Typhoon disaster in Taiwan:
Agriculture, tourism hit hard
Typhoon Morakot has hit Taiwan's agriculture and tourism sectors
hard, but the overall impact on the economy already reeling from the
financial crisis may be limited, experts said.
The island was struggling with possibly its longest recession yet
when the typhoon struck on August 8, unleashing floods and mudslides
that President Ma Ying-jeou has warned may have left up to 500 dead.
The estimated economic impact rose to 110 billion Taiwan dollars (3.4
billion US dollars) at the end of last week, including destroyed homes,
crops and infrastructure, Premier Liu Chao-shiuan told reporters.
A farm severely damaged by a massive amount of landslides on a
mountain of Alishan, a scenic township in the southern Chiayi
county, Taiwan. AFP |
The Cabinet is expected to submit a special budget to parliament this
week to cover disaster relief and reconstruction, he said.
Agriculture and tourism sectors bore the brunt of the typhoon damage,
Mars Hsu, an analyst with Grand Cathay Securities said.
"However, because those two sectors do not make up a big share of
Taiwan's gross domestic product, the negative impact on Taiwan's
economic activity is not expected to be as severe as some may fear," he
said. The damage from the past nine days may lead to Taiwan's GDP
contracting an additional 0.53 percentage points in the third quarter,
according to a forecast by SinoPac Holdings.
For the whole year, the typhoon could lead to an extra 0.13
percentage point fall from the original forecast of 2.5 percent annual
fall, the finance firm said in a research note.
The forecast pales in comparison to the 10.24 percent contraction
Taiwan's economy suffered in the first quarter when the island's exports
plummeted.
Other recovering sectors should offset most of the typhoon's losses,
Alex Huang of Mega International Investment Services said.
"Every sign, including exports and trade surplus, indicates the
domestic economy has been turning for the better," he said.
Taiwan's economy had been expected to climb out of recession in the
fourth quarter as exports recover, the semi-official Chung-Hua
Institution for Economic Research think tank said in an earlier report.
Agricultural losses so far amount to at least 12.2 billion Taiwan
dollars (372 million US dollars), according to the Council of
Agriculture. But that figure was rising daily and is expected to
approach the 18.8 billion in losses caused by Typhoon Herb in 1996, the
worst agricultural disaster in Taiwan's history.
Tourism will suffer as Alishan, or Ali Mountain a popular destination
for Asian tourists and other famous nature reserves in the mountainous
southern regions were badly damaged by flooding and mudslides, Hsu said.
More than 100 million Taiwan dollars in hotel and restaurant
facilities were wiped out and it could take up to two years for key
infrastructure to be restored, the China Post reported Monday.
The area's railway could take up to a year to repair at a cost of 800
million Taiwan dollars, the Liberty Times reported.
However, the fact that the typhoon hit remote mountain regions and
not Taiwan's industrial heartland helped insulate the export-oriented
economy, Hsu said.
"Unlike the earthquake in 1999, as Taiwan's major industrial parks
remain intact during the typhoon, the export sector should go
unaffected," he said.
The 7.6-magnitude quake, the deadliest natural disaster in the
island's history, claimed around 2,400 lives and seriously damaged
several industrial parks, including the Hsinchu Science-based Industrial
Park in the north.
In the meantime, some industries like steel, cement and construction
may benefit from the natural disaster as the president has vowed to
return people's lives back to normal as soon as possible, Hsu said.
AFP |