The first considered estimates are starting to be made of the economic cost of the tsunami that struck coastlines around the Indian Ocean. The total is likely to be about 10 billion euros, which in financial terms is tiny compared with the human suffering.
Operators of hotels destroyed or damaged in Thailand met Finance Minister Somkid Jatusriptitak, who has promised tax help and loans at preferential rates. He said: “We have provided them so many packages. All the lending and also tax breaks. So I think we have done a lot.”
Economists estimate the disaster could cut Thailand’s economic growth by 0.7%, with a 2% fall in growth in Sri Lanka and by 4% in the Maldives. However the figure of 10 billion euros economic damage, which is an estimate from Munich Re, is well below the cost of the World Trade Centre terror attacks at 15.5 billion euros and even last year’s hurricanes in the Caribbean, which cost 20 billion euros.
For hoteliers whose businesses were devastated along Thailand’s southwestern beaches, government promises of financial help are not enough.
Giorgio Gomps says he needs cash to get back in business: “I count what I have in hand and not what’s up in the sky. I have nothing in hand up to now. OK, it sounds encouraging, but I am very sceptic, because I am realist. Money is not growing in heaven, money is printed on earth.” The main impact will be on the region’s fishing industry as well as tourism, but an economist with JP Morgan said he actually expects it will suffer less financially than it during the SARS epidemic in 2003 and he added the turnaround should be faster this time.