Extracted from the ACFOA's submission
to the budget 2002 -2003: Reducing Poverty, Creating Human Security :
The Challenge for Australia's Overseas Development Assistance
5.2 I
ndonesia
5.2.1 Aid
ACFOA supports the maintenance of a strong
aid program to Indonesia, with the involvement of NGOs from both countries,
as part of the Australian Government's efforts to repair and strengthen
relations with Indonesia and increase links between our two countries.
The design of a new AusAID Indonesia Country Strategy for 2004/6 provides
an excellent opportunity to review the Australian Government's aid program
to Indonesia and respond to key issues, such as the ongoing economic crisis
and the persistent high levels of poverty, the need to protect human rights,
increasing conflict and the challenges arising from the decentralisation
process.
Indonesia will continue to need humanitarian
assistance to deal with natural disasters and human-made emergencies, especially
outbreaks of communal conflict and civil strife. A priority needs to be
strategies to deal with IDPs. The Indonesian Government has no clear policy
towards displaced people, preferring to leave the problem to under-resourced
district governments to deal with. AusAID should consider reallocating
a greater percentage of resources to increase Humanitarian Relief to Indonesia.
Australia's aid program to Indonesia
has traditionally concentrated on Eastern Indonesia (NTT, NTB, South and
Central Sulawesi and Papua). While there are clear historical reasons for
this, ACFOA believes that the 2004/6 Indonesia Country Strategy provides
the opportunity to revisit the geographical focus of the Australian aid
program, in consultation with the Indonesian Government.
As the debate on regional autonomy develops,
it will be even more essential to vary approaches in different areas. Particular
emphasis needs to be placed on Papua under the new Special Autonomy arrangement,
which will become effective in 2002. This law grants Papuans a large portion
of revenue: 80% from forestry and fishing and 70% from oil and gas, and
provides the provincial government with control over all aspects of Papuan
government (such as health and education), except for foreign affairs and
security.
The dramatic increase in regional revenue
is likely to result in Papua having one of the highest provincial incomes,
but with very poorly trained local officials and poor infrastructure for
health and education. The potential for problems resulting from this situation
is great. Increased support would not only assist in the development of
Papua, but also could also play a significant role in reducing long-running
tensions and conflict in the province.
Another key focus area should be the
province of NTT that has had to bear the largest burden of people displacement
problems resulting from the East Timor crisis. It is continuing to host
tens of thousands of East Timorese refugees until a resettlement or repatriation
solution is found. NTT is the poorest province in Indonesia and continues
to face a volatile political climate with the presence of militias from
East Timor and tense relations between Christian and Muslim communities.
ECHO, the European Community's main humanitarian
donor, has plans to soon pull out of Indonesia, and the potential strains
on funding from other donors as a result of the reconstruction needs of
Afghanistan, in addition to the huge development challenges facing Indonesia,
present a strong case for the Australian Government to increase real funding
to Indonesia. ACFOA therefore recommends an increase in funding to Indonesia
of $10m in 2002/3.
Finally ACFOA believes it is critical
that AusAID examine how the wider Australia-Indonesia relationship could
impact on the achievement of the strategic objectives of the aid program.
If theaid program is to have significant impact on poverty, it must give
consideration to influencing other aspects of Australian Government policy
that impact on development and poverty reduction in Indonesia, including
foreign affairs, immigration, defence, human rights and trade.
ACFOA believes that the Australian government's
present refugee policy of supporting the detention of asylum seekers in
the Pacific and taking a heavy-handed approach to Indonesia over asylum
seekers leaving their shores for Australia doesn't acknowledge the huge
strains and pressures presently placed on Indonesia as a result of over
1.25 million IDPs in their country.
In this respect, the meeting in February
2002 in Bali to discuss the issue of asylum seekers, co-hosted by Australia,
is a positive move. Reaching agreement on a collaborative approach to monitoring
and processing asylum seekers in an orderly and humane way gives a clear
signal that Australia wishes to tackle regional issues in a collaborative
and comprehensive manner.
