Doc. 10446

26 January 2005

Europe and the Tsunami Disaster

Opinion1

Committee on Economic Affairs and Development

Rapporteur: Mr Klaus Werner Jonas, Germany, Socialist Group

I.        Introduction and background

The present memorandum, emanating from the Committee on Economic Affairs and Development, is meant to contribute to the urgent debate foreseen to be held by the Parliamentary Assembly of the Council of Europe at its January 2005 part-session on the Tsunami catastrophe that struck the Indian Ocean region on 26 December 2004 and Europe’s role in assisting the area. It is drawn up in consideration of the Economic Committee’s role as the Assembly’s primary body responsible for development co-operation.

The author was asked to assume this task on a provisional basis by the Committee’s Chairman, during the visit they carried out together in early January 2005 to the International Monetary Fund and the World Bank in Washington, for the purpose of preparing a report on these institutions’ assistance to developing countries. The author acceded to the Chairman’s plea in view of the fact that the Economic Committee had not been in a position to convene a meeting in the intervening period.

The aim of the memorandum - to be presented alongside contributions by several other Assembly committees relating to their particular areas of competence with the Social, Health and Family Affairs Committee being in overall charge - is to describe, however briefly, the immediate, medium-term and long-term needs of the stricken region and the international resources so far mobilized to meet them, as well as to make a number of recommendations.

II.        Impressive pledges …

The Tsunami caused at least 160,000 deaths and with the final toll, it is to be feared, possibly reaching around 200,000; 500,000 injured and at least 2 million people in need of assistance, including several hundred thousand lacking shelter. Tens of thousands more are in danger of losing their lives if epidemics break out, even though that risk now seems to have somewhat subsided.

At the United Nations Conference on the Coordination of Needed Assistance to the Tsunami Victims in the Indian Ocean, held in Geneva on 11 January 2005, pledges of altogether $3 billion were made by over 60 countries around the world. Additional private and other pledges or actual funds so far amount to another $ 2 billion, making the total assistance either pledged or realized reach over $ 5 billion. To this should be added the debt forgiveness (often in the form of moratoria on debt repayment) awarded to the worst affected countries by the international community, especially the G-8 group of leading industrialized nations acting via the Paris club of auditors. The European Union has, for its part, pledged € 450 million in total aid – € 100 million in immediate assistance and € 350 million for longer term reconstruction, while the EU’s European Investment Bank (EIB) has announced its willingness to provide favourable loans of up to € I billion. The Council of Europe area as a whole has so far pledged approximately € 2 billion. (the World Bank has pledged $ 250 million, and the IMF an estimated $ 1 billion, in particular via its Emergency Natural Disaster Assistance facility.)

The assistance is planned to come in three stages. The first is in the form of immediate humanitarian assistance, which UN Secretary General Kofi Annan at a Coordinating Conference held in Jakarta, Indonesia, on 6 January 2005, said would have to amount to $ 977 million. Of this, over $ 700 million, or around three-quarters, were committed at the above-mentioned Geneva Conference. There is every hope that the remaining quarter will soon be forthcoming. The funds are foreseen for the Tsunami victims in Indonesia, the Maldives, the Seychelles, Somalia and Sri Lanka – with India having so far turned down foreign offers of assistance (and no specific figure for Thailand indicated). These funds are foreseen to be spent by mid-2005.

The United Nations, which in both Jakarta and Geneva was recognised as the natural co-ordinator of the total assistance effort due to its unique mandate and legitimacy, foresees, as a second stage, a two-year programme meant to permit a normalization of the living conditions for the affected countries and populations. In a third stage, lasting some subsequent five years, final reconstruction is meant to be completed.

The above assistance, whether in pledges or in actually paid out assistance, are truly impressive and bear witness to the world’s, and Europe’s, solidarity with all those affected by the disaster.

III.        …. but seeing is believingIt

It is, however, important to remember that pledges are not the same as actual assistance. In some instances it may of course turn out that actual needs do not correspond to those believed needed immediately after a given catastrophe. However, if the past is to serve as any guidance for the future, then we, as European politicians, must make sure that pledges actually come true.

