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On 5 January 2005 the Prime Minister announced that Australia would give $1 billion over five-years to fund the Australia-Indonesia Partnership for Reconstruction and Development (AIPRD). The AIPRD is additional to Australia's other ongoing cooperation programs including AusAID. This initiative will bring the provision of aid to Indonesia to a total of $1.8 billion over the next five year - 2005 - 2011. This will be done through sustained cooperation focused on the Indonesian Government's programs of reform, with an emphasis on economic and social development. The package will consist of $500 million in grants and $500 million in concessional loans. The objective of the AIPRD is to support Indonesia's reconstruction and development efforts, both in and beyond tsunami-affected areas. While there is a clear focus on areas devastated by the tsunami, all areas of Indonesia will be eligible for assistance under the partnership.
Frequently Asked Questions (FAQ) - updated 6 September 2005 What is the Australia Indonesia Partnership for Reconstruction and Development (AIPRD)? The Australia Indonesia Partnership for Reconstruction and Development was announced by the Australian Prime Minister, John Howard, on 5 January 2005. The AIPRD commits $1 billion to reconstruction and development in Indonesia over five years. The AIPRD is the single largest aid package in Australia's history. It brings Australia's total aid commitment to Indonesia to almost $2 billion over five years. What is the objective of the AIPRD? The AIPRD is supporting Indonesia's reconstruction and development efforts, both in and beyond areas affected by the Indian Ocean earthquake and tsunami of Boxing Day 2004. Whilst the AIPRD was developed in the aftermath of the Indian Ocean disaster, its aim is to assist Indonesia's broader efforts to raise living standards for its people through sustainable development and economic growth. The Prime Minister has said the AIPRD will be a long-term program of sustained cooperation and capacity building and that all areas of Indonesia are eligible for assistance. What assistance did Australia provide to help tsunami victims after the disaster? As at 30 June 2005, all funding ($68 million) committed to emergency relief and initial rehabilitation work in tsunami-affected areas in Indonesia, Sri Lanka, the Maldives, Seychelles and Thailand had been fully spent. As at 5 September 2005, $45 million has gone to fund relief and rehabilitation projects in Indonesia's devastated Aceh and North Sumatra provinces, which were hardest hit by the disaster (over $34 million in emergency response and over $10 million under AIPRD).
Why hasn’t more money been spent? Funds have been committed rapidly and are flowing quickly, making a real difference to help those in need. But there is more to the reconstruction challenge than simply providing funds, and this is not a race to spend money. If we don’t carefully plan and prepare how the funds will be used, they may be wasted, or do more harm than good. In housing, for example, villagers are painstakingly re-establishing property boundaries and land titles in order to give people the confidence and certainty they require to rebuild. This has to be done accurately to avoid conflict and future disputes. The skilled workforce – health workers, teachers, university staff, trades and business people, and government administrative staff – has been decimated by the disaster. Farmers and fishermen have lost their livelihoods and communities have been uprooted. While repair of physical infrastructure is important it is also essential to rebuild skills, get people back into work and re-establish communities. These are exactly the sorts of reconstruction projects Australia is now implementing. Who decides what projects will be funded? Decisions about priorities and projects are being made jointly by the Australian and Indonesian Governments after careful consideration of proposals. This is because we want to ensure that the funds are spent effectively, in areas that will make a positive impact in areas of real need. These decisions are being made by a Joint Commission overseen by the Australian Prime Minister and Indonesian President and comprising the foreign ministers and economic ministers from both countries. It is critical that these funds be properly accounted for. The Australian Government and Indonesian Governments have clearly committed themselves to the highest standards of accountability and transparency in the management of the AIPRD. All funds will be managed through systems and processes already established by AusAID. These include mechanisms to ensure adherence to relevant obligations under the Financial Management and Accountability Act (1997) and regular reporting on achievements through AusAID's annual reports. How will projects under the AIPRD be financed? Projects under the AIPRD will be financed through a $500 million grant assistance program, which will be managed in accordance with the existing General Agreement on Development Cooperation between Australia and Indonesia, and a $500 million highly concessional loan program. Concessional loans are an important element in financing development expenditures in many developing countries. The use of loans alongside grants is an established practice in promoting