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).