AFTER THE TSUNAMI – HARNESSING AUSTRALIAN EXPERTISE FOR RECOVERY
Canberra, 31 March 2005

Disaster recovery – processes, implications and management
Mr Murray Proctor
Acting Deputy Director General, Asia and Corporate Resources, AusAID

Powerpoint presentation (1185KB)

The Honourable Tim Fischer, ladies and gentlemen, thank you very much for this invitation to speak today. I appreciate time is very tight, so I will seek to be prompt.

I would like to cover three things. One is very briefly to recap what happened in the first week of January. More importantly, I think, I will also talk to the future about the recovery and reconstruction process, particularly as it applies in Banda Aceh and Indonesia, which is probably of significant interest to you in terms of intellectually but also in the scope of Australian funding that will be applied to that. And finally, if you can bear with me, I will just have some personal reflections on drawing on expertise in these situations, at least as I have seen it in the past.

Australia’s emergency response
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Let me go first, very briefly, to the first eight days after the tsunami. An amazing range of things happened within Australia alone, and of course you could see that reflected in many other countries of the world. Others have spoken to these; could I point out that, in terms of the Australian aid program, an initial $10 million from our existing funding was then added to by the government, by $50 million, for the initial regional response.

AIPRD overview
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By the end of the first week the Prime Minister had announced a commitment of A$1 billion for the Australian-Indonesian Partnership for Reconstruction and Development, which is of course not just about Banda Aceh, as he made very clear at the time, but a longer-term commitment by Australia for that reconstruction, for other needs through disasters and events in Indonesia, and to accelerate the long-term development of Indonesia.

So what does that in fact mean? It is a jointly announced billion dollars, a five-year time horizon, half of the money in grant aid – as we traditionally provide – and half of the money in very concessional loans, totally additional to our ongoing bilateral program that is run for the government by AusAID. (That is, as you can see there, A$0.85 billion over five years.) So it is heavily focused on partnership between the two countries. As I said, it is not just about the tsunami, although a significant amount of money from this commitment will go there – and of course now to the earthquake-stricken areas around Nias.

The emphasis really was longer-term, on sustained cooperation, the economic and social development of Indonesia, and, of course, the reconstruction.

Just to let you know how it works, because this is rather unusual in our system: there is a Joint Commission, overseen by the President of Indonesia and our Prime Minister; there is a Joint Commission, notionally chaired by those leaders but in fact probably more often attended by the Foreign Ministers of the two countries, our Treasurer and the Planning Minister from Indonesia. That annual meeting will set the overall direction of priorities for the billion-dollar package.

In reality, of course, the more immediate decisions will be made by the Secretaries Committee – on our side, at least, chaired by the head of Foreign Affairs and Trade, with the Secretary of the Treasury, the head of the Finance Department and the Director General of AusAID. And they will advise Australian government ministers of proposals and process. In reality, there is a Secretariat based in Foreign Affairs, and AusAID will be implementing more of the actual activities. We have placed a whole new operation into Jakarta, headed by a senior liaison officer who, amongst other things, actually does speak Bahasa Indonesian, along with most of her team.

AIPRD early priorities
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What will this money do? There is no full answer to that, partly because it is a partnership; we have to work through with Indonesia what its priorities are. However, on 17 March there was the first meeting of the ministerial Joint Commission, and that committed itself to a number of things. Particularly, rehabilitation of Aceh will focus on the hospital infrastructure and capacity-building – as others have pointed out, a large number of people (60 per cent of the hospital staff, for instance) were just killed and it is not there – and, more broadly, help to restore education and health services and other local government services.

There was also an initial commitment to the notion of better linkages between the two countries, with a government partnership fund. Initially this will focus on expertise, knowledge-sharing and capacity building in the two areas of economic governance and public sector management. That reflects very much, I believe, the concerns of what is needed to accelerate growth in Indonesia.

AIPRD early priorities (continued)
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David Templeman has talked about disaster preparedness. You will notice that one of the other early priorities for this initiative is to actually help Indonesia develop its capacities to respond to disasters, particularly at the community level. That will involve a partnership between Indonesia’s disaster coordination agency and Emergency Management Australia, particularly focused on boosting community organisations such as Muhammadiyah, which is a moderate Islamic group that is culturally present in very many of the communities of Indonesia.

So what has been achieved? (I will finish on the process at this point.) The first Commission meeting on 17 March agreed the principles for the relationship, how it will be governed, an overall loan framework, those early priorities and procurement arrangements. I will just flag a couple of those.

Loans are yet to be determined. They are a specific focus, although they are generally about accelerating development, and loans tend to be for infrastructure, of course.

The procurement arrangements are open to New Zealand and Australian providers and to Indonesian firms, measured by at least 51 per cent ownership by Indonesians.

In the next couple of weeks you will see workshops that were flagged earlier by Mr Billson, respectively over the next week from Monday in Sydney, Brisbane, Melbourne, Adelaide and Perth, with Darwin to be done shortly thereafter, at a time to be set.

We are in the process now of looking at some very detailed project designs for those early measures I mentioned to you, and you will be seeing increasing amounts of open tendering, or at least seeking expressions of interest for firms to work in particular areas.

This is an enormous challenge, and of course the earthquake of the last few days has only made it worse – for Indonesia more than ourselves. I suppose I should flag that the Indonesian President was to visit today. That has been postponed; I am sure I would not surprise you by saying that further initiatives under the billion-dollar package will almost certainly be announced when he does come down.

Let me turn now very quickly to the challenges in reconstruction. There is always a process which is not handled well, around the world, of going from immediate relief to reconstruction to development. You have seen it in East Timor as still in play, of course: the massive rush of resources and external expertise in the relief phase, and then the much harder and longer-term drag – not that the first phase is easy – to reconstruct people’s lives and economies and to achieve further development.

