El Niño and South-East Asia's Economic Woes

In the November 20th Eco-Compass feature on the Economic Impacts of El Niño, Eco-Compass reported the economic effects of climatic changes brought about by El Niño on various countries including Indonesia and Papua New Guinea. Since then these South-East Asian countries have plunged into a financial and humanitarian crisis. Most commentators have concentrated on the role that international lending policies, institutional corruption, and currency fluctuations have played in the current crisis in Asia. This Eco-Compass feature focuses on the environmental and humanitarian impacts of the Asian crisis on the people and resources of the region.

Indonesia

In November Eco-Compass reported that 1.7 million hectares of tropical forest had been lost to wildfires in the drought-stricken provinces of Sumatra, Kalimantan, Sulawesi, Java, and Irian Jaya. The economic impact of these fires had been estimated at 6.7 billion rupiah ($1.9 million) and the human losses were estimated at 58 dead or missing fighting fires, 416 dead of starvation, and an additional 90,000 in desperate need of food and water.
Since then the situation has become progressively worse. The failure of the annual rainy season, due to El Niño-related climatic anomolies, and the devaluation of the rupiah, have resulted in a shortage of food severely affecting nearly 300,000 people. Local harvests have been all but wiped out by the prolonged drought and imported foods have nearly doubled in price. Widespread looting has already occurred in the province of Java. At least 1 million people are expected to lose their jobs due to the devaluation and fresh forest fires are reported in Indonesia's Borneo. To date 300 people are reported dead or missing due to fire, and hundreds of thousands are reportedly on the brink of starvation.

Papua New Guinea

In September Eco-Compass reported that the worst drought in 50 years had left 150,000 people in serious need of food and water and that water levels had become so low that production of copper had ground to a halt. Since then the number of people who now find themselves with no food other than what they can collect from the bush around their villages has grown by a factor of 2.5 to around 260,000. The number of people who have only small and inadequate amounts of food still available from gardens, sago, coconuts, or fish has grown by more than 3 times to be an estimated 980,000. Thus around 1.2 million people or 40 percent of an estimated 3.15 million rural dwellers in PNG are suffering a severe, and to some, a life threatening, food shortage.
All provinces are affected to some degree. However, provinces with the largest numbers of people affected by a critical shortage of food are Western (27,160), Milne Bay (26,200), Southern Highlands (28,300), Chimbu (54,720), Western Highlands (28,390) Eastern Highlands (30,300), and Central (21,170). Even with reasonable amounts of rain from now onwards, the numbers of people without adequate food will continue to increase with the worst period yet to occur, around February and March 1998. From April 1998 conditions will improve reasonably quickly, so that by May 1998, probably only those people who live in the high-altitude areas will remain with no local means of support. Some of those people will be able to support themselves in the places to which they have migrated.

Many people in North America and Europe have been alerted to the problems of these nations purely because of the effects that their financial woes have had on world stock markets. The situations described above will soon affect our lives directly. World copper prices are already rising and economists predict that Asia's economic woes could lead to U.S. job losses.

The World Bank and IMF have stepped in with restructuring packages for the Indonesian economy and have provided Papua New Guinea with loans to mitigate the effects of the drought. Individual nations including Australia, New Zealand, and Canada are already providing relief aid to the region. (The U.S. and the European Union are expected to approve emergency aid packages shortly.)

Although El Niño cannot be identified as the single factor that pushed these fragile economies over the edge, there is no doubt that its continuing effects on the region will make the recovery process far more costly and time consuming.