By Matthew Moore
Herald Correspondent in Jakarta
March 10 2005
The huge international aid effort promised for Aceh is in jeopardy, the Indonesian minister responsible for it has warned, because the operation lacks co-ordination and there is no agreed plan on how to spend the funds.
The chairman of the National Planning Agency, Sri Mulyani Indrawati, has called on donor countries such as Australia to put more of their aid money through the Indonesian budget instead of insisting their donations and programs be kept separate.
Australians have donated more than $200 million to tsunami aid and the Government has pledged $1 billion to a new body it plans to run jointly with the Indonesian Government. Like other big donors, including Japan and the US, it has insisted the money be kept outside the Indonesian budget.
Diplomatic and donor organisation sources have told the Herald that there is huge competition between those trying to fill the more prestigious projects in Aceh, such as building schools and roads. Aid groups are competing to recruit staff from the small pool of Acehnese with the skills needed for the rebuilding.
This inflates their salaries enormously. Many of these skilled workers are being poached from jobs with the Indonesian Government, draining its expertise.
In a speech delivered on her behalf to donors in Paris, the former executive director of the International Monetary Fund admitted she was "frankly" worried that the desire of so many donors - including governments and aid groups - to plan their own programs quickly was overwhelming her government.
"It is too hard for my own staff - let alone the local governments in Aceh that have been so devastated by this crisis - to have to deal with the additional challenge of different standards and rules for so many different donors," Dr Indrawati said.
Her speech reflects the frustrations of many aid workers on the ground in Aceh who complain that while billions of dollars have been pledged, it is often impossible to get money for simple projects because of restrictions each organisation has on how its money can be spent.
While Dr Indrawati expressed "deep gratitude" for the outpouring of generosity from foreign countries and donor groups, she outlined a series of changes she believes are vital to ensure the co-ordination of all the different aid plans from various countries.
"First, if we are serious about harmonisation, then donors should channel a higher share of their funds through the Government budget, and the Government must demonstrate that it is worthy of this trust," she said.
Dr Indrawati said she respected the choice of some donors to put their funds outside the budget, but argued the money would be better used if it went through the budget and became part of a single plan. That would see it tracked, audited and evaluated to ensure it was well spent.
"Let's be realistic," she said. "Co-ordination does not happen by bringing donors together for weekly co-ordination meetings. It happens by bringing donor funds into the budget under a well-formulated recovery and reconstruction strategy."
Dr Indrawati acknowledged that many donors want to keep control of their own money because of Indonesia's notorious corruption, but said they should instead take part in monitoring it by joining a new oversight board.
"We understand that we will need to put in place a strong and independent governance framework to ensure accountability, transparency, participation, fairness, effectiveness and integrity. This week we will be announcing governance arrangements for the reconstruction that are unprecedented in the history of Indonesia."
As well as trying to co-ordinate donations from foreign governments, Dr Indrawati said well over $US1 billion ($1.25 billion) raised by scores of charities and other aid groups could not be well spent unless it became part of the Government's overall plan.
"Given the size and scope of these non-official funds, the success of our recovery and reconstruction strategy will depend on how well these funds are integrated into a broader framework."
She said Indonesia does not even know how much money has been raised overseas for help in Aceh and called on all embassies to track funds raised in their countries as a first step in co-ordinating how they are spent.
Even if donors ignored her plea to put funds through the government budget, Dr Indrawati said they should all agree on "a common plan ... and monitoring of funds, and common standards of behaviour", especially in areas like procurement, auditing, reporting and local pay standards.
Dr Indrawati feared the world would judge the reconstruction efforts harshly.
"I wonder how history will judge us a year or five years from now. Will the newspaper stories be full of how money was wasted as donors competed against each other for the best projects, and the Government failed to co-ordinate or lead the effort?
"Or will they record how together we introduced a new way of doing business, in which we work in harmony?"
A spokesman for the Australian Foreign Minister said Alexander Downer did not intend to alter the existing plans for a new commission to oversee a joint Australia-Indonesia body.
The body will decide where money pledged by the Government will be spent.
Given the size of Australia's aid contribution, the Government believed it was entitled to have a special arrangement with Jakarta.
The Australian commission will be discussed when a ministerial delegation from Indonesia visits the country next week.
More than $US6.3 billion has been pledged for tsunami reconstruction in Asia, half of which is expected to be spent in Aceh.
Taken from the Sydney Morning Herald. News story also seen in The West Australian.
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