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MALE, MALDIVES (26 January 2005) - ADB is offering initial new assistance of $20 million in grants to help the Maldives' post-tsunami reconstruction and rehabilitation effort, ADB Vice-President Liqun Jin said at meetings with Maldives President Maumoon Abdul Gayoom and Finance and Treasury Minister Mohamed Jaleel yesterday.

The grants, subject to approval by ADB's Board of Directors, would be in addition to ADB's regular assistance operations.

Mr. Jin, who also visited the island of Kaafu Guraidhoo to see homes and livelihoods that were broken by the tsunami and spoke to survivors in a tented camp for internally displaced persons, said the Maldives is among the most severely impacted of the tsunami-hit countries.

Although coral reefs helped reduce the impact of the tsunami and kept the official tally of fatalities below 100, a third of the 290,000 population has been affected, directly or indirectly. Waves ranging from one to five meters high flooded the country where the average elevation is only 1.5 meters above sea level. Some 5% have had their homes completely or partially damaged. The supply of drinking water has been severely disrupted. Furthermore, floodwaters have infiltrated the islands' shallow freshwater aquifers.

The tsunami has severely affected people's incomes by hitting hard the key revenue-earning sectors, tourism and fisheries. At Kaafu Guraidhoo, Vice-President Jin saw some of the worst effects of the tsunami, which damaged the fishermen's boats and closed nearby tourist resorts, thus stripping islanders of their capital, livelihood and nearby market.

Tourism contributes a massive 60% to 70% of Maldives' gross domestic product (GDP) but the tsunami damaged about 20% of its 87 resorts and occupancy rates at the remaining resorts has plunged from 100% to 40%.

Fisheries accounts for half of exports, but the tsunami washed away the fishing fleets on over 50 of the Maldives' 199 inhabited islands.

Agriculture, too, has been hard hit with over 100 agricultural islands affected when the tsunami washed away the top soil and contaminated the soil with saltwater. Many of the affected agricultural plots are home gardens.

"We are very concerned about the need for quick assistance as the government is spending money on the relief effort while revenues are falling sharply," said Mr. Jin.

"We plan to provide grants because it is important not to add to the government's debt burden at this time of great need."

ADB expects to be involved in the water supply and sanitation, housing, transport and communication, and power sectors.

In addition to the emergency grants, ADB is considering adjusting and expanding the scope of projects currently in the pipeline in order to address tsunami needs. One example, says Richard Vokes, a Director of ADB's South Asia Department, is a maritime transport project.

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