Cultures of Care and Contempt

By Bill Nicol

Leaders must stand apart from the crowd in thinking for themselves. This is never easy. Rumours, assumptions and narrow narratives often cloud clear, independent thinking. “Cultures of Care and Contempt” reveals such failings as it probes the giant global contributions to the emergency response, recovery and reconstruction of Indonesia’s westernmost province, Aceh, after the 2004 tsunami. The fourth in the epic six-volume series “Tsunami Chronicles”, this book looks at the global contribution as people came from around the world to help. Some brought big money, others big politics. Some came with open minds, others rigid ideologies and inflexible interests. This is the story of what happens when leadership turns from care to contempt, surrendering to bureaucratic inertia and ethical failure. It swings through the impressive contributions of leading international NGOs like CARE and Oxfam, internal conflicts that gripped the Red Cross, frictions that beset the UN, ethical challenges that undermined the World Bank, the power politics of the European Commission, misfires by the United States and the weakened position of nations like the UK and Canada when outvoted in multilateral funds to which they give money. The story is a wakeup call to global leaders and international managers involved in disaster risk management and international development, especially as global warming and climate change threaten more and ever greater natural disasters.

• Language: English
• Publisher: BookBaby
• Release date: Jul 17, 2013
• ISBN: 9781483503059

Book preview

contributions.

Chapter 1:

A TSUNAMI OF MONEY

MONEY IS THE LIFEBLOOD OF AN EMERGENCY RECOVERY PROGRAM like the post-tsunami operations in Aceh. You can do little without it and we had plenty. Indeed, we were awash with it. This was a blessing and a curse. Just how much is the subject of this chapter. Exploring it will take us into the contributions and performance of international NGOs and the Red Cross movement. Before we come to them and the perspectives of some key non-government program leaders, I’d like to look at the money itself and what it was spent on.

Counting the money available for an emergency recovery program is essential. So is spending it in the right places. Neither is easy. Imbalances are inevitable. The more the money, the greater they are.

To appreciate the imbalances, it is useful to look at the official figures. Of 3,415 schools destroyed, 1,759 were rebuilt—a shortfall of 1,656, just under half the requirement. But of 517 health facilities destroyed, 1,115 were constructed—an excess of 598, more than double the requirements; and of 1,089 religious facilities destroyed, 3,781 were built or repaired—an excess of 2,692 or almost 250% over the requirement.

Looking at these figures, it takes little to realize which projects were the sexiest for donors or the most politically driven for Indonesia. This should not distract from the overall success of the recovery program but it is telling nonetheless.

Even working on the inside, I could never really tell how much money was available at any time as demand pressures and supply constraints pushed construction costs to the sky. Like every other figure involved, including the number of people killed in the tsunami, much of what we did was based on a range of floating guesstimates and approximates. So the figures I’m going to give here, while reasonable, are also rather rubbery when you add everything together. That is the nature of disaster recovery, particularly when it involves hundreds of different organizations running thousands of projects involving millions of transactions and billions of dollars. Near enough was all you could ever hope for.

What matters is that ours was a well-funded program. Starting with around US$6.4 billion, we were awash with cash, the single greatest enabler of recovery. For this, both Indonesia and the international community deserve credit. The Indonesian Government kicked in US$2.4 billion (37%) of the total funds, making it the single largest funding source; international donors put in US$2.3 billion (36%) through bilateral and multilateral programs; and the non-government sector gave US$1.7 billion (27%) mainly through public donations to the Red Cross/Crescent movement and international NGOs. This made the Aceh program a true international partnership with each major group funding around a third of the reconstruction. More money would come in over time from programs in Sri Lanka and the Maldives where some NGOs became so fed up with corruption, even among their own people, that they shifted unspent money to our own program, a testament to how clean and effective it was in comparison.

Despite some claims that the international community funded the whole program, including Indonesia’s contribution through Paris Club debt-deferrals, the World Bank estimates the value of the deferrals at no more than US$400 million, not small change but not large either by the scale of requirements. At the least, it meant that Indonesian taxpayers still contributed over US$2 billion to rebuild Aceh and Nias.

On the international side, the three biggest funding channels were the Multi Donor Fund (MDF), Red Cross movement and United Nations. The MDF began with what we thought was the largest single source of funds, an amount of US$500 million. This would grow to around $700 million over the course of the program with additional donations from various countries like the United Kingdom that kicked in an extra $60 million midway through with little fanfare. The Red Cross movement initially came in second with a combined US$500 million, but grew over the course of the program to around US$1.2 billion. The 27 UN agencies, funds and programs involved weighed in collectively with another US$1.1 billion collected from donor governments.

Totaling the money was never easy. Rarely did the figures add up with any reliability. This, in part, was a problem of definition. Some money was allocated as humanitarian aid for the emergency period immediately after the tsunami. Some was for rehabilitation when areas were being cleared of debris. Some was for reconstruction proper. The three classifications were never so easily separated in practice. Each overlapped with and bled into the others.

Totaling the money was also a problem of counting the same money more than once. This is terribly easy in the hothouse of a disaster. If the European Community gives money to the MDF, and the MDF funds a charity like Muslim Aid and Muslim Aid spends the money on a drainage project, the original grant risks being counted three or even four times. The RANd database, when it worked, could only tell us what was spent on individual projects, not where the money came from or how many times it had been counted. The only way to get an accurate picture was to conduct the assessment using trained professionals. The World Bank did just this under the guidance of Wolfgang Fengler who tasked his team to track the flow of money by visiting every delivery partner one by one to work through its accounts.

The resulting information gave