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Tsunami Recovery: Rebuilding Aceh

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Watch Andrew Steer, World Bank Country Director for Indonesia, as he discusses:

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Listen to Andrew Steer talk about:
The need for a land titling project in Aceh
Description of Aceh today

A unique multi-donor trust fund
The Bank's role in the reconstruction process

May 10, 2005—The temperature is more than 37 degrees Celsius. 

But undeterred, a small band of people ignore the heat and pitch tents on what’s now barren land in Aceh.

The nearest water supply is more than a kilometer away.

Yet the people don’t mind, for they have come to reclaim the land on which their houses once stood before last December’s tsunami devastated the region.

“It’s literally extremely hard not to cry when you are there,” says Andrew Steer, the World Bank’s Country Director for Indonesia.

“If you go to Aceh today, you see vast areas – kilometer after kilometer in some places, where it’s like a nuclear explosion has taken place,” he says.

“Not even any rubble is left. The force of the water was so great that not only did it destroy houses, but it took all of the rubble out to sea. So it’s the most eerie, tragic, surreal sight.”

But now more than four months after the tsunami, Steer says in some areas of Aceh, little by little a few citizens are returning and putting small tents on the sites where they lived before.

“So great is the attachment to the land, and so great is the fear that they might lose what they had, people have come back and put small tents there.” 

Steer’s description of his latest visit to Aceh highlights one of the fundamental problems in the reconstruction process – ascertaining where people once lived.

“These were poor communities. Most houses had no legal title, and those that did have been lost. There are no property maps. Many of the people who lived there have been lost.  In such a situation where do you begin?,” Steer asks.

Steer says to deal with the problem, modern technology is being deployed. Aerial photography is being used to show where the houses once stood – for although the homes were wiped out, their imprint remains on the earth.

“But much more important is very low technology – community engagement and participation – talking with the people at the community level.”

Steer says a program – worth $28 million – has already been developed with the aim of re-establishing the legal documentation of housing, including giving legal title to those who didn’t have it before.

The program was the first item on the agenda at a meeting this week of the newly established board of the multi-donor trust fund for reconstruction and rehabilitation in Aceh and North Sumatra.

The force of the water was so great that not only did it destroy houses, but it took all of the rubble out to sea.

At its meeting, the steering committee of the multi-donor trust fund approved projects worth $250 million in grant financing.   They include not only the project for the recovery of property rights to help sort out land ownership, but also $150 million for housing for a thousand villages, $54 million for community recovery projects in rural areas and another $18 million for similar plans for urban areas.  The community recovery programs will be used to restore community infrastructures in urban and rural areas as well as the   recapitalization of up to 6000 micro-enterprises at the rural level

Multi-Donor Trust Fund

The Bank is the trustee for the $500 million multi-donor trust fund – set up at the request of the Government of Indonesia – to pool aid resources in support of the Government’s rehabilitation and reconstruction program in the region.

Money collected from up to 20 donors will also go to help victims of the recent powerful earthquake on Nias Island, where about 900 people have been confirmed dead.

“The challenge of reconstructing Aceh and Nias is huge,” says Indonesia’s Finance Minister, Yusuf Anwar.

“The government is committed to reconstruct Aceh and Nias better than it was before. We are grateful to donors who have decided to pool their grant fund through this mechanism, as it will promote accountability, transparency and better co-ordination at the same time,” he says.

Transparency a key aim

The key aim of the trust fund is to maximize transparency, accountability and efficiency.

Its establishment follows the Government of Indonesia’s recent announcement it has set up an agency (Badan) to oversee the reconstruction plan for the next five years.
With its headquarters in Banda Aceh, the Badan is intended to serve as a single focal point to coordinate the reconstruction process.

Steer says the trust fund will be based in the agency’s office in Banda Aceh.

“We’ve already opened an office in Banda Aceh and expect about eight or nine donors to be part of that office, so we can really co-ordinate as best we can,” he says.

Steer says the trust fund's  steering committee includes representatives from the government, donors as well as civil society representatives from Aceh.

“So we hope this will be a very efficient mechanism where a request for funding will come and we will very quickly start allocating funds. The secretariat will then monitor and ensure the funds are well used.”

“The World Bank has given $25 million as a grant to the fund. The entire fund is a grant. The government of Indonesia doesn’t need to borrow money as there are such generous grants available.”

Steer says the scale of the trust fund will be much larger than most – and will feature strong oversight mechanisms.

“An independent agency will be looking at the entire reconstruction program in Aceh. One of the things we will be doing as a multi-donor trust fund is really helping strengthen the government’s capacity to oversee the whole reconstruction program in Aceh.

“With these vast sums of money coming in, it will be very tempting and easy for funds to be misused. So the President of Indonesia has decided – given how unique the situation is – that unique governance mechanisms need to be established for the management of the overall reconstruction. So we’ll have a very unusual role in helping to create and strengthen that.”

Bank Support

Steer says the Bank already has staff working in key government departments, both in Jakarta and Banda Aceh.

He says about 20 staff will be in the newly-created office in Banda Aceh, which became operational in the first week of March. And he says about another 20 specialists will be placed in the new agency the government is creating in Banda Aceh.

The Bank is also restructuring its programs for Indonesia and is expanding its well-known community based program in Aceh. (See related story)

“I think we all recognize that this is a very very difficult process that we’ve embarked upon. Everyone recognizes that. No-one is trying to imply they have all the answer. The answers will require humility, teamwork, and high energy professional engagement, motivated a moral compassion for those who have suffered this great tragedy”, Steer says.  

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