Aceh Tsunami Reconstruction

Expenditure Tracking Update

April 2008 Figure 2 : Annual allocations and disbursements

2,500

The amount of funds allocated to tsunami-related Disbursed To be disbursed

2,000
reconstruction projects increased at the end of 2007 to
US$6.4 billion as the Government confirmed its budget 1,500

US$ millions
allocation for 2008 of US$327 million. Donor allocations 1,000
increased by over US$100 million: a combination of
allocations to new projects (US$38 million) and exchange 500

rate fluctuations (US$74 million). 0

2005

2005

2005
2005 - 06

2005 - 07

2005 - 06

2005 - 07

2005 - 06

2005 - 07
Following the devastating tsunami and earthquake,
Donors NGOs GOI
US$7.77 billion in funds have been committed for the
reconstruction of Aceh and Nias, of which donors have NGOs have disbursed two-thirds (66 percent) of their
committed the largest share of US$3.24 billion (42 percent). allocations, whilst the disbursement rate of donor agencies
The Government and non-government organisations of 55 percent is lower due to their focus on longer-
(NGOs) have also contributed substantial sums of US$2.23 term projects. When the long-horizon transport sector
billion (29 percent) and US$2.30 billion (30 percent), is excluded from donors’ overall disbursements, their
respectively. By December 2007, 83 percent of the US$7.8 performance is in line with NGOs, disbursing 64 percent of
billion of funds committed had been allocated to specific their funds.
projects. The remaining 17 percent, or US$1.3 billion,
is yet to be allocated by donors and NGOs, whilst the The amount of funds actually disbursed by projects rose by
Government, through the Agency for Reconstruction and a higher amount than the rise in allocated funds, bringing
Rehabilitation (BRR), has committed all its funds. Donors total disbursements towards reconstruction to US$4.2
are still in the process of identifying projects for up to 25 billion, or 65 percent of the monies allocated. Disbursements
percent of their commitments (mostly made back in early
have been highest in the productive sectors, where 93
2005) as shown in Figure 1.
percent of funds allocated to agriculture and livestock
projects have been disbursed. Disbursements within the
Figure 1: Project financial progress
infrastructure sector have been slower, with less than 50
US$ millions
8,000
percent disbursed within transport, communications,
7,000
Donors - loans, 400 flood control and irrigation works.
6,000
Donor - grants, 2,600
5,000
2,324 Figure 3 shows the disbursement performance of the
4,000 reconstruction players over time. The Government’s BRR
1,289
3,000
NGO, 2,100 1,877
agency started slowly but increased significantly in 2007,
1,233
2,000 spending on average six times more per month than NGOs
1,000 GOI, 2,228 2,228
1,656 throughout the latter half of the year.
0
Commitment Allocated Disbursement
Figure 3 : Disbursement rates
80%

Figure 2 shows that, whilst the growth in allocated funds 70%

has slowed in 2007 compared with 2006, there is a notable 60%

Disbursements / allocations

decrease in the amount of funds yet to be disbursed. The 50%

strong performance of BRR, which has now disbursed nearly 40%

75 percent of its allocated funds, is unsurprising given that 30%

BRR’s limited mandate expires in early 2009 when its work
20%
will need to be completed.
10%
Donor NGO GOI Total
0%
Nov-05 Feb-06 Jun-06 Sep-06 Dec-06 Jun-07 Dec-07

For further detail, please contact Jock McKeon: jmckeon@worldbank.org

Building Back Better

Detailed breakdowns of reconstruction actors’ sectoral Figure 6 demonstrates that housing remains by the far the
allocations are highlighted in Figure 4. This illustrates the sector with the largest need. As such, the sector still has a
generosity of the Government and international community significant gap in the amount of funds actually spent on
in allocating sufficient funds to allow for an improvement in rebuilding houses. BRR reported at the end of 2007 that
conditions compared with before the tsunami. As a result, 100,000 houses had been finalized with a further 30,000
the reconstruction community is able to help the Acehnese units to go.
to build back a better Aceh and make solid improvements
to the region following a 30-year-long conflict. The allocations of funds towards different sectors vary,
sometimes significantly, across sectors as highlighted in
However, gaps still remain as highlighted in the sectors in Figure 6. This illustrates that the rebuilding of 130,000
red in Figure 4: the environment, energy, and flood control houses has subsumed the largest share of funds from all
and irrigation sectors are yet to receive enough funding to players. Figure 7 shows how housing reconstruction has
cover the estimated core minimum needs for reconstruction. dominated the attention of reconstruction players and
Figure 5 reveals the current variance between the core compares the progress of allocations with the key sectors
minimum needs and the amount of money disbursed to of health, education and transport — sectors that did not
sectors, with those sectors in red still lacking sufficient experience increases in allocations similar to those seen in
money disbursed to projects needed to return them to pre- the housing sector throughout 2007.
tsunami conditions.

Figure 4 : Sectoral gaps in allocations Figure 5 : Project financial progress

500
600 400

500 300

400 200
US$ millions

100
US$ millions

300
0
200
-100
100
-200
0
-300
-100

Flood control, irrigation works

Energy
Communications

Housing
Other Infrastructure
Health

Transport
Governance & Admin (incl. Land)

Community, culture and religion

Fisheries
Water & Sanitation
Enterprise

Education

Environment
Bank & Finance
Agriculture & Livestock
-400
Governance & Admin (incl. Land)

Energy

Environment
Bank & Finance
Health

Community, culture and religion

Water & Sanitation

Transport

Fisheries

Flood control, irrigation works

Housing
Education
Enterprise

Other Infrastructure

-200
Communications
Agriculture & Livestock

Figure 7 : Allocated funds by sector

Figure 6 : Allocated funds by sector
1,800
Housing 1,600
US$ millions

Transport
Health 1,400
Governance & Administration (incl. Land) 1,200
Community, culture and religion
Education 1,000
Enterprise
800
Water & Sanitation
Flood control, irrigation works 600
Fisheries
Agriculture & Livestock
400
Communications 200
Environment
Other Infrastructure -
Jun-05

Sep-05

Dec-05

Mar-06

Jun-06

Sep-06

Dec-06

Mar-07

Jun-07

Sep-07

Dec-07

Energy GOI Donors NGOs

Bank & Finance

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800

US$ millions
Housing Transport
Education Health

For further detail, please contact Jock McKeon: jmckeon@worldbank.org