Economic damage to Sri Lanka from the tsunami equalled 4.4 percent of gross domestic product, with $1.5 billion needed for recovery and reconstruction efforts, the World Bank said on Wednesday, citing a survey by aid donors. The Asian Development Bank, the Japan Bank for International Cooperation and the World Bank jointly assessed the damage to housing and the fishing, tourism and transport sectors from the December 26 tsunami, which killed nearly 40,000 people on the Indian Ocean island.

"Total losses are estimated to equal 4.4 percent of GDP with about $500 million in external financing required in the short term for 2005," the donors said in a joint statement.

They urged strong monitoring to ensure that millions of dollars of aid would reach the right people and were used efficiently.

The statement said most of the resources in the short term were required for housing, transportation and livelihood restoration of small and micro enterprises and fishermen.

"Overall incremental financing needs are estimated to be around $1.5 to $1.6 billion. This is in addition to the $200-300 million the government of Sri Lanka has already spent," the needs assessment report said.

The disaster displaced around 443,000 people and destroyed or damaged 65 percent of the country's fishing fleet, the report said.

Sri Lanka's tourism industry, revitalised by a three-year cease-fire between the government and the Liberation Tigers of Tamil Eelam rebels, was badly hit.

"The tsunami caused extensive damage to the sector amounting to around $200 million in damages to facilities, with estimated number of tourists in 2005 now revised downwards by 100,000 people," the statement said.

A record 565,000 tourists visited Sri Lanka in 2004, tourist board figures show.

More than 100 hotels were badly damaged or destroyed by the tsunami, tourism officials have said.

Aid donors set out guiding principles for the reconstruction strategy and emphasised the need to include affected communities in the planning and rebuilding process.

"The tsunami had an impact on a large number of poor people and it is vital now that we do not rebuild that poverty," said Peter Harrold, World Bank's Sri Lanka country director. The donors emphasised the need for a transparent monitoring system in rebuilding efforts, and inclusion of the Tamil Tiger rebels in the process.

The Liberation Tigers of Tamil Eelam have waged a two-decade war for autonomy in northern Sri Lanka, which sustained 20 percent of the damage. The rebels and the government have been bickering over distribution of tsunami aid.

"As we rebuild we must all find ways to strengthen the peace process and bridge differences between communities," Harrold said.

Copyright Reuters, 2005