As part of the reconstruction process, the World Bank has been giving cash grants to people in tsunami affected areas. The grants have been used for cleaning up debris, repairing damaged homes and buildings and helping people resume their livelihoods.
The World Bank's efforts to ensure proper consultation with communities devastated by last December's tsunami is playing a vital role in helping people psychologically recover from the effects of the world's worst natural disaster in living memory.
That's the view of Margaret Arnold, the head of the World Bank's Hazard Management Unit - a unit which has played a key role in sharing the lessons learnt from previous disasters around the world.
Arnold says the Bank's response to the tsunami involves an increased emphasis on the need to restore people's livelihoods in areas affected by the tsunami.
This is, in part, shown through the giving of direct cash grants, housing grants to kick start the re-building process as well as through grants at the local community level - to remove rubble and debris or undertake repairs to damaged buildings or services.
"Those programs also help address the psychological trauma because people take an active part in the recovery and rebuilding of their communities," Arnold says.
The need to focus on restoring people's livelihoods was one of the key findings of case studies undertaken by the Hazard Management Unit and the ProVention Consortium. The ProVention Consortium is a global coalition of governments, international organizations, academic institutions, the private sector and civil society organizations aimed at reducing disaster impacts in developing countries.
Arnold says those lessons have helped drive the Unit's support for Bank teams working in tsunami affected countries.
"One of the main lessons that we found is that the recovery process is not very well understood, "Arnold says.
"A stronger focus on livelihoods wasn't integrated into past recovery programs. But we've learnt from that. The tsunami recovery programs are now having a much stronger focus on this in affected areas," she says.
The increased emphasis is shown in Sri Lanka - a country where already more than 11,500 households have received the first installment of a housing grant, worth Rs50,000(about US$500) to get the rebuilding going. Aside from the housing grants in Sri Lanka, about 140, 000 families now have money in their pockets because of what's called livelihood cash grants. This provide families with Rs5, 000 (about US$50) a month for four months.
Another example of grants leading to restoring people's livelihoods is in India.
World Bank financing has already helped fishermen in the state of Andhra Pradesh to resume their livelihoods and go back to the sea, by providing them with boats and fishing nets.
And in Indonesia, villages in Aceh have been able to obtain funds for small scale reconstruction projects at the community level - which has helped to restore water and sanitation as well as repair homes.
Arnold says the studies conducted by the Hazard Management Unit also revealed some other important lessons about disaster recovery. Another key lesson was the need to have strong and meaningful community participation.
"This ensures that affected communities are in the driver's seat of the design and implementation of the recovery and rebuilding of their communities, which has a number of benefits. It builds capacity at the local level, fosters improved governance, increases social capital, fosters the inclusion of traditionally marginalized groups, ensures ownership and sustainability, and aid effective project implementation. ."
A classic example of the community driven approach being put into action is in Indonesia -through the Bank supported Kecamatan Development Program. While this program existed before the tsunami devastated the region, it has been stepped up in order to allow local people a voice in the reconstruction process.
As part of that program, the Bank has about 6000 people covering some 2000 villages in Aceh - about half the number of villages in the region. They are the people who sit down with communities, helping them define and communicate their reconstruction needs. In response to a request from the Government of Indonesia, the Bank plans to expand the program to reach all villages in Aceh over the coming months.
Arnold says that another lesson learnt from past disasters is that while the rebuilding may take time, it's important to get it right.
At this stage, she says, the reconstruction process to date is progressing well in some areas.
"Some areas are moving along very well. In other areas, we're seeing the typical delays and frustrations that we see in many disaster recovery cases from around the world. And there are certainly some delays which are specific to each country. But then there are others which are quite typical in these cases. "
Arnold says it's usual - after a natural disaster - to expect it to take some time before seeing large scale reconstruction.
"This is the case, in particular, if there's going to be a genuine focus on building back in a better way so that communities are more resilient to disasters in the future.
"Disasters, particularly in developing countries, always affect the poor the hardest. Very well targeted and effective programs can be an extremely important for reducing poverty. So it's important to get the correct measures in place and that does affect the time-line for recovery processes and programs.
"All I can say from the past is that it is worth the time it takes to make sure the recovery process is done in the most effective and equitable way - so that communities are really built back in a better way and they're more resilient to future disasters."