Role of donors in reconstruction

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