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The Tsunami's Tragic Toll


At this time of year, the southern Thai beach resort of Ao Nang is normally brimming with carefree tourists swimming, diving, sunbathing, and dining in casual waterfront restaurants. But in the aftermath of the tsunami that killed tens of thousands of people around the Indian Ocean, that festive atmosphere has disappeared.

Dozens of bystanders look on as divers bring in the remains of people killed by the waves. The fleet of tourist boats lies in ruins. And Duang Jai Na Vong remembers clinging to metal rods on the ceiling in his restaurant to keep from being swept away by the waves. "The water just didn't stop," he says. Now he has to worry about getting his business back on its feet: "It's going to take two or three months to repair the damage, which takes us almost to the end of the [peak] season."

The Dec. 26 tsunami is above all a tragedy for the region's poorest citizens. Two days after the wave struck, the death toll in India, Indonesia, Sri Lanka, Thailand, and other Asian nations topped 50,000. In Sri Lanka, about 1.5 million people -- 7.5% of the population -- were left homeless or lost their livelihood. In Indonesia, more than 16,000 people perished -- mostly poor residents of isolated coastal communities. In India, fishing villages in the southern state of Tamil Nadu were wiped out by the waves. Many villages "had no protection," says Abraham Tharakan, president of the Seafood Exporters Association of India, who visited some of the hardest-hit areas the day after the disaster. "It's all debris."

The economic cost will be huge, too. The total price for rebuilding will likely top $10 billion, according to insurer Munich Re. Seaside communities will struggle from the loss of hundreds of thousands of homes and small businesses. The Thai island of Phuket, which depends on booming business during the Christmas and New Year holidays, faces months of rebuilding, and many tourists are canceling. Hotels fear that visitors may not come back for the key lunar New Year holiday in February. Madras, India's fifth-largest city, may suffer power shortages after the tsunami caused a nuclear power plant to be shut down. And governments across the region, already strapped for cash, now face the expense of relief and reconstruction. "It's huge, a scale not experienced in Asia since World War II," says Bob Broadfoot, managing director of Political & Economic Risk Consultancy Ltd. in Hong Kong. "There's going to be an immediate strain on social welfare systems."

BACK IN BUSINESS

Still, the tsunami won't likely do much to slow the broader Asian economy. Brokerage Credit Suisse Group (CSR) estimates that over the coming year the tsunami may cut growth in Thailand by about a half-point, and in Indonesia by a quarter-point. But Asia's major industrial areas were largely unaffected, so most commerce will continue uninterrupted. "This is a tragic but one-off event," says T.J. Bond, a senior economist with Merrill Lynch & Co. (MERR) in Hong Kong. "Catastrophes like this have an impact for one or two quarters."

Indeed, Thailand is already trying to get out the message that its resorts are back in business. Destinations that were little damaged by the tsunami were accepting new guests within 48 hours of the disaster. "We're open as usual," says Preecha Chuenpakdee, marketing manager for Kata Group of Resort Hotels, which runs three hotels in Phuket. Still, there's plenty of hardship ahead, and a lingering atmosphere of fear: Two nights after the tsunami struck, a rumor spread through Ao Nang that another wave was on the way, leading to a near-stampede as panicked diners fled beachside restaurants. The hope is that the fears will subside soon enough to give the region a chance to start rebuilding.

By Ian Rowley in Ao Nang, and Bruce Einhorn in Hong Kong, with Vaudine England in Bangkok, and bureau reports


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