Aceh Tsunami Reconstruction Spending on Target: World Bank

Contacts

In Jakarta: Prabha Chandran (62 21) 5299-3084, pchandran@worldbank.org;

In Washington: Elisabeth Mealey 1-202-458 4475, emealey@worldbank.org

JAKARTA, December 22, 2006 --Days before the second anniversary of the tsunami in Aceh and Nias in Indonesia, the World Bank has confirmed that 40 per cent of the almost $600 million in grant funds made available from 15 major international donors has been disbursed on the reconstruction effort.

These funds were pooled together in the Multi-Donor Fund (MDF) for Aceh and Nias, administered by the World Bank at the request of the Government six months after the tsunami of 26 December, 2004. The donors have pledged the following amounts:

By the end of November, of the $591 million currently available through the MDF – ($110 million has yet to be received) $238 million had been disbursed to rebuild 2,100 houses and start work on 6,500 more. Over 1,900 kilometers of roads have been built , 710 bridges, 240 school buildings, 2,300 irrigation, drainage, water and sanitation units and 40 health clinics. All of this work has been carried out by tsunami-affected communities themselves, on the basis of their own priorities, under their oversight and quality control. 

Indeed, the Multi Donor Fund has become the largest employer in Aceh creating 10 million work-days of labor. It granted scholarships to over 7000 children and provided small-scale loans to over 3,500 people. Independent audits by NGOs have commended the Community Driven approach for being cost-effective, efficient and timely in delivering results. This model is now being used to rebuild houses in Yogyakarta.

“A disbursement rate of 40 % in just 18 months has exceeded expectations, given the challenges of working in such remote areas,” said Andrew Steer, the World Bank Country Director in Indonesia. “Its’ easy for outsiders to criticize and, of course, everybody wants even faster progress. In Aceh, however, progress to date has greatly exceeded achievements after most natural disasters.

“One of the big areas of concern that we identified in our 18-month review, however, was the bureaucratic bottleneck that has contributed to the slowness in providing land titles. Without securing legal rights to land, it is very difficult for communities to get on with the process of rebuilding their lives.”

The MDF currently manages a portfolio of 17 projects valued at $713 million. This includes its own project allocation of $482 million and another $231 million from the Aceh Rehabilitation and Reconstruction agency (BRR), for infrastructure development.