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The Macro-Economic Consequences Of The Tsunami In South-Eastern Asia

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Introduction

The Macro-Economic Consequences Of The Tsunami In South-Eastern Asia The Macro-Economic Consequences Of The Tsunami In South-Eastern Asia During the course of this essay I will illustrating the macro-economic consequences of the catastrophic tsunami that hit South-Eastern Asian coastlines in December 2004. Figure 1: The Indian Ocean earthquake was an undersea earthquake that occurred on December 26, 2004. The earthquake generated a tsunami that was among the deadliest disasters in modern history. At a magnitude of 9.0, it was the largest earthquake since 1964. The earthquake originated in the Indian Ocean, off the western coast of northern Sumatra, Indonesia. The resulting tsunami devastated the shores of 11 countries in South-Eastern Asia (refer to figure.1) with waves reaching 50 feet high. At least 160,000 people are known to have died as a result of the tsunami, and the count not yet complete. The true final toll may never be known due to bodies being swept out to sea. Relief agencies warn of the possibility of more deaths to come as a result of epidemics caused by poor sanitation. Natural disasters on this scale have less visible, but critically important, economy-wide (macro-economic) effects. This is the consequence of the impact of damage to productive sectors (fishing and tourism for example) ...read more.

Middle

The tsunami is what insurers fear most: a low-frequency, high-consequence incident that causes extensive, costly damage with very little way to predict where and when it will occur. The insurance industry was not having a good year to begin with, following four hurricanes in Florida. However, since the insurance market is not as well developed in the areas affected by the tsunami, and because property values are lower, the industry will not suffer as it has for other major disasters. For example, Hurricane Andrew cost insurers $18 billion to $19 billion; the terrorist attacks on the World Trade Centre could cost more than $40 billion. Early estimates indicate insurers may be liable for about $10 billion as a result of the tsunami. (See Appendix.) However all is not bad news as many of the large global companies were paid premiums in dollars at a time when the currency was valued higher than it is now. Appendix 1. The Bank of Thailand (Central Bank) has released some preliminary estimates on the economic impact of tsunami: - Tourism business of the six affected provinces normally worth about 78 billion Baht (USD 2,000 millions) per year, or 1.3 % of GDP. The impact of the disaster on the GDP could stand at around 0.1 % per month. ...read more.

Conclusion

Bangkok Joe's Dumpling Bar and Caf´┐Ż owners Mel Oursinsiri and Aulie Bunyarataphan, both from Thailand, are offering customers a tasty way to aid the millions affected by the recent tsunami in Asia. For a three week period, for every three-course lunch and dinner menu ordered, the restaurant will donate five dollars to the Royal Thai Embassy, Washington, DC's tsunami relief fund. T.H.A.I. in Shirlington, Bangkok Joe's sister restaurant, will donate five dollars to the relief fund every time a guest orders the restaurant's monthly special during January. 2. On 9 January 2005 at 4 p.m., the American Jewish Committee is joining with local civic religious and ethnic leaders, as well as diplomatic representatives, for a special prayer service. "A Jewish Memorial Service for Tsunami Victims" at Adas Israel Congregation, 2850 Quebec Street, NW. Attendees include Deputy Defense Secretary Paul Wolfowitz, a former ambassador to Indonesia; Ambassador Soemadi Djoko M. Brotodiningrat of Indonesia; Ambassador Ronen Sen of India; Ambassador Devinda Rohan Subasinghe of Sri Lanka; Ambassador Kasit Piromya of Thailand; and Ambassador Danny Ayalon of Israel. Prayers will be led by religious leaders from the Jewish, Muslim and Buddhist faiths. 3 3. On 9 January 2005 at 16.00 hrs., the Royal Thai Embassy and Thai Christian Community, Washington D.C. will hold a memorial service for the tsunami victims. 4. On 8 January 2005, the Thai Community in Dallas, Texas will organized a fundraising event to help the tsunami victims at Sterling Hotel, Dallas, Texas. ************************* ...read more.

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