Death and Displacement

Last year's December 26 tsunami was the deadliest tsunami in recorded history and one of the worst natural disasters in modern times. As of late November, 225,934 people were either dead or missing. A dozen Indian Ocean countries suffered death and destruction, and citizens of several dozen other countries were killed as well. The disaster hit the poor particularly hard, and many more women were killed than men. Of the 1.7 million displaced, hundreds of thousands continue to live with family or friends while tens of thousands remain in tent camps and temporary shelters.

The Most Generous Disaster Response Ever

The global response to the tsunami was immediate and extensive, as governments, businesses, and individuals opened their wallets and contributed an estimated $13.4 billion. Often, private contributions exceeded the government assistance packages, as in the United States, where businesses and individuals gave almost twice the amount of Washington's official aid package (which was itself the largest government donation). Governments are mostly keeping their word and have allocated large shares of their pledges to either governments of affected countries or specific projects.

Humanitarian Response Outpaces Giving for Other Disasters

Since 1992, the U.N. consolidated appeals—which gauge the post-disaster needs of U.N. agencies and many NGOs for humanitarian operations—have only received enough funds for two thirds of the stated needs of an average operation. By contrast, the tsunami was "the most generous and immediately funded relief effort ever," according to Jan Egeland, the U.N. under secretary-general for humanitarian affairs and emergency relief coordinator. As of Nov. 30, 2005, 84 percent of the financial needs for the U.N. tsunami appeal had been met, whereas the 25 other U.N. consolidated appeals for 2005 were funded at an average of only 50 percent. Despite pledging billions in loans and long-term reconstruction aid for Pakistan following a devastating October 8 earthquake, humanitarian relief operations are still underfunded. The earthquake killed some 73,000 Pakistanis and 1,300 Indians, and without increased relief efforts as winter sets in, many thousands more could die from disease, hunger, and exposure.

Economies Bounce Back, Coastal Areas Still Hurting

The tsunami devastated local economies. For example, damage and losses in the Indonesian province of Aceh were equivalent to 97 percent of the province's gross domestic product (GDP). The traditional economic sectors of coastal communities—fishing, small-scale agriculture, and trade—remain depressed. Most national economies, however, will continue to maintain solid growth rates for 2005. The one exception is the Maldives, where the economy will likely contract this year, largely due to the drop in tourism. The disaster was a particularly hard psychological blow there, as the Maldives had graduated from the U.N. category of "Least Developed Country" six days before the tsunami. As the country's president said, "Two decades of development were washed away."

NGOs Step Up

NGOs have played an increasing role in disaster response and recovery in recent years, but the tsunami response broke new ground. There are some 124 international NGOs and 430 local or national NGOs working in Indonesia alone. NGOs are often able to move money and implement programs quicker than governments or multilateral agencies. They have, for example, financed 38 percent of current reconstruction projects in Indonesia. At the same time, NGO-financed activities are often harder to coordinate and standardize, and the more ad hoc nature of projects can complicate plans for an integrated recovery.

Spending Wisely

Recovery from the tsunami's extensive damage will require careful planning and coordination as entire communities are rebuilt. Enough resources have been mobilized to meet most short-term humanitarian needs and to cover medium-term reconstruction costs. The challenge now is not raising more money but ensuring that reserves are spent efficiently. In Indonesia, the government, donors, and NGOs each have more than $2 billion to spend until 2009, according to the World Bank. Although $2.9 billion is programmed for reconstruction projects, and another $770 million for broader development programs, less than $500 million has been disbursed.

The sectors where immediate relief was most important, such as food and health, were well covered. Other sectors that will be important to the region's long-term recovery, such as agriculture and broad economic assistance, are not as well funded and fewer projects have been implemented. The U.N. Flash Appeal figures exclude the billions more raised for reconstruction, but they provide a useful snapshot of the funding and expenditure levels of humanitarian projects by country in the year since the tsunami.

The Housing Challenge

Providing adequate shelter for the displaced remains one of the most difficult short-term challenges in the recovery effort, particularly in Indonesia and Sri Lanka. Tens of thousands have found temporary accommodation with friends or relatives, but many thousands of people remain in tent camps and shelters. Living conditions in those centers deteriorated during the year, and tens of thousands of more durable temporary housing units will be needed until permanent housing is built. The pace of permanent housing reconstruction has been slow, due to the complexities involved in reconstructing entire areas, coupled with coordination problems and material shortages. There are signs of recent progress, however. Although the overall number of houses for the displaced remains low in Indonesia, housing starts increased from 1,000 in June to 5,000 in October.