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The Economic Effects of the Asian Tsunami on the ‘Tear Drop in the Indian Ocean’

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  • Jayatilleke S. Bandara
  • Athula Naranpanawa

    (Jayatilleke S. Bandara and Athula Naranpanawa are at the Griffith Business School, Griffith University, Nathan Campus, Nathan Australia, QLD 4111. Email: j.bandaralage@griffith.edu.au)

Abstract

Sri Lanka is the second worst affected country by the Indian Ocean tsunami (IOT) in absolute terms after Indonesia and the most affected country in relative terms of per capita deaths, missing and displaced people. In addition to the damages to public infrastructure and owner-occupied houses, some sectors of the economy such as fishing and tourism have been severely affected. This article demonstrates how a computable general equilibrium (CGE) model can provide some information on the effects of the IOT and on the likely effects of a reconstruction aid package on tsunami affected economies such as Sri Lanka, India and Indonesia. The article indicates that it is important to consider the combined effects of the IOT and the reconstruction package. While the IOT has produced negative economic effects on the economy, the reconstruction package would stimulate the economy.

Suggested Citation

  • Jayatilleke S. Bandara & Athula Naranpanawa, 2007. "The Economic Effects of the Asian Tsunami on the ‘Tear Drop in the Indian Ocean’," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 8(1), pages 65-85, January.
    • Handle: RePEc:sae:soueco:v:8:y:2007:i:1:p:65-85
    DOI: 10.1177/139156140600800104
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    References listed on IDEAS

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    1. Bandara, Jayatilleke S. & Coxhead, Ian, 1999. "Can Trade Liberalization Have Environmental Benefits in Developing Country Agriculture? A Sri Lankan Case Study," Journal of Policy Modeling, Elsevier, vol. 21(3), pages 349-374, May.
    2. Mark Horridge & John Madden & Glyn Wittwer, 2003. "Using a highly disaggregated multi-regional single-country model to analyse the impacts of the 2002-03 drought on Australia," Centre of Policy Studies/IMPACT Centre Working Papers g-141, Victoria University, Centre of Policy Studies/IMPACT Centre.
    3. Glyn Wittwer & Simon McKirdy & Ryan Wilson, 2003. "Analysing the Economic Impacts of a Plant Disease Incursion Using a General Equilibrium Approach," Centre of Policy Studies/IMPACT Centre Working Papers op-97, Victoria University, Centre of Policy Studies/IMPACT Centre.
    4. Blitzer, Charles R. & Eckaus, Richard S., 1986. "Modeling energy-economy interactions in small developing countries: A case study of Sri Lanka," Journal of Policy Modeling, Elsevier, vol. 8(4), pages 471-501.
    5. Charles R. Blitzer, 1986. "Energy-Economy Interactions in Developing Countries," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 35-50.
    6. Adams, P.D & Horridge, M & Madden, J.R & Wittwer, G, 2002. "Drought, regions and the Australian economy between 2001-02 and 2004-05," Australian Bulletin of Labour, National Institute of Labour Studies, vol. 28(4), pages 231-246.
    7. J. Mark Horridge & Brian R. Parmenter & Martin Cameron & Riaan Joubert & Areef Suleman & Dawie de Jongh, 1995. "The Macroeconomic, Industrial, Distributional and Regional Effects of Government Spending Programs in South Africa," Centre of Policy Studies/IMPACT Centre Working Papers g-109, Victoria University, Centre of Policy Studies/IMPACT Centre.
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    Cited by:

    1. Vikash Ramiah, 2013. "Effects of the Boxing Day tsunami on the world capital markets," Review of Quantitative Finance and Accounting, Springer, vol. 40(2), pages 383-401, February.

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    More about this item

    Keywords

    JEL: I31; JEL: I32; JEL: I38; Indian Ocean Tsunami; Reconstruction Package; Computable General Equilibrium (CGE); Model; Policy Simulations; Foreign Aid;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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