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Tsunamis likely to put 2m more Asians in poverty

AFP, Manila
The earthquake and resultant tsunami tiiat devastated Indian Ocean countries last month will likely throw nearly two million more people into poverty in Asia, the Asian Development Bank said in a report Thursday.
In Indonesia, worst hit in the December 26 disaster with more than 106,000 dead, nearly one million people are likely to be plunged into poverty by the lingering effects of the tsunami's devastation, the report said.
According to the ADB’s key indicators for the region some 111 million people in Indonesia now live on two US dollars a day.
In India the number of poor was estimated to increase by 6-15,000, with Sri Lanka's estimate at 250,000, it said.
About half of the houses in the Maldives were affected and about half the population of around 287,000 could fall below the poverty Une, it said.
The increase in poverty from the disaster, which kiUed nearly 160,000 people in Asia and Africa, will be "enormous" but the economies of the region should cope, the Manilabased bank's chief economist Ifzal Alisaid.
"As devastating as the disaster is to the people in affected areas, Asia's residence to external shocks will play a role in minimizing the impact the disaster will have on the region's overall economic growth," AU said.
"This is a profoundly tragic event
for the region and for the millions who are suffering. But the economies of the affected countries except Sri Lanka and the Maldives should emerge with minimal damage," he said.
In Indonesia, India and ThaUand the damage was largely confined to rural areas rather than key economic and densely populated urban centers and industrial hubs that drive regional growth, the report said.
In Indonesia, the damage is concentrated in Aceh province, which accounts for two percent of Indonesia's overafi GDP.
The report said the oU and natural gas facilities in the area appear to have survived intact
In India, the economic impact should be minimal as weU due to the huge size of the country's economy. The macroeconomic impact is also expected to be minimal in Bangladesh, Malaysia and Myanmar.
"In Thailand, the damage was centered on southern resort areas that contribute about three percent to the country's GDR" the report said.
"The greatest risk to the country's economy comes from the possibility of tourists perceiving ThaUand as an unsafe destination.
"The rest of the country should not be affected unless there is some son of negative perception about the country's safety that leads to a domino effect," the report said.
The report noted the region is well positioned to withstand such
economicshocks.
"Following strong growth from 2001 to 2004, the economies of India, Indonesia, Malaysia, and Thailand should be in a strong position to overcome the tragedy.
"For these countries, recent growth has been strong, fiscal positions have improved, and external reserves are high, with the shock absorber of the disaster coming from the government's fiscal position," theADBsaid.
ft noted that the tragedy could also provide a surge of economic activity in the region that could have positive long-term effects.
"Reconstruction from natural disasters requires new investment that should have a positive impact. And investment should translate into jobs.
"The aid process has already increased demand for a range of domestic goods and services, including food, water, medicines, buUding materials and clothing, as weU as transport and communication services, which will benefit a numberofdomestic businesses.
"Therefore, it is possible that the overaU impact could weU end up being somewhat positive," the report said.
"From an economic standpoint, the tsunami disaster should be seen in the context of other disasters that havehitAsia, the report noted.
"Historically, Asia has been subjected to regular shocks and its countries have always responded swiftly and pragmatically.