RI, Australia agree on priorities reconstruction fund
Urip Hudiono, The Jakarta Post, Jakarta
Indonesia and Australia have agreed on how the A$1 billion (some US$806 million) in aid funds will be used in financing reconstruction projects in disaster-affected areas.
In addition to the agreement, Indonesia has also laid the foundations for a stronger economic partnership with Australia in support its intention of becoming a center of economic growth in the Southeast Asian region.
State Minister of National Development Planning Sri Mulyani Indrawati said on Monday that both countries have agreed to cooperate in prioritizing the financing of reconstruction projects.
"For Nanggroe Aceh Darussalam and North Sumatra's Nias island, Australia will disburse A$50 million to finance several projects," she said. "Among them is the rehabilitation of Zainoel Abidin General Hospital in Banda Aceh."
Australia has pledged to donate A$1 billion to Indonesia -- consisting of A$500 million in grants and another A$500 million in 40-year, zero-interest loans -- to help finance the reconstruction of Aceh and North Sumatra.
The earthquake and tsunami on Dec. 26 devastated infrastructure in both provinces and claimed more than 230,000 lives.
Mulyani, Coordinating Minister for the Economy Aburizal Bakrie and Minister of Trade Mari E. Pangestu visited Australia last week to talk about the aid funds and about how to strengthen the economic partnership between the countries.
The government has estimated that the financial needs for Aceh's reconstruction will be around Rp 45 trillion (US$4.8 billion) over the next five years.
Mulyani said the agreement was important to show the growing partnership between Indonesia and Australia, as usually donor countries would determine themselves which projects would be financed by their aid funds and who would implement them.
"The agreement means that projects financed by the fund will not only benefit Australian companies, but will also benefit Indonesian companies," she said. "Even local Acehnese companies are welcome to participate in the reconstruction projects."
But she emphasized that the funds would not be used for reconstruction projects in Aceh alone, as Australia had asked that funds also be used for reconstruction projects in other disaster-affected areas in Indonesia.
"Funds will also be disbursed for projects in Nabire and Alor," she said. "Australia has been interested in disbursing a portion of the funds to capacity development programs and to support economic reform in Indonesia."
Earthquakes devastated Nabire in Papua and Alor island in East Nusa Tenggara last year.
Meanwhile, Aburizal said Australia had also agreed to upgrade its bilateral partnership with Indonesia, including establishing a better understanding between the two in political, economic and security affairs.
"In the economic sector, Australia will increase its investment in Indonesia, particularly in tourism," he said, without elaborating.
Aburizal explained the recent talks with Australia would be part of the government's larger framework of establishing economic partnerships with other countries in the region.
"Besides Australia to the south, Indonesia -- along with ASEAN -- will also engage in similar partnerships to the west with India," he said, explaining that if Indonesia only focused on partnerships to the north such as with Japan, China and Korea, then it would possibly become marginalized in the region.