Regional Office for Asia and the Pacific

Hiroyuki Konuma

FAO Regional Representative for Asia-Pacific

He Changchui
Assistant Director-General and
Regional Representative for Asia and the Pacific
at the

FAO-APRACA Workshop on
Designing Effective Disaster-Related Rural Finance Strategies

Grand China Princess Hotel, Bangkok
15 March 2005

Distinguished CEOs of APRACA Member Institutions
Distinguished delegates from tsunami-affected countries
Delegates from NGOs and partner institutions
FAO colleagues
Ladies and gentlemen,

It is my pleasure to welcome all participants to this regional workshop on Designing Disaster-Related Rural Finance Strategies.

The massive and debilitating 26 December 2004 earthquake and the consequent coastal floods have severely affected several Asian countries around the Indian Ocean, in terms of death and injury, livelihood disruption, unemployment, asset loss and out-migration. The world is still trying to grasp the immensity and long-lasting negative impact of this natural disaster on local populations and the affected countries’ economy.

FAO expresses its deepest condolences to those affected. FAO has embarked rapidly on a programme of assisting the countries involved in rebuilding and rehabilitation. Within 24 hours after the disaster, FAO had mobilized teams of national and international experts already present in the area to assess the damage to the agriculture and fisheries sectors and identify the assistance needed. The evaluations confirm that the fisheries sector was hit worst by the tsunami, but crop and livestock as well as coastal eco-systems, including mangroves, also suffered serious damages.

Ladies and gentlemen,

Local communities hit by the tsunami waves face severe short and long-term food security problems because many parents and relatives have been killed, livelihoods have been destroyed and their previous sources of income no longer exist. It will require huge investments for a long time to restore destroyed or damaged boats, equipment, storage and processing facilities, irrigation, roads and marketing infrastructure.

In terms of economic loss, FAO latest estimates from India, Indonesia, Maldives, Myanmar, Somalia, Sri Lanka and Thailand combined put the cost in the fisheries sector alone at $520 million. This relates to 111 073 fishing vessels destroyed or damaged; 36 235 engines lost or damaged beyond repair; 1.7 million units of fishing gear destroyed; and $200 million of damage to Infrastructure (such as aquaculture operations, fishing infrastructure, and harbours).

FAO is a partner in the national and regional coordination efforts, and participates in the global United Nations Tsunami Flash Appeal launched on 6 January. The Organization has appealed for US$26.5 million to provide emergency aid to the farming and fishery communities hit by the tsunami and has provided $1.5 million from its own resources for emergency operations. The emergency relief operation has been continued to provide direct assistance to the affected communities and local peoples with large number of FAO experts working in the fields.

While such short-term assistance is indispensable, FAO also intends to implement medium- and long-term rehabilitation programmes to restore livelihoods and the ecosystems in the affected areas. This requires that due emphasis be given to enhancing rural development and food security, as well as to ensuring that capacities are rebuilt in accordance with the requirements of sustainable resource use and improved environmental protection. Other areas of concern include linkages to the early warning systems for natural disasters and response, rehabilitation of salt-affected soils, repair of large-scale irrigation infrastructure and restoration of biodiversity.

I should like to emphasize that technical assistance provided by FAO to the tsunami-affected countries focuses on the empowerment of people to have more diverse livelihoods, with greater productivity, more income and less stress to the environment. New strategies should help to avoid the reconstruction of poverty and create more stable and sustainable livelihoods. This central theme was amply stressed in the outcomes and recommendations of two related regional meetings held recently at the FAO Regional Office for Asia and the Pacific dealing with the rehabilitation and reconstruction of the fisheries and the forestry sectors. Allow me to give you some examples of direct relevance to your immediate concerns related to financing reconstruction.

Excessive capacity was and is a serious problem in some of the region's coastal fisheries prior to the disaster – a problem that reconstruction should avoid reproducing. FAO is stressing the need to avoid overcapacity in fishing boats and vessels, promote the use of responsible and selective fishing gear, and the rehabilitation of cage aquaculture for improving efficiency and profitability, and simultaneously reducing risk of disease and improving environmental performance and product quality.

Much of the infrastructure destroyed by the tsunami was made of wood, including piers, bridges, boats, houses and other buildings. The massive demand for wood for rebuilding runs the risk of putting undue pressure on forests. The FAO regional workshop on the rehabilitation of forest ecosystems following the tsunami, held from 7 to 8 March, highlighted the need to take urgent measures to avoid over-harvesting and the illegal felling of trees. If not managed appropriately, the demand for wood could adversely affect the remaining forests irrevocably.

I take this opportunity to also call your attention to the role of women farmers, fisher folks , ranging from immediate practical aspects to long-term sustainable aspects. In the aftermath of the tsunami disaster, intensive work is going on to restructure, resettle, and reassure women with their reproductive and maternal health care, physical safety, dignity, and psycho-social needs. Nonetheless, long-term work needs to be done on their livelihood opportunities with income generating programmes. A prompt and fair distribution and mobilization of resources is essential to rescuing women in this region from a fresh poverty trap.

Ladies and gentlemen,

The above examples illustrate the need to get the balance right. This is one positive aspect of the work we are doing towards rehabilitation. We have to exploit this opportunity to make sure that people come out of this better off.

Providing direct financial support is an integral part of rehabilitation and rebuilding the livelihoods of the affected people. FAO has deemed it appropriate to cooperate with the Asia Pacific Rural and Agricultural Credit Association or APRACA, to explore the various finance-related coping mechanisms and rural finance strategies employed by financial institutions to soften the impact of a disaster on their financial operations as well as on their rural clients and to provide the financial support to re-build the clients’ livelihood.

As we move into the long-term rehabilitation and reconstruction process, FAO and APRACA stress the need for a shared vision of a sustainable approach to reconstruction, and the need to agree on a “blueprint” for what we are attempting to build and how we are going to realize this vision.

This vision must be based on restoring the livelihoods of those affected and include sustainable management of the natural resource base, such as coral reefs and mangrove forests and associated fisheries on which a sustainable recovery will depend.

The primary output of the workshop will be a compendium of re-designed and more appropriate rural finance strategies that would ensure sustainable financial operations of financial institutions as well as quick rehabilitation and rebuilding of livelihoods of small fishing communities.

This output will be helpful in forging regional financial strategy and programme framework for long-term financial rehabilitation and sustainable development of the populations living in the affected coastal zones in all tsunami-hit countries.

The task ahead of us is complex and challenging, and no single organization can deal with it effectively alone. We are ready and willing to work with partners to undertake assessment of longer term impacts and introduce a stepwise rehabilitation approach to ensure sustainable development in the region.

I am confident that the collective wisdom and expertise of this workshop shall provide a firm impetus to the building of this strategy and framework for rehabilitation.

I wish you well in your endeavors and look forward to a very successful workshop. Thank you and good morning.