News and Events

printer friendly version

Third Coordination Forum for Aceh and Nias (CFAN3)

Statement
by
Edgar Cua
Country Director
Indonesia Resident Mission
Asian Development Bank

Jakarta, Indonesia
24 April 2007

Director Kuntoro, Vice Governor, Excellencies,

Ladies and Gentlemen:

On behalf of ADB, I would like to congratulate the Government of Indonesia and BRR for the significant progress made in the implementation of the reconstruction program for Aceh and Nias since the CFAN meeting one year ago. This progress would not have been possible without the support from the provincial and local governments, the support from the donors, and the involvement of and contributions made by the people themselves. Considering that the reconstruction program remains the largest of its kind in the world, it is of no surprise that we will continue to face challenges when we start the transition from reconstruction led by BRR to sustainable long-term development under the provincial leadership. The ADB Team stands ready to work even more closely with BRR in this regard.

For this transition to happen smoothly and effectively, we like to see a further strengthening of the coordination and collaboration between BRR and the provincial governments coupled with a gradual but definite transition of implementation responsibilities from BRR to the provincial agencies. The transition clearly calls for further capacity building of the provincial and local government agencies, an observation shared by all of us gathered here today.

At this stage of the reconstruction program, we also need to look at the broader picture of development. We all know that there are areas of poverty outside the Tsunami affected areas in Aceh as a result of the decades-long conflict situation. And in the case of North Sumatera, the island of Nias has suffered from underdevelopment and neglect for a long time. It now seems the right time to undertake a strategic review of the reconstruction program and the programs that the provincial and local governments plan to undertake during the next two to three years. This review should help to direct uncommitted reconstruction funds towards livelihoods programs for “grass-roots” economic development that could be implemented through the provincial government and its agencies with full participation of the local people, including women who play such an important role in the families livelihood. Today, several successful livelihoods programs have been developed, including those developed under the ADB financed ETESP, which could be expanded and replicated rapidly.

Although the reconstruction program is now under full implementation, pressure remains high to further accelerate its implementation. We understand this but social and environmental safeguards, so important for the sustainability of the reconstruction investments, should not be compromised.

Also in a wider sense, we share concerns about the sustainability of our joint reconstruction investments. Provincial governments and their agencies need to gradually take over most of the massive infrastructure that now is being put in place. This creates large liabilities, not only in terms of financial resources for operation and maintenance but also in terms of human resources. None of us would like to see that the investments will become non-functional within a few years after their completion, or worse, not being used at all because of lack of operational resources. We feel that the time has come that major reconstruction partners initiate a high-level policy dialogue with the leadership of the two provinces to reach an understanding how sustainability will be achieved. The Public Expenditure Analyses for Aceh and Nias undertaken recently with World Bank’s assistance and the White Paper of the Donor Working Group on Local Governance provide good background material for such policy dialogue. This policy dialogue could perhaps best be coordinated by the MDF Secretariat on the external donor side.

Finally, we like to take this opportunity to inform you that ADB recently approved a $45 million package of financial support for the reconstruction and modernization of the privately-owned cement plant at Lhok Nga. We believe the active participation of the private sector is crucial for employment creation and the long-term economic development of Aceh and Nias.

Thank you.