A comprehensive approach to tackling
the issue, bearing in mind the aid program's mandate of reducing poverty,
would see Australia consider matters such as revision of the terms involved
in the Australian Fishing Zone, assistance at district level for developing
better policies to keep large-scale foreign fishers from Indonesian waters
and more appropriate methods of dealing with infringement of Australian-Indonesian
fishing agreements. Such initiatives, together with assistance for poor
fisherfolk, might discourage fisherfolks' involvement with people smuggling.
As is the case with the Pacific, ACFOA
would stress that initiatives aimed at assisting Indonesia to directly
tackle people smuggling are best dealt with outside the aid program and
should not detract from the program's stated anti-poverty focus.
Recommendation 10
ACFOA recommends that the Australian
Government:
10.1 Increase funding to Indonesia by
$10million in 2002/3.
10.2 Make an increased funding allocation
for Humanitarian Relief for Indonesia.
10.3 In the context of the 2004/6 Indonesia
Country Strategy, reconsider the geographical focus of Australia's aid
program to Indonesia, in consultation with the Indonesian Government. At
the very least, consideration should be given to supporting a small number
of high profile projects in areas of Western Indonesia that are predominantly
Muslim.
10.4 Place greater emphasis on Papua
as it develops Special Autonomy, and NTT to deal with the burden resulting
from the East Timor crisis.
The World Bank warned in a report in
November that high debt service payments limited the Indonesian Government's
ability to maintain essential spending on development and poverty reduction.
It said concerns about the sustainability of government debt weakened investor
confidence in Indonesia and made the country "highly vulnerable to
shocks and leaving little margin for error in economic management."
The Indonesian Government will meet with
the Paris Club of creditor nations in early 2002 to seek rescheduling of
US$2.7 billion in sovereign debt, both principle and interest. This is
the first time that Indonesia has requested rescheduling of interest. In
2001, the Paris Club granted Indonesia a rescheduling facility of some
US$5.8 billion, but only for debt principle.
ACFOA congratulates the Australian Government
on the efforts it is currently making to assist Indonesia manage its debt
burden, including the provision of funds under the aid program to assist
Indonesia with the task of managing domestic debt and the announcement
by the Foreign Minister in August of a study into the debt issue to be
carried out by AusAID in cooperation with the World Bank.
ACFOA would, however, encourage the Australian
Government to have a greater involvement in advocating for a resolution
to Indonesia's debt problem. ACFOA recognises that it is important that
any movement on the part of donors or multilateral financial institutions
on Indonesia's debt should be consistent with a more concerted effort by
the Indonesian government on fighting corruption.
Recommendation 11
ACFOA recommends that the Australian
Government to support:
11.1 A rescheduling of Indonesia's debt
at the upcoming Paris Club meeting, including a rescheduling on more favourable
terms than is currently the case.
11.2 The organisation of a broad international
consultation involving all stakeholders on the creditor's as well as the
debtor's side to bring about a fair and adequate assessment of the current
debt situation in Indonesia, and to agree on a lasting solution to relieve
the debt burden on Indonesia.
11.3 Arrangements with the Indonesian
Government to ensure that funds freed by debt cancellation are used for
poverty reduction programs.
Funding Implication
An increase for Indonesia in 2002/3 of
$10m.
5.3 Other
Geographic Priorities
5.3.1 East Timor
ACFOA commends the Government for its
peace building and development commitment to the people of East Timor.
ACFOA supports the maintenance of current levels of real funding to East
Timor given the crucial development challenges it faces as it moves toward
full independence
5.3.2 The Philippines, the Mekong, Burma,
China
ACFOA supports the maintenance of current
funding in real terms to the Philippines, the Mekong, Burma and China.
5.3.3 Middle East
ACFOA congratulates the Australian Government's
commitment to the Middle East Peace Process (MEPP) over recent years, including
additional funding commitments to the MEPP in 2000-2001, and in particular,
support for emergency medical assistance to the Palestinian communities.