We all remember the earthquake that destroyed the Iranian city of Bam to the day one year before the Indian Ocean tsunami. Here, pledges amounting to over $ 1 billion were made by the international community in the immediate aftermath to the catastrophe. However, to date only around 2% of those pledges have actually been honoured. For the whole of the 2004, the UN launched various assistance appeals totaling $ 3.4 billion, of which only two-thirds were met by pledges and far less actually disbursed. Similarly, in November 2004 a UN appeal was made for $ 1.7 billion to assist over 20 million people around the world, and above all in Africa, but only 30% of this sum has been committed. It is not surprising, therefore, that the UN’s Coordinator for Emergency Assistance, Mr Jan Egeland, has called for a control mechanism to supervise the process from pledges made to payments made.

IV.        The crucial task of timing and coordinating assistance

The amount of assistance pledged and above all disbursed is important. As important is the coordination of assistance, to make sure that each stricken region – and ideally each affected village and individual – receives sufficient assistance to resume normal life. Much will depend on the ability of donors to streamline their assistance and avoid overlapping.

The absorption capacity of the recipient countries will also come under severe strain. It is a matter of rebuilding villages, roads and railroads. It is about financing fishing vessels, equipment etc. needed by the millions of fishing communities that lost everything in the disaster. Professional training in various crafts will be badly needed to permit survivors to take over from those who perished. Tourist facilities, of crucial importance to many of the regions affected, will have to be restored.

To reduce the loss of life in any future tsunami in the region, an early warning system such at that already installed in the Pacific must be built. It is heartening that Japan, an observer to the Council of Europe and a regular guest in the Parliamentary Assembly, has offered not only the necessary money to acquire and install the most modern apparatus available, but also to offer its considerable expertise gained in its own past with tsunamis.

V.        Concluding remarks

The tsunami that hit the Indian Ocean in December 2004 was a catastrophe of a rarely seen order, costing the lives of thousands from the region and from all over the world. The world community in its reaction showed that it is increasingly precisely this - one world and one mankind coming together to share its grief for the dead and manifest its solidarity with those surviving.

We must now, together, make sure that these emotions translate into lasting generosity and commitment to rebuilding lives and regions. The Economic Committee will closely follow this effort and do its utmost to ensure that pledges are lived up to and assistance well thought out. Already in the author’s forthcoming report on the Bretton Woods institutions, mentioned at the outset of this memorandum, an interim report will be made, in view of the important role incumbent on the International Monetary Fund and the World Bank in this endeavour.

Furthermore, the Economic Committee’s Sub-Committee on Tourism Development can be expected to examine ways of restoring tourism facilities in and tourist flows to the region. Suffice it here to say that the World Trade Organization, in a report of 7 January 2005, points to the traditionally strong capacity of the Asian region to rebound after crises in the past, such as the financial crisis of the late 1990s and, more recently, several Sars epidemic alarms. Eighty per cent of the tourism in Asia is in fact intra-regional or domestic and has likewise shown itself to be highly resilient. Many tourists may well return to the region out of solidarity, in the conviction that locals now need more support than ever. These and other related issues will no doubt be taken up further by the Sub-Committee on Tourism Development.

In conclusion, the author suggests for the Economic Committee’s consideration that the following paragraphs be contributed to the overall Assembly text to be prepared by the Assembly’s Social, Health and Family Affairs Committee. As mentioned at the outset, that Committee was designated by the Bureau of the Assembly to have primary responsibility for preparing an Assembly text, with other Committees such as our own adding paragraphs on more specific aspects within their competence.

The following paragraphs are suggested for insertion at the appropriate place in the Social, Health and Family Affairs Committee’s draft text:

-       The Assembly welcomes the generous general response given by the international community. States and international institutions had made substantive funding pledges and granted debt forgiveness or moratoria. Thousands of companies and millions of people around the world have made donations. In this context, the Assembly stresses the necessity to ensure maximum transparency with regard to the transfer of these funds.

-       In view of the importance that pledges be fully met through actual disbursement – and in the awareness that such has not always been the case after similar disasters in the past – the Assembly resolves closely to monitor that it is done.

-       The same holds for the timing and coordination of the assistance – from immediate relief to medium and long-term support – to the stricken regions. The Assembly in this context welcomes the offers of the European Union, the United States and Japan to assist the region in installing a state-of-the-art tsunami early warning system and to share their considerable expertise in this field.

Reporting committee: Social, Health and Family Affairs Committee

Committee seized for opinion: Committee on Economic Affairs and Development

Reference to committee: Reference No 3050 of 24 January 2005

Opinion approved by the Committee on Economic Affairs and Development on 21 January 2005


1        See Doc. 10428 tabled by the Social, Health and Family Affairs Committee.