Post-tsunami Aid Effectiveness in Aceh

EDITOR’S NOTE: The 2004 Indian Ocean tsunami prompted the largest reconstruction program in the developing world at the time. Harry Masyrafah and Jock MJA McKeon, two World Bank Indonesia analysts, assess information management, aid volatility and fragmentation in a working paper for the Wolfensohn Center for Development at Brookings. A few excerpts:

On December 26, 2004, an earthquake measuring 9.0 on the Richter scale struck off the north¬east coast of Nanggroe Aceh Darussalam (Aceh) on the island of Sumatra, Indonesia. In the subsequent tsunami that followed, over 150,000 people lost their lives, while an estimated 700,000 people were dis¬placed. The scale of the damage to the local economy, infrastructure and administration was unprecedented..

The influx of aid and assistance into the province of Aceh in the weeks and months that fol¬lowed was unprecedented and surpassed all expecta¬tions.

At the time the tsunami struck, Aceh had been home to a separatist conflict for 30 years. The influx of aid was seen as an opportunity to reach a peaceful settle¬ment of the insurgency and for all parties to work to¬wards community development, not only in rebuilding Aceh, but building it back better. Nearly 500 agencies flooded into the province, bringing funding and prom¬ises of a brighter future, whilst creating the enormous logistical challenge of doing so without duplicating ef¬forts and squandering resources.

The second section of this paper looks at how the Government of Indonesia and the international com¬munity responded in the aftermath of the disaster and details the extent of the damage and the amount of funding provided towards the reconstruction pro¬gram.

This section also examines some of the many issues that faced the reconstruction of residential houses in the province and puts into context the enormity of the task of rebuilding homes.

The third section examines why agencies began to fail to deliver on promised outcomes despite adequate funding. The fourth section goes on to assess whether the prolifer¬ation of agencies involved was effective and examines some of the costs associated with a large number of agencies whilst the fifth section reviews some of the various coordination mechanisms that were put in place to deal with this. Finally, the sixth section exam¬ines the key information systems used whilst delving into some of the problems experienced by the users of the systems.

Post-tsunami Aceh has been one of the largest reconstruction projects ever seen in the devel¬oping world. As such, the reconstruction experience in Aceh offers a unique insight into delivering recon¬struction aid and development in a post-disaster en¬vironment.

Aid volatility

The experience of high volatility in the delivery of aid was avoided in Aceh. With an estimated US$7.7 billion promised for reconstruction, 83 percent had been allocated to specific projects after three years. The delivery of aid as promised was supported by the Government’s sound management of macroeconomic conditions, well-managed funding mechanisms, and clear evidence that those affected by the disaster were benefitting from the aid.

Many actors struggled to deliver on their promises due to the emergence of inflation, which caused high output volatility. Despite low volatility in aid delivery, volatility in aid outputs became as issue.

Aid fragmentation

Despite the presence of nearly 500 agencies, the reconstruction landscape was only “moderately” concentrated. Whilst this may surprise many, the “moderate” concentration of the reconstruction land¬scape reflects the efforts to pool substantial funds by the Government and major donors.

The creation of a single agency, in the form of the BRR, to coordinate the Government’s response, to¬gether with the pooling of funds by donors into a Multi-Donor Fund, had direct and significantly posi¬tive effects on coordination. By concentrating funds into these two agencies, direct and indirect costs were mitigated, forums for open dialogue were created and waste was significantly reduced.

The creation of peak representative bodies greatly improved the coordination effort. However, NGOs failed to assemble a single point of contact, opting instead to convene multiple functional working groups

Information management

Robust information systems are vital and should be in place from the start of the reconstruction process to ensure effective coordination. The systems need to have full support from all actors through continually updating information in order to enable efficient planning, coordination and monitoring. A vigorous and consistent methodology is necessary, from the initial assessment of damage and losses through to the establishment of community needs and the on¬going tracking and monitoring of expenditures from reconstruction players.

A simple, largely manual financial tracking system worked best in the Aceh context.

The design and use of “concept notes” by the Government to track projects by non-government actors was a criti¬cal success factor in the reconstruction effort. This mandatory mechanism to capture project information from NGOs gave the Government full details of recon¬struction projects, including the financial value of the projects, the planned outputs and the location of the activities. It also provided the baseline data to identify gaps in meeting needs and enabled the Government and other agencies to allocate resources to meet those needs.

Effective transitioning

The early involvement of local government agen¬cies in decision-making processes supports the ef¬fective transition into longer-term development.

However, given that Aceh’s local administrations where newly formed and often distracted by local elections and issues relating to decentralization, they assumed only minor roles in decision-making process.

The issue of transitioning from the reconstruction phase to the development phase requires further study. The broader issue of the transition to longer-term development in Aceh needs to be well managed if it is to be successful. More work is required in this area to ensure that the challenges that the transition presents can be overcome smoothly and the economic sustainability of the province protected.

Re-published with permission by the Wolfensohn Center for Development at Brookings. Visit the original article.

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