Aceh disaster management a 'test' to lure investors

Aceh disaster management a 'test' to lure investors

Zakki P. Hakim, The Jakarta Post, Jakarta

The government's ability to handle unprecedented relief
operations and channel donations from the international community
to tsunami victims in Aceh will be a crucial test for convincing
potential investors to put their money in the country.

"They (the investors) want to see how do we manage the
situation, whether with confidence or confusion," State Minister
for National Development Planning/Chairwoman of the National
Development and Planing Agency (Bappeans) Sri Mulyani Indrawati
said on the sidelines of the two-day Infrastructure Summit 2005
on Monday.

She said there were three important issues that should be
addressed by the government in Aceh. First, the establishment of
an efficient management structure where all relief efforts in
Aceh and North Sumatra are directly supervised by the President.

Second, the government has to secure international confidence
by establishing a management structure that ensures
accountability and guarantees that all funds are directed to
disaster areas.

The third is a financial element, where "on-budget" relief
funds received directly by the government are coordinated by the
government, while "off-budget" funds, or donations through non-
governmental organizations given directly to the victims, are
monitored through a soon-to-be-established system. This system
will enable everybody to know who is financing what project,
Mulyani said.

After a massive undersea earthquake and ensuing tsunamis hit
countries around the Indian Ocean, nations around the world
launched a humanitarian relief operation that is the largest in
living memory. Countries, individuals and donor institutions have
pledged nearly US$8 billion in funds to help victims of the
tragedy and tsunami-affected areas rebuild.

A large part of the funds are likely to go to Indonesia, which
bore the brunt of the tsunami with at least 115,000 deaths.

The unprecedented outpouring of aid, however, has raised
concern of the possibility of abuse of the funds. Indonesia in
particular has a poor record with regards to corruption.

The government has said it will need at least $4 billion to
rebuild homes and infrastructure in the devastated Aceh.

Mulyani said the government's efforts in Aceh are basically
divided into three stages: emergency, rehabilitation and
reconstruction.

"We predict the emergency stage will last for the next six to
12 months," she said.

She said the most urgent need now was the construction of
temporary shelters for displaced persons.

The rehabilitation stage will dominate the activity in Aceh
for another 18 months, she said. Finally, the reconstruction
stage will continue for at least the next five years. This stage
could include the construction of 500,000 permanent houses at a
cost of about Rp 3 trillion (about $326 million).