This is a major debate, and for those of you with an interest in arcane issues such as this, the Brookings Institution did some excellent work for the World Bank and UNOCHA some years ago.

Let me say, just from my experience of the recent tsunami and other matters, that there are some significant challenges. I wanted to reflect on these because I think it relates to the question you are asking in today’s seminar: how does the expertise embodied in this room and this institution come into play in the sense of what AusAID and the government do?

We always have a lack of local knowledge. We are not present in Nias or Banda Aceh on a day-to-day basis, of course. There is always a struggle. And because of the lack of local knowledge, there is always a process of appraisal and assessment needed before you invest large amounts of money there. Some of these look bad in the press. You get people asking how come it is going to take five months to do something. Well, the reality is to know what you should do, to have the agreement of your partner country and to work out that you have got a feasible approach. In this case, particularly, destruction of local government structures took away from us those people we would have worked with, the records and details of what existed there, and the very infrastructure for the delivery of government services.

In this extraordinary event we were overwhelmed, I must confess, by the response from the Australian public, corporate entities and other bodies – a fabulous thing in itself but also challenging, particularly in understanding the value of all the offers that are given to us. Could I instance one. A number of different entities offered to provide cattle to Banda Aceh, which may well be the best thing you could do to help re-establish livelihoods there. But these simple proposals often are almost impossible to test in a disaster situation.

Just to take cattle – and not to pick on them in particular – we don’t know what the environmental situation now is; it is hard to even find experts from that area on what is the agricultural process that is going to be undertaken in the future. We don’t know about the disease issues of introducing foreign cattle. We don’t know if the soil is applicable now, through salination or pollution from other sources. All of these questions need to be assessed for every one of these very generous and good offers people have, often quite technically interesting ones. And the same would apply, for instance, in housing – which I will come back to.

Australia won’t be in every sector. People are sometimes disappointed, but in these situations there are so many donors, so many interested parties, and of course the government of Indonesia, that will determine what is done where by whom.

Finally the existing partnerships become terribly important in these very dire and urgent situations. In that relationship I would instance all sorts of partnerships – our expert departments in the Australian government, for instance Treasury and, in this situation, Health, Agriculture and Fisheries in particular, ACIAR, our partner organisation on agriculture. There is also the NGO community, which is now enormously cashed up to respond to this particular situation. There are other donors with a lot of technical expertise, the United Nations organisations and the Asian Development Bank and the World Bank, who of course often are quite substantial holders of expertise on development issues.

Technical expertise
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We need to deal with all of those, and in some ways some of your expertise may be better applied to them, in some of the circumstances when you start talking about longer-term development issues.

When we look for expertise, though – I will finish after this point – what are we looking for? To make it applicable and useful to the immediate requirements of the Australian government’s aid program, of course it has to be appropriate. An instance is housing. A lot of people were very keen to provide us with prefabricated houses to meet the needs of the 100,000-plus families affected. However, even by multiplying, say, the $7,000 cost that some people proposed by that number of houses, you would absorb pretty much your entire billion dollars. And would those houses be suitable for the lives that people lead there? We have to ask, up front and early, these very difficult questions.

I mentioned sustainable livelihoods. Of course things need to be practical, able to be implemented and to be sustained by very low budget levels in developing countries, ergo cost-effective as well.

We need to fit in – and this is really in the realm of some of the expertise in this room, of course – with the priorities of the national government, their cultures and the aspirations of the people in the communities affected.

And of course it is partner-driven. We need to deal very closely with the national government. And, as I have outlined, the Australian initiative is immensely driven by that partnership arrangement.

For those of you who are interested in how these things work and more information on the processes, David [Templeman]’s presentation tells anything you need to know about the Australian system and their immensely capable response. More broadly, the Australian Development Gateway (www.developmentgateway.com.au), which we actually run but which is not actually a government outlet for information – it is to bring in the whole development community – is a useful starting point. It links to an international network based in Washington.

The other thing is a very useful website, www.reliefweb.int, run by the UN, which gives you very immediate information on these situations and what is being done.

Thank you very much for your time. I would thank you personally as well. Some years ago I bought a house in Curtin that had been owned by the Shine family, a product of which, of course, this Dome is named after. I can only pray that the expertise of that family rubs off on the current generation living there.

Questions/discussion

Michael Fay – Australia’s aid program has been focused on the eastern islands. Sumatra was of little or no interest to AusAID up until 26 December. Do you see that after the five years of the current program of reconstruction and rehabilitation, Australia will go back to its previous strategic analysis, and not see itself as having a strategic interest in Sumatra after the reconstruction phase is finished?

Murray Proctor – Look, it is an excellent question and I think I am going to duck it very effectively, to the extent that I just don’t know. I think, to give a serious answer to your question, five years is a fairly long time. We need, I think, to consider what the economic and development situation in Indonesia will be in that time. Just to remind you: there was a period when Indonesia was racing out of poverty in terms of the number of people getting above the $2-a-day level that is the general measure.

I think that the broader development program in Indonesia, the reforms of the current government and the needs of Banda Aceh, in particular, will all drive the decision you are asking about. All we can really say at this point is that we have more than doubled the assistance to Indonesia and, as you have inferred, the geographic focus has changed, or been added to, significantly.

The focus on the east, though, I must say, has always been driven by the fact that that is the poorer end. It is also the end where we Australians have, in a sense, more specific expertise just because of the climatic situation, the trading issues, the proximity to Papua New Guinea and to other countries of interest such as the poorer ends of the Philippines. So I think it has always been a rather natural focus.

But I wouldn’t want you to forget the massive numbers of scholarships, the economic and governance reform programs, which have all tended to focus really more on the central government and the island of Java. So it is not that we have only been operating in eastern Indonesia.