Wed, Jan 19, 2005 - Page 9 News List

Aid organizations bump up prices in disaster zone


The outstretched hands of desperate refugees gathered outside the airport here just days after the earthquake and tsunami have at least partly been replaced by the hands of entrepreneurs trying to shuffle prospective customers into cars bound for houses-cum-hotels and offices in the city.

The majority of the people in this devastated town are still traumatized by what happened three weeks ago, and the goodwill of locals who want to help without price still dominates the landscape.

But there are more people who are starting to see what locals in Cambodia, East Timor, Afghanistan and other countries saw when large-scale relief missions arrived in those nations: big bucks.

"A driver for the UN told me, `This is the opportunity for us to collect as much as we can, so use your head. You must earn as much as you can,'" said Nouvand, a translator in Banda Aceh.

Increased demand and reduced supply have caused the prices of some daily foods to creep up in the wake of the

disaster, with small and large market vendors saying that some of the most popular items, like rice and sugar, have risen 10 to 20 percent.

Vendors say that other popular commodities, like peanuts and palm oil, which often have to be brought from Medan or other large centers of commerce not devastated by the tsunami, have increased by over 50 percent.

But by far the sharpest increase has been in services purchased by aid workers and organizations. Prices have already in many cases doubled, and in some cases even tripled, that before the tsunami.

Before, a car and driver that might have cost almost US$50 per day would now probably go for almost US$100 per day. Scalpers are buying large amounts of plane tickets and selling them for at least 30 percent above normal prices, and a four-bedroom house often rents for over US$100 per day.

"The price of these things varies so much right now," Nouvand said. "Someone charges one price and then talks to their neighbor and they say they charged something different. Then they change the price."

Most aid workers admit that the hundreds of millions of dollars in aid money and hundreds of foreign aid workers expected to pour into Aceh in the coming months could potentially have a huge impact on the local economy and even culture in the region, especially given the fact that this is a region in which the per capita income is about US$250 per year, according to 2002 UN statistics.

But aid workers also admit that given the magnitude of the disaster and the fact that relief is still in the emergency phase, few people have discussed how to mitigate this impact.

"Right now, no one is thinking about this kind of thing," said Pierre Legriene, food security advisor for Oxfam GB in Banda Aceh. "Now we are still in an unstable situation."

UN representatives say that, after fierce criticism of aid missions in other countries over the last 10 years, they and many other international organizations are aware of the potential problems, and have been taking steps to improve their operations.

The UN Development Program (UNDP) says all of its programs, for instance, are now cash-for-work programs designed to reduce the inflationary impact and provide jobs and other social benefits. Some of the planned UNDP projects include giving tsunami victims supplies and living expenses to rebuild their own homes, and money to help remove rubble and clean the city.

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