Asia Floods Take Heavy Toll on Local Economies
Floodwaters in central Thailand have inundated industrial parks and manufacturing centers, adding to the mounting economic costs of the disaster. Cambodia, Vietnam and Laos are also continuing to tally the cost of heavy flooding that has claimed hundreds of lives.
Economists fear Thailand's most severe floods in decades may cost the country $5 billion and reduce its gross domestic product by about one percent.
The economic toll is already being felt in the country's industrial heartland, where floods breached the walls of major industrial estates. The damage has shut Honda and Toyota automobile assembly plants that account for about seven percent of their combined global production.
More water is expected in the country's manufacturing center as well as the capital, Bangkok. Together the industrial areas produce nearly one-half of Thailand's national output.
Bhichit Rattakul is executive director of the Asian Disaster Preparedness Center. Bhichit says floods may take up to two months to disperse, with the main body of water still to reach outer Bangkok.
"It's not easily over," said Bhichit. "[It could last] at least another 50 days because the volume of the water is still up in the north; it's not even at Ayutthaya or Bangkok yet. I mean at Ayutthaya we don't see any piece of land at all now; all we see is the water. It's all submerged. The main part of the water is still in Nakhon Sawan area. So you need some time to drain it out."
Officials from the Thai Industry Ministry say up to eight industrial estates and parks that employ over 200,000 highly skilled workers are under threat from floods.
Economists warn Thailand's growth rate will be hit, especially in the fourth quarter of 2011. Thanomsri Fongarunrung, a senior economist with Phatra Securities, says the impact on industrial production is a key concern for the economic outlook.
"Our concern is that the major area in the central area that is mainly the manufacturing of automobile, electronics, right now that is under flood and the major threat is that is comes through to Bangkok," said Fongarunrung.
While authorities warn Bangkok is at risk for flooding in the coming days, much of the damage so far has been in rural and agricultural areas in Southeast Asia.
The United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA) said the flooding across countries bound by the Mekong River system - Thailand, Cambodia, Vietnam and Laos - had led to the loss of over 550 lives. In Cambodia, efforts to assist communities had been hampered by high waters and dangerous road conditions.
Peter Brimble, a senior economist for the Asian Development Bank in Phnom Penh, said the damage has been devastating for poorer communities that have been building local infrastructure using government assistance.
"They've been using these small amounts of money - maybe $10,000 or $20,000 a year - to gradually build up some of the small roads and things around the village and their commune - and now they're all washed away," said Brimble.
In Vietnam, flooding hit the Mekong Delta region claiming over a dozen lives including children while storms also hit the north central coastal region leaving 60,000 homes submerged and damaged. In Laos, where floods have affected almost half a million people, the waters have damaged more than 60,000 hectares of farmland damaged as well as local infrastructure. |