economic and social development in Indonesia. Loans are used by the World Bank, the Asian Development Bank and major bilateral donors such as Japan and Germany. The AIPRD loan program will not significantly affect Indonesia's capacity to service its international debt. Indonesia's foreign debt was around 49 percent of GDP in 2004, compared to over 100 percent during the 1998 financial crisis. The AIPRD loan program is interest free and repayments will be made over 40 years, with a ten year grace period. How is Australia's aid to Indonesia being spent? (as at 6 September 2005) In the initial days, weeks and months following the disaster Australia's efforts were focused on providing the resources needed to treat victims, stop the spread of disease, clear debris from roads, restore essential services and provide necessities such as food, clean water and shelter. The emergency phase is over and people's immediate needs are being met. Now the rebuilding process is underway. The focus in this transition phase is on the restoration of vital community services such as the major provincial hospital and village halls; and transport infrastructure, such as restoring port facilities, in order to accelerate the reconstruction process. Australia's aid is helping re-establish and re-equip medical services and essential pharmaceutical supplies, restore water supply and sanitation services, re-equip schools and repair essential infrastructure. Support is also being provided to help upgrade the skills of education and health professionals who must fill the significant skill shortage left by the disaster. More than 11,000 hectares of land have been affected by the disaster, over 230 kilometers of roads have been destroyed and around 240,000 pieces of land are without evidence of land title. Rebuilding the communities of Aceh will not be completed in a matter of months. It will take years. Beyond Aceh we are working closely with Indonesia to help strengthen its emergency preparedness, management and response systems to help minimise the loss of life and livelihoods in future disasters. In addition, we are providing assistance to help communities in other disaster affected areas like Alor, Nabire and Nias. We are also helping to improve economic, financial and public sector management standards in Indonesia, and develop the capacity of Indonesia's future leaders by offering new scholarships to study in Australia. Further AIPRD activities will be developed and agreed in cooperation with the Indonesian Government through the Joint Commission. What are some examples of these activities? The main hospital in the capital, Banda Aceh, is a teaching and referral hospital for the province, which services a population of over four million people. The earthquake and tsunami caused major structural damage, destroyed medical equipment and killed patients and medical staff. Australians, including defence force personnel, have helped restore services and many parts of the hospital are fully functional again. Buildings are clean and freshly painted. Damaged equipment has been replaced and nurses are able to look after their patients again. It is expected that by the end of this year major hospital refurbishments, such as the emergency ward, will be complete. In Aceh work has started on more than 42 construction projects, including building village halls where people can meet and manage their affairs until their homes are replaced. These village halls are central to the redevelopment of communities and are being funded by Australia. AIPRD is helping with the critically important but difficult and time-consuming task of establishing ownership of land. When the tsunami struck, it washed away land title records and major landmarks and left large tracts of land under salty water. Before new homes and buildings can be erected, there needs to be agreement about who owns the land. Boundaries and property rights need to be re-established. This has to be done carefully and accurately to avoid disputes in years to come. AIPRD is also helping to rebuild, refurbish and re-equip schools, including those that cater to the poorest families. For many children, school has become a temporary home while their parents seek to re-establish and rebuild. In areas such as health and education, where so many professionals were killed leaving critical skill shortages, AIPRD is providing essential training and support to fill these skill gaps. These and other important activities are being undertaken in cooperation with the Indonesian Government, local authorities and communities. Why is the $1 billion package not just focused on Aceh? The world responded quickly and generously to the plight of tsunami victims. The Australian public donated more than $343 million to various charities and non-government organizations. The Australian Government also provided funds to these organizations to carry out important relief and rehabilitation work such as providing emergency shelter, food and clothing, medical supplies and trauma counselling. The Australian Government is now helping to restore health and education services and rebuild vital community infrastructure that will accelerate the reconstruction of towns and villages. The needs of tsunami victims are a priority and Australia is committed to helping them. However, Indonesia also needs our help to reduce significant