Promoting peace and development in Aceh
Promoting peace and development in Aceh
Andrew Steer, World Bank Country Director for Indonesia, Jakarta
People of goodwill all over the world are rejoicing at the news of a ceasefire in Aceh, and commending the courage of those who negotiated and signed the agreement and the people of Aceh to give peace a chance. Now the task is to implement and deepen the peace. In addition to the vital task of peace keeping and monitoring, this will require that development momentum in Aceh be restored quickly.
Experience around the world shows a very powerful two-way relationship between the restoration of peace and economic development. The arrival of peace can immediately improve the environment for development. And economic development, itself, can help secure and deepen the peace.
Ending the conflict in Aceh can immediately lead to better prospects for development. Due to the conflict infrastructure has deteriorated, business confidence has been very low, credit has often been unavailable, supply chains have been broken, and farmers and businessmen pay some of the highest transport and marketing costs in Indonesia.
These problems can in part be attributed to breakdowns in the quality of infrastructure caused by the fighting, but they are also caused by the many illegal levies that producers have to pay. It is reported that on the West Coast road from Aceh to Medan alone there have been 87 check posts, at which trucking firms have spent an average of 60 percent of their revenues in informal payments.
Travel times have been unpredictable, perishable goods often spoiled, and customers have had little confidence when or if the cargoes will arrive. No wonder that most of Aceh's vehicle stock has stayed off the roads as much as possible, or that its economic activity has stagnated. The peace agreement can help build a platform for renewed confidence and growth, and opens the door for a return to the rule of law.
Evidence from many civil conflict situations around the world indicates that after a cease fire agreement is signed, the path to true peace is only beginning. First, the peace must be kept. Here the right peace monitoring and political arrangements need to be in place and financed. Second, the peace must be sustained and deepened. Here it is vital that citizens see that their lives are demonstrably improved, and believe that government interventions and the allocation of funds are fair and transparent.
Experience suggests that the right kinds of interventions those that build a sense of ownership and partnership among citizens -- can help greatly in the post-conflict context. However, the wrong kinds of interventions especially heavy handed top-down investments, where certain groups are perceived to be benefiting unfairly -- can re-ignite feelings of disempowerment. Aceh thus needs to receive generous, but wise, development support in the coming months and years.
This was an important theme of the Tokyo Preparatory Conference on Peace and Reconstruction in Aceh on Dec. 3, where donors committed to support Aceh's development, and discussed with the Government and representatives of Aceh how best to be helpful.
The World Bank has recently conducted a preliminary review (the full text can be viewed at www.worldbank.or.id) of the impacts of the conflict and development needs. The good news is that despite years of conflict, on average, poverty rates in Aceh are still lower than in Indonesia as a whole. However, in the conflict areas within Aceh, poverty rates are often very high, especially for highly vulnerable groups such as widows and internally displaced people.
In addition, public services in Aceh have also been severely disrupted, with, for example, more than 50 percent of all schools reporting damage, and absenteeism rates among teachers and students much higher than the national average. Access to water, sanitation and power are also low.
There are three immediate priorities for development action in Aceh.
First, meet needs at the community level. The government and donors should support quick-impact, community based programs, and humanitarian assistance. Such programs can help to overcome local conflict and will have direct impact on people's welfare.
Community based programs can help development at the local level, and build trust in the communities. These programs include a broad range of activities already being undertaken by community groups and NGOs, such as those supported by the UN through the Community Recovery Program, Japan's grassroots grant projects, USAID's civil society grants program, and several important government programs.
The World Bank's own positive experience of working with government in the Kecamatan Development Project (KDP) and on a program to support widows and their families in the conflict areas suggests that expanding this kind of program is the most useful way to give significant numbers of Aceh's villagers a quick return on peace.
The KDP is already operating in 2700 villages in Aceh, and could be immediately expanded to all 5000 villages throughout the province. It not only provides the resources communities need to rebuild their schools, clinics, and irrigation systems, but by helping communities plan and work together on their own projects, it can rebuild trust and confidence in villages damaged by the conflict.
The KDP works because it builds on a small number of core principles that support community participation, of which bottom- up planning and a strong emphasis on financial transparency are the most important. Similarly, the programs for widows give productive resources directly to some of the conflict's greatest casualties so that their children can continue in school, eat regularly, and be treated when they are sick.
Second, invest in improved governance and business climate. There is no more important means to build confidence after a cease fire than to establish a fair and transparent administration of justice, increased transparency in government finances and policies, and anti-corruption measures. For citizens, especially the poor, this gives confidence that the system will not be biased against them. For businesses, this gives confidence that contracts can be enforced and illegal side payments avoided. A recent survey of investors in Aceh found the absence of a trusted legal system to be a central concern.
Reviving Aceh's investment climate will be central to successful recovery, since it will be the private sector that creates jobs and drives growth. It will be important that a forum be established whereby investors, small and big, can express their concerns, and together with government seek to design solutions. This can help the government design programs and policies. As the regulatory environment improves, investment in larger infrastructure such as electricity transmission or transportation infrastructure becomes feasible.
Several donors, including the World Bank, are prepared to support governance reforms that will improve transparency, restore the rule of law, and promote public sector responsiveness in Aceh as part of the post conflict recovery program. Increasing trust in the government's ability to make decisions fairly will give everybody a stake in sustaining peace.
Third, plan for the longer term. The cease fire offers an opportunity to include all segments of society in designing a longer term strategy for Aceh's development. This can result not only in a coherent plan for the future, but can build ownership among different citizen groups, as they have a solid say in development priorities, and in how their resources are spent.
Aceh has abundant natural resource wealth, and the Special Autonomy Law means that it will be relatively well-endowed with financial resources (currently the fourth highest fiscal resources per capita nationally). But it is likely that Aceh's wealth from its natural resources will decline sharply in 5-10 years. Citizens of Aceh should discuss how this situation should be managed. One possibility, adopted by several countries in similar situations, would be to establish a scheme whereby the revenues from natural resources are spread over a longer period -- perhaps through a trust fund arrangement. This would help prevent any sharp decline in spending in future years, and would enable resources to benefit future generations. Public engagement in such an exercise would also provide an opportunity to "practice the peace".
At the Tokyo Preparatory Conference on Peace and Reconstruction it was a agreed that a multi-donor mission visit Aceh in the coming weeks to assess needs in more detail, and lay the framework for a participatory public expenditure review. The review would work with government and civil society to see how budget allocations can be set so as to reflect Acehnese priorities. In parallel, donors and the government can work to unblock existing programs that were suspended by the conflict but which can be re-started quickly. Finally, donors can work with Acehnese provincial and local authorities to strengthen their own planning and management capacities.