The Economic Impact of the 26 December 2004 Earthquake and Indian Ocean Tsunami in Thailand


I. Introduction

a) Background

A powerful earthquake of magnitude 9.5 in the Richter scale, with epicenter located just off the Northern part of the island of Sumatra, occurred in the early hours of 26 December 2004. It created a tsunami that expanded over the Indian Ocean and affected the coastal areas of many countries in Asia and Africa.

Estimates of the economic and social impact of the disaster were undertaken under the leadership of the World Bank in Indonesia(1), Sri Lanka(2), Maldive Islands(3), and India(4). In Thailand, however, only individual sector assessments as well as preliminary global assessments of the macroeconomic impact were carried out by different government institutions, in some cases with assistance from international organizations(5). Thus, no comprehensive assessment is available for the entire Thailand nation.

The Asian Disaster Preparedness Center (ADPC) undertook a comparative study of the economic impact of the tsunami in the entire region, with a view to identifying common vulnerabilities and risks whose solution may be best approached in a cooperative fashion and thus generating significant economies of scale for the countries.

As part of the regional study, ADPC first undertook the estimation of the total amount of damage and losses sustained by Thailand. This report describes the methodology, assumptions and results of such estimation.

b) Methodology and Authorship

In order to make ensure the validity and accuracy of results in the comprehensive estimation for Thailand, and their compatibility with the available assessment of the other countries, ADPC resorted to the use of a damage and loss assessment methodology developed originally by the United Nations´ Economic Commission for Latin America and the Caribbean (ECLAC)(6), which was also used - to a varying extent - in the national assessments undertaken under the leadership of the World Bank.

The ECLAC methodology enables the estimation of the replacement value of destroyed physical assets as well as the estimation of economic losses arising from the temporary absence of the assets. The resulting figures are subsequently used to estimate the impact of the disaster on the macro-economic performance of the country.

Original information used in the sectoral assessments undertaken by the Government of Thailand as well as by international organizations was collected. In addition, statistical data in regard to sectoral and global development was obtained. These data were processed using the aforementioned ECLAC methodology.

Reports were collected from, and/or interviews were held with, inter alia, the following official organizations:

  • Bank of Thailand
  • Ministry of Finance
  • National Economic and Social Development Board (NESD)
  • Department of Disaster Prevention and Mitigation (DDPM)
  • Tourism Authority of Thailand (TAT)
  • Ministry of Agriculture and Cooperatives (MOAC)
  • Ministry of Education
  • Airports of Thailand (AOT)
  • Department of Highways
  • Provincial Electricity Authority (PEA)
  • Provincial Water Works Authority (PWA)
  • World Bank
  • Food and Agriculture Organization (FAO)
  • World Health Organization (WHO)

For this analysis, as well as for the comparative regional study, ADPC engaged the services of international consultant Roberto Jovel, who led the development and recent updating of the ECLAC methodology. Mr. Jovel has been leading the simplification and adaptation of the methodology to the local conditions of the State of Gujarat, India, under a project financed by the World Bank and executed by ADPC. Mr. Jovel has also prepared this report. ADPC personnel assisted him in the collection and processing of information from primary and secondary sources.


(1) See World Bank and BAPPENAS, Indonesia: Preliminary Damage and Loss Assessment; The December 26, 2004 Natural Disaster, Bangkok, January 2005.

(2) See World Bank and Others, Sri Lanka: 2005 Post-Tsunami Recovery Program, Preliminary Damage and Needs Assessment, Colombo, January 2005.

(3) See World Bank and Others, Republic of the Maldives; Tsunami, Impact and Recovery, February 2005.

(4) See World Bank and Others, India, Post-Tsunami Recovery Program; Preliminary Damage and Needs Assessment, New Delhi, March 2005.

(5) These references will be quoted separately in the appropriate chapters of this report.

(6) See ECLAC, Handbook for Estimating the Socio-Economic and Environmental Effects of Disasters, Four Volumes, 2003.

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