow progress in reconstruction, allegations of corruption, cost escalations, funding gaps following the slow disbursement of funds, and coordination failures. A report presented to the Prime Minister of Sri Lanka in December 2005 by Sri Lanka's Institute of Policy Studies highlighted the coordination problems that had emerged following the influx of large numbers of donors, including many newly-established NGOs. The report noted that “many NGOs lack experience and local knowledge, and in their haste to spend monies, disregard local circumstances and community needs" (Jayasuriya, Steele, and Weerakoon 2005: 17).

In July 2006, a major study prepared by the Tsunami Evaluation Coalition (TEC) reviewed the experience of the international relief and reconstruction efforts (Telford, Cosgrave, and Houghton 2006). The study observed that:

…some international agencies managed well; but many did not… Local contexts, institutions and contributions were frequently neglected. Affected people's will and capacity to move from reliance on handouts to rebuilding their lives were inadequately exploited… They were marginalised, even undermined, by an overwhelming flood of international agencies controlling immense resources. (Telford, Cosgrave, and Houghton 2006: 93)

Sri Lanka's Institute of Policy Studies report also raised the issue of the costs of the rehabilitation and reconstruction efforts. The study warned of the inevitability of major cost escalations, noting that “cost blowouts will almost certainly create funding gaps, make reconstruction tasks difficult and impose further strains on government fiscal expenditures" (Jayasuriya, Steele, and Weerakoon 2005: 53).

Subsequent developments confirmed that problems persisted despite substantial progress with reconstruction in both Sri Lanka and Indonesia. By early 2007, the impact of unexpected cost inflation was widely acknowledged in the international media and in numerous evaluations carried out by aid donors of the delivery of tsunami aid. For example, in a report to congressional committees in February 2007, the United States Government Accountability Office (USGAO) described the impact on its tsunami aid projects in the following terms:

Although both of its signature projects—one in Indonesia and one in Sri Lanka—are under way, [United States Agency for International Development] USAID has increased initial cost estimates, reduced or canceled some project activities, and may extend completion dates… In Indonesia, estimated construction cost per mile increased by 75%…; USAID reduced the length of road to be built by over one third… (USGAO 2005: cover page)

In December 2007, the World Bank tsunami website reported that in Sri Lanka:

The Tsunami Emergency Reconstruction Program I… ended on March 31, 2007. At completion, there are still about 15,000 families in need of permanent housing. These are primarily landless families, and due to this increase in housing needs, with only about $8 million remaining, additional funding would be required to complete all units of the housing program. (World Bank 2007)

The World Bank tsunami website also reported—citing sources from the Indonesian Reconstruction and Rehabilitation Agency (Badan Rekonstruksi dan Rehabilitasi, or BRR)— that 30,000 houses remained to be built (World Bank 2008a). In both Indonesia and Sri Lanka, there were reports not only of cost escalations producing funding gaps but also of institutional and procedural bottlenecks hindering the expenditure of available funds.4

This paper focuses on several aspects of the rehabilitation and reconstruction program following the 2004 tsunami in Asia. Of course, immediate relief activities are of critical importance in disaster management but they are not discussed in detail here. Neither are the political, institutional, and social factors that influence project programming in the aftermath of a massive disaster considered in any detail. Rather, the focus is on two main issues: aid delivery and reconstruction policy following a disaster.

First, the effectiveness and financing of aid delivery arrangements following the tsunami are considered. The discussion aims to go beyond the headline figures on international aid to assess the level, composition, and quality of aid flows. Second, the challenges of designing reconstruction programs in the wake of the tsunami are surveyed. Questions of why there is often inflation in construction costs and its implications are considered.5 These issues are often not discussed in the standard analytical literature.6 Our argument is that the slow disbursement of aid funds, although obviously highly undesirable in the case of urgent relief activities, may have benefits during the reconstruction phase by reducing inflationary pressures and leakage of aid funds. However, there are, of course, pros and cons to slow disbursement. We suggest that there is a need for a phased reconstruction program where the sequencing of activities is carefully prioritized.

Download this Paper [ PDF 152KB| 27 pages ].

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    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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