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Up to 300,000 join ranks of poor after quake

Source
Agence France Presse - June 16, 2006

Manila – About 300,000 Indonesian survivors were impoverished after a deadly earthquake struck the center of densely populated Java island last month, an Asian Development Bank (ADB) study says.

"The earthquake is estimated to have impoverished an additional 67,000 households and increased the poverty head count ratio by 1.6 percent in the affected areas," the report said.

Aid agencies taking part in the relief effort in Central Java and Yogyakarta provinces have estimated the average household in the area at five persons.

The ADB report said preliminary estimates suggested the reduced economic activity would lead to 130,000 lost jobs, or about four percent of total employment in the affected areas. "Close to 70,000 people may have lost their primary source of income" as a direct result of the quake, it said.

It added that the pace of jobs recovery "will depend on the evolution of the reconstruction effort," noting that the hard-hit areas were "fiscally poor and depend heavily on the central government's general allocation transfer".

The quake is expected to have a "minor effect" on the national economy with a 0.1 percent drop in gross domestic product ( GDP), it said, noting that the 11 affected districts combined accounted for just 2.2 percent of Indonesia's GDP.

"The main impact on the national economy is likely to come from the cost of the reconstruction effort and its implications on national government finances," it said. The report said the affected region's economic growth was expected to drop to 1.3 percent this year and 4.2 percent in 2007.

It said the pre-quake gross regional domestic product growth for the affected districts as a whole had been put at 5.5 percent for both 2006 and 2007.

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