and continuing poverty in other parts of the country. Australia will work with and support the Indonesian Government's reform program and help the country grow and prosper by developing its people, its infrastructure and its governance systems. Thus, the AIPRD will support projects that help to improve Indonesia's economy and the living conditions of its people, not just in Aceh, but right across the archipelago. For example, assistance to improve the productivity of rural industries will promote growth, jobs and better standards of living for the more than 135 million Indonesians living outside urban areas. When will houses be rebuilt in Aceh? Over 170 reconstruction projects have already been approved for commencement, including the construction of 20,000 new houses and the repair of 30,000 existing houses. On current estimates it is expected that demand for housing construction in Aceh will be met by current pledges from the international and donor community. This process is being led by the Aceh implementation authority (BRR) appointed by the Indonesian President. Australia was one of the first donors to provide practical, on-the-ground support to BRR, which is tasked with implementing the Aceh reconstruction ‘master plan’ and ensuring cooperation between donors. But all donors and the Indonesian Government are confronting significant challenges in progressing reconstruction in Aceh, for example: the remains of many houses are still under water and landmarks no longer exist making it difficult to agree and establish property boundaries. Documents, including land titles, have been destroyed. With the help of the Australian Government villages are painstakingly reconstructing property boundaries and re-establishing property rights to provide the security necessary for people to start construction. AIPRD's processes and technical standards have been agreed with the national land office and are being applied across the province. Cartographers have been employed and are training land mappers to produce land maps for communities across the province. Already many maps have been completed and handed over to communities and many more will be completed by year's end. As the maps are completed and endorsed, NGOs and donors are committing to build houses in the mapped areas. How will the Australian Government ensure that its reconstruction assistance will be delivered in an environmentally sustainable manner? All Australian funded aid activities undertaken through the AIPRD are being managed in line with the Environmental Protection and Biodiversity Conservation Act (1999) as reflected in Environmental Guidelines for Australia's Aid Program. The guidelines establish AusAID environmental obligations and require that projects be consistent with ‘best practice’ principles of environmental management. AusAID, in conjunction with WWF-Australia, has developed specific clauses in contracts for those involved in reconstruction activities which specify the use of sustainable materials and avoidance of dangerous materials (such as asbestos). How can Australian companies benefit from the AIPRD? (as at 6 September 2005) Australian, Indonesian and New Zealand firms are eligible to tender for projects funded under the AIPRD, and requests for tenders are issued in Australia, New Zealand and Indonesia. Further information about business opportunities and tendering arrangements is available here. Australia to fund new Aceh reconstruction work
Australian assistance under the AIPRD is directly addressing such needs:
Other areas of Indonesia will also benefit from today's announcement, with $25 million being allocated to a Smallholder Agribusiness Development Initiative to promote efficient production in areas such as horticulture, livestock and aquaculture. Under this program we will improve access to technology for rural enterprises, help to improve business practices and address critical constraints such as market access, finance and infrastructure gaps. This will help to improve living standards and reduce poverty in rural areas throughout Indonesia where more than 135 million people live. Guiding Principles of the Partnership In pursuing this objective, the two countries will work together in a spirit of genuine partnership that will:
Australian Ambassador, David Ritchie presented certificates to 107 Alumni who have recently returned from Australia acknowledging their participation in the Australia Development Scholarships (ADS) Program. There were about 300 ADS Alumni who attended the ADS Alumni Dinner & Certificate Presentation at the Mandarin Oriental Hotel Ballroom. "These scholarships to Australia are an important tool that can help to develop Indonesia's future leaders. The scholarships allow people to gain knowledge and skills which will help the development of Indonesia when they return home after finishing their study," David Ritchie said.
The Australian government, through AusAID,
has been providing scholarships, now known as Australian Development Scholarships,
to Indonesians for study in Australia since the early 1950s. During this
period, over 8000 Indonesian have studied in Australia through the scholarship
scheme. The program currently offers 300 scholarships per year at the
post-graduate level to Indonesians in both the public and private sector. |
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