Finance & Accounting
Pages 16 (4016 words)
A Study on the Impact of Natural Disasters on the Natural Economy: The Case of the Tsunami Disaster on Indonesia 1. Introduction Indonesia is located in Southeast Asia with its 18,108 islands covering about five million square kilometres between Indochina and the Indian and Pacific waters (Lucich, Dal Bon, and Houston, 2007).
This remains one of the highest casualties from a natural disaster since recorded history (Lucich, Dal Bon, and Houston, 2007). The tsunami deaths covered Indonesia, Thailand, and the north-western coast of Malaysia, also some parts of Bangladesh, India, Sri Lanka, the Maldives and as far away as Somalia, Tanzania, and eastern Africa (Lucich, Dal Bon, and Houston, 2007). This disaster prompted worldwide assistance to the countries affected with billions of dollars contributed to the country for aid relief. Australia was one of the first to offer its assistance, including the US, the UK, and Japan. The Australia-Indonesia Partnership for Reconstruction and Development (AIRPD) was also established on January 2005 in order to secure immediate assistance to Indonesia (Lucich, Dal Bon, and Houston, 2007). This tsunami caused major changes and upheaval for Indonesia, and major changes which came in the face of Suharto’s fall regime, the country’s transition to democracy, and the Asian financial crisis. Aside from human casualties, various houses, hotels, infrastructures, and livelihoods were wiped-out by the tsunami. Human deaths and injuries, as well as psychological trauma were caused by the tsunami. Initial costs in estimated damages in the billions were recorded, with billions more allocated for rebuilding (Bandara and Naranpanawa, 2005). ...