Part 1 of 2: Does master plan for Aceh rehab drive NGOs away?

Daniel Kingsley, Washington DC

The recent decision by Medicine Sans Frontieres (MSF) to return donor funds intended for victims in Aceh is an indicator that the international donor community is disappointed with the prospects of developing reconstruction projects in for the Acehnese under the new BAPPENAS master plan.

This underlines an important issue that the Indonesian government (GOI) will be facing over the next few months: Donor funding is not a given, and will not arrive to its intended recipients through an agency that is not clearly efficient and equitable. The government has created a facility in the new Reconstruction Blue Print for Aceh (master plan) that allows for "off-budget" contributions from donors to the reconstruction.

This alternative has been offered in spite of requests such as those made by Coordinating Minister of Economy, Aburizal Bakrie at a U.S.-Indonesia Society (USINDO) conference (Feb. 26, 2005). In that forum he told donors that priority for project approvals by the GOI will be given to donors that deposit funds to be directly through the national budget (APBN).

This is understandable from the governments perspective, as "on-budget" facility has been used for many years to allocate both donor loans and state funds to government projects, and it is a time tested method for dispersing funds.

The fact is that the NGO donor communities actually have three alternatives when it come to funding reconstruction in Aceh- the third being to not fund it at all. The donors can also choose to direct the funds to other causes outside of Aceh if they feel that the two other choices do not give them the opportunity to direct funds responsibility on behalf of millions of individual donors from around the world. It is hoped that the architects of the master plan were aware of this fact when it was developed.

Collaboration and cooperation between all stakeholders- GOI, NGOs, multilateral and bilateral donors-should be an important component of this master plan if the government hopes to attract the global contributions of individuals and charities to contribute to successful and sustainable reconstruction in Aceh.

The authors of the new Agency for the Rehabilitation and Reconstruction of Aceh (RRA) master plan may very well have used the wrong approach if complicated regulatory requirements drive donors away from Indonesia. Rather than be subjected to fund flow constraints by the agency, it is very possible that other NGOs will join the ranks of MSF and begin redirecting funds to other causes outside of Indonesia.

International NGOs who review the master plan may realize that the new agency will be requiring them to have a project approved for its technical merits and must have its funds flow directed through various government institutions. This is not surprising as the government is the main stakeholder in the reconstruction process However, equally important partners, all of whom are accountable to the individual donors who have contributed from around the world, are the NGOs and the local government of Aceh.

They are likely to resist providing funds if their interests are not guaranteed by the policy and regulations that govern the project execution process. Just as the Indonesian government right to approve projects must be guaranteed to protect their sovereign interests. It is a dilemma that the Indonesian government has no doubt considered prior to developing the master plan, but it would be unfortunate if they did not consider the possibility that funding is at the discretion of the donors.

A complicated framework for project implementation and funds flow will work against reconstruction and rehabilitation in Aceh, and the losers will be the Acehnese and the government of Indonesia (GOI).

The master plan was a difficult document to produce, and it is clear there will need to be interventions by the government before it is acceptable to both Indonesian and foreign NGOs. If there is no further collaboration and cooperation on the regulatory and policy issues, then it can be expected that more donors will capitulate.

The government needs to address how and where cooperation with the donors can be improved. The capacity requirements of the RRA to effectively manage third party funds, approve projects and award rights for implementation of projects must be addressed collaboratively with all stakeholders.

Once operational, the agency must successfully execute equitable, transparent and efficient project management and funds flow for reconstruction if it expects the donors to participate in the reconstruction process. The current master plan (blue print) is quite vague in defining the crucial implementation processes for both budget and technical administration of project management.

The new director for the reconstruction of Aceh, Kuntoro Mangkusubroto, has already stated in a foreign newspaper publication on May 11 that the blueprint is important, but the actual needs of the people are more important, and that cooperation will be needed for the agency to work effectively. He further stated that foreign governments were waiting for his agency to be up and running before handing out the billions of dollars they had pledged.

Let's hope that this does not become an excuse for formally launching operations prior to consensus building efforts. It is necessary to consult with the international global community, and Aceh communities and government, on the regulatory and operational framework of the master plan. If not, it could become an agency without international partners that is easily manipulated, and the entire funding process will dissolve. Institutional and Policy Concerns

Given that RRA has been created through BAPPENAS, under the Coordinating Ministry of the Economy "umbrella", the government should establish where the separation of institutional policy control begins and ends. A transparent regulatory policy on how the agency will operate autonommously should be disseminated through a public Forum endorsed by the GOI.

This may be necessary to ensure that the agency is actually autonomous from interference at the highest levels after project implementation begins. It is not clear from the organizational structure detailed in volume 11 (of 12 volumes) of the master plan where the levers that control the RRA are being held, and that it is actually autonomous.

This agency's responsibility to the donors and public, and it's high profile, requires it be empowered as an independent regulatory agency. However, the Indonesian government has resisted regulatory bodies since the end of the New Order, in spite of it being one of the key intentions of the reform movement in 1999. Is the RRA an independent regulatory agency?

The writer is an international development consultant who has worked on Tsunami related reconstruction planning for bilateral and multilateral donors in Indonesia and Sri Lanka. He can be reached at dkingsley@tmiconsulting.com