In tsunami-affected countries, governments and individuals stay focused on the future

An unprecedented $13.6 billion in aid has boosted rebuilding, but political and economic challenges remain three years later.

Three years ago, a towering wave swept aside the flimsy home of A. Muttama in Nagapattinam, India, and stole away her three children. Together with her husband, Selvaraj, a fisherman, she turned her back on the sea. After two years in shelter, they moved to Madras, where he found work as a rickshaw driver.

The memory of that day still brings tears to Ms. Muttama's eyes, but the horror of the past is yielding to thoughts of a better tomorrow. "The wounds were deep, but life doesn't stop for anyone," she says.

Across the Indian Ocean, where a Dec. 26, 2004, tsunami scoured coastal communities and displaced 2 million people in 12 countries, an unprecedented aid effort has repaired much of the physical damage. The world dug deep into its pockets and pledged $13.6 billion for the survivors of a disaster that claimed 230,000 lives. That money has fed, housed, and employed the afflicted, while governments and humanitarian agencies focused on rebuilding schools, houses, and hospitals and restoring shattered ports and waterlogged farms.

Some countries have moved forward: Resorts in Thailand are packed this season with foreign tourists seeking winter sunshine. Several low-key ceremonies to remember the dead will be held there today. In the southern Indian state of Tamil Nadu, where Muttama lives, more than 1,800 self-help groups have sprung up to grant small loans to survivors and give them better access to jobs, education, and healthcare, in some cases for the first time among underprivileged groups.

Other nations have grappled with tensions that predated the tsunami and became woven into the recovery effort. Insurgents in Aceh, the Indonesian province at the tip of Sumatra Island, signed a landmark peace deal and were elected to office. Sri Lanka saw its olive branch wither as fighting with ethnic-Tamil rebels escalated, hampering reconstruction projects.

For survivors, it's been a long road. But massive aid has mostly reached its target, defying skeptics who foresaw roadblocks to delivering services to marginalized communities in graft-ridden developing nations.

The next major challenge, say aid workers and government officials, is to avoid a hard landing as the reconstruction winds down. The fear is that economies fueled by aid dollars will deflate after international agencies pack up. Indonesian officials have warned of mass layoffs in Aceh in 2009 when BRR, the donor-funded national reconstruction agency, is due to close. A government survey found that at least 40,000 may be left jobless by the drawdown in foreign aid.

"A lot has been rebuilt, but what will happen when all the money has gone?" asks Yusuf Irwan, a self-employed mechanic in Banda Aceh, the provincial capital and aid hub.

Another challenge is preparing coastal communities for possible future natural disasters. A UN-led multidonor effort has begun to install tsunami warning systems in the Indian Ocean, similar to those used in the Pacific Ocean. These include undersea sensors and buoys linked to national centers that can issue warnings and share data with other countries.

Had a warning system existed in 2004, authorities would have had time to evacuate coastal areas. Today, countries are better prepared to cope with a tsunami, says Orestes Anastasia, a project manager for USAID, which supports the UN initiative.

That was borne out by a deadly Sept. 24 earthquake in West Sumatra that damaged thousands of homes and triggered a small tsunami. Indonesian authorities issued a tsunami warning within five minutes of the 8.4-magnitude quake, allowing coastal villages to respond ahead of the waves.

To avoid a post-aid bump, planners in Aceh are looking to investors to help revive a private economy that was based on agriculture, fishing, and revenues from a depleted gas field operated by ExxonMobil. But investors are waiting for signs that a landmark 2005 peace deal with the armed Free Aceh Movement, or GAM, that has devolved power to the province, won't sour.

The deal ended three decades of fighting and led to the demobilization of thousands of combatants and the election of a GAM member as provincial governor. Many Acehnese fear a return to conflict as GAM fighters turn to petty extortion and factions battle over the spoils of peace, warns the International Crisis Group, a Brussels-based think tank.

That view is shared by Iqbal, a farmer and drugstore owner who spent two years living in a refugee camp. "Nothing's changed," he complains. "Rebels still ask for money."

Yet such gloom overlooks the sense of renewal in Aceh, says Damien Kingsbury, an associate professor at Deakin University in Melbourne, Australia, and an adviser to GAM on peace negotiations. Acehnese are finally exercising political freedoms in a post-tsunami atmosphere of opportunity, despite hardships. "The people of Aceh appear to feel as though they have recaptured some of their pride. They have survived a devastating tsunami and a horrible and destructive war and have come out on top," he says.

A sense of renewal is also palpable in Tamil Nadu, though the pace of rebuilding is slow and dogged by controversy over where survivors should live. Of the 53,323 houses due to be built during the first phase, only 29,446 have been completed, and thousands of families are stuck in temporary relief camps.

Much of the new stock is going up away from the coast where survivors made their living. State authorities have designated a half-mile exclusion zone from the sea on grounds of safety. Some aid agencies call this a ploy to grab beachfront land for resorts and hotels.

"Removing people from their original habitation will negatively impact livelihoods of people," says Babu Matthew, director of Action Aid India. "The safety of people can be assured through better early-warning systems and other disaster risk-reduction measures."

Other countries have backed off similar proposals. In Thailand, that spurred hoteliers to rebuild resorts. The province of Phang-Nga, where foreign vacationers were among more than 8,000 dead, expects tourist income to return to pre-2004 levels within three years.

In Aceh, 100,000-plus homes have been built, along with 1,240 miles of road, 800 schools, and 600 hospitals and clinics, according to the agency BRR. But some 3,000 families still live in shelters around Banda Aceh, and some international agencies have drawn flack for building substandard houses. In areas, homes stand empty as recipients have gone elsewhere, a symbol of wasted resources.

In Sri Lanka, a government reconstruction agency has wound down operations, falling short of a target of more than 100,000 new homes. Rising military spending on the civil war is inflating prices for cement and other materials. A local newspaper reported Sunday that only $1.7 billion of $3.1 billion pledged by foreign donors had been dispersed.

Tom McCawley in Jakarta, Indonesia, and Anuj Chopra in Madras, India, contributed.

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