In mid-2001, at the end of a $16 million three-year program, the AusAID
Programming Mission to the Middle East (July 2001) recommended that its
program of assistance to the Palestinians continue at that current level.
However, since 29 September 2000 conflict
has dramatically increased in Israel and the Occupied Palestinian Territories,
and hopes on both sides for a continuation or resumption of the peace process
have diminished. Approximately 1,000 adults and children have been killed
in the conflict and 26,000 people injured. The impacts of this conflict
on the labour market and on agricultural production in the Occupied Territories
have resulted in over two million Palestinians now living in poverty, with
limited access to health, education and social services.
Given current deteriorating circumstances,
ACFOA is concerned that the $4.5m over three years allocated to five Australian
NGOs for projects in the Middle East Capacity Building NGO Program is far
from adequate. ACFOA seeks a further allocation in 2002-2003 of $2m for
Australian NGO programs in the Occupied Palestinian Territories for programs
focused on poverty reduction, health, education, social services and support
for local peace initiatives. ACFOA also urges an additional commitment
for Australian NGO projects with the refugee communities in Lebanon, within
a designated humanitarian funding round of $1.5m per year.
ACFOA supports maintaining Australian
commitments of $3.8m per year to UNRWA, though UNRWA is less and less able
to meet the increasingly urgent basic needs of the 3.73 million registered
refugees in the Occupied Territories and neighboring countries.
5.3.4 Afghanistan
ACFOA commends the Australian Government
for the allocation of $17m in reconstruction assistance to Afghanistan,
announced at the international donors meeting in January 2002. This brings
total Australian assistance to South West Asia since September 2001 to
$40.3m. However much more needs to be done.
Just as it was a member of the international
coalition against terrorism, Australia should be a part of the humanitarian
coalition to rebuild Afghanistan not just from the recent conflict but
also from almost 22 years of continuous war. Donors, including the United
Nations, the World Bank and the Asian Development Bank estimate that rebuilding
Afghanistan will require approximately US$15 billion over the next 10 years.
The priority though until July 2002 will
be the maintenance of a large-scale humanitarian effort in support of 5-6
million Afghans assessed to be in acute emergency. In the longer term,
Afghanistan will need assistance with developing a functioning administration,
as well as with transport, food security, education and health. De-mining
efforts are also fundamental to restoring security and safety, particularly
for returning Internally Displaced Persons (IDPs) and refugees, and for
the delivery of aid.
In addition to humanitarian concerns,
the provision of generous assistance to Afghanistan will help to address
the source of the problem regarding illegal people flows to Australia,
a significant proportion of whom are from Afghanistan.
5.3.5 Africa and South Asia
Enormous poverty and development challenges
still face Africa and South Asia. However, given ACFOA is seeking specific
funding in basic social services and for Indonesia and the Middle East,
it is requested that for the 2002-03 budget, funding be maintained at real
levels. Further recommendations relating to Africa are contained in section
4.1.2 on HIV/AIDS.
Summary Of Recommendations For Other
Geographic Prioirites
Recommendation 12
That the 2002/3 Budget adopt the following
country-specific priorities for the distribution of Australian aid:
12.1 The maintenance of current real
levels of funding to East Timor and the maintenance of current real levels
of funding to the Philippines, Mekong, Burma and China.
12.2 An increase in aid to Indonesia
of $10 million to assist Indonesia in dealing with the ongoing impacts
of the regional economic crisis and to assist with further democratisation
and reform.
12.3 An increase in the Australian Government's
current commitment to the Middle-East of $5.3m per annum to a total of
$8.8m in the 2002/3 financial year. This includes a further allocation
of $2 million for NGO programs in the Occupied Palestinian Territories,
and an additional commitment of $1.5m for NGO projects focused on Palestinian
refugees in Lebanon in the areas of health care and promotion, and support
for specific disadvantaged communities.
12.4 Maintain real levels of funding
to Africa and South Asia.
Funding Implications
An increase in aid to Indonesia of $10m.
An increase in funds to the Middle East
of $3.5m.