Role of donors in reconstruction

Piet Soeprijadi, Jakarta

The scale of devastation that resulted from the earthquake and tsunami in many nations of the northern Indian Ocean, and especially in Aceh, were well beyond imagination. The sheer numbers lives lost has left much of the population in a state of deep personal anguish and psychological stress. Infrastructure, both physical and administrative, was destroyed or paralyzed.

Facing a disaster of such magnitude, understandably the government was unprepared and initially lost touch. It had no time to properly think through directions, and no time to properly and effectively organize efforts, since a huge number of immediate and urgent problems had to be tackled urgently and simultaneously.

Fortunately, these rescue and relief responses, despite their slow pace, still reached those who badly needed help. The positive results were also assisted by the massive direct assistance by individuals, civil societies, corporations, international organizations and governments around the world.

However, this is only applicable in the rescue and relief stage. The rehabilitation and construction stages of the "New Aceh" will involve much more complex issues.

Up to now the political conflicts in Aceh have not been resolved. The capacity of provincial and regency governments to operate is paralyzed, and the interim administration by the central government in Jakarta is far from effective. This is compounded by heightened demands from the public for a comprehensive settlement of Aceh's problems.

The reconstruction of public facilities and cities as a whole should not just mean building physical facilities but should also properly consider social, cultural and environmental conditions. The transition period will increase tensions between the need to immediately solve urgent problems against the need to adhere to due process. The list of issues is endless.

These complex issues are cannot just be dealt with by international aid, either in-kind or cash, or by corporations or any other organization. Whether we like it or not, it is the responsibility of the government of Indonesia.

The government has the ultimate responsibility to deal with the crisis for its own citizens in a proper, participatory, transparent and accountable manner. It is the government that must take the lead in post-tsunami management, especially to prepare for the stages after rescue and relief.

It is common knowledge that the government's credibility is very low in preventing, handling and eradicating corruption. This has raised doubts as to whether the government will be able to handle public money from all over the world in a transparent manner.

The Jakarta Post (Jan. 10) quoted economist Faisal Basri and NGOs as preferring an independent body to monitor and manage the aid funds in Indonesia "because the public still doubts the government's credibility, as it is still plagued by corruption".

Endy Bayuni said (The Jakarta Post, Jan. 10, God's grace, good governance and our reputation), if donated funds for Aceh were corrupted, it would bring terrible shame to the nation.

However, considering the complexities of the issues, the establishment of an independent body to manage aid will more than likely create new issues rather than solving them. The only way to manage the aid is to allow the government to manage it through its inclusion in the State Budget, but at the same time helping the government increase its own capacity and improve its own internal controls to be able to properly manage the aid.

The benefits of letting the government manage the in-kind and financial aid within the State Budget are many. The needs, wishes and dreams of Acehnese could and should be reflected in the budget through participatory budgeting, so that funds can be effectively channeled to fulfill their needs. The process of implementing the budget, including procurement of goods and services, needs to follow government regulations, as this will drastically minimize potential corruption. One centralized gate will make monitoring of funds much easier.

To address the credibility issue, donor countries can play a very important role. First, donors need to confirm their position to underline that the government has to manage the flow of funds by itself.

Second, donors have to start the transparency processes themselves. Committed aid, either in-kind or financial, should be made public in a coordinated manner. Actual transfers of funds to the government should also be reported to the public. For flexible allocation of funds for the real needs of Aceh, donors should not ear-mark funds for specific purposes.

Third, the government has to manage funds in a fully transparent and accountable manner. To do that, the government has already enacted Law 17/2003 which promotes the implementation of Performance Budgeting. Donors could well provide technical assistance to speed up the implementation of this law. The budget for post-tsunami rehabilitation and reconstruction should be separated from the routine budget but still be part of the total State Budget. To enforce transparency, the government should publish the approved budget, receipts and use of funds in a daily report on a special web site, accessible to everybody.

Fourth, procurement of goods and services using the funds should be conducted through proper, fair and transparent bidding processes and announced publicly on the web site.

Fifth, donors should assist in the development of monitoring and evaluation systems and encourage civil organizations to be involved in both the budgeting processes, and the monitoring and evaluation activities. Fifth, donors should ask the government to appoint an international independent auditor to audit the flow and the use of funds.

Through these processes, donors will promote the implementation of world class good governance in Indonesia, and especially in Aceh. Donors will also ensure that Indonesia retains full sovereign authority and responsibility. By doing all these things, donors will also fulfill their responsibility to their own people who have wholeheartedly donated their money to help tsunami victims.

The writer is the administrative director for Partnership for Governance Reform in Indonesia and can be reached at piet.soeprijadi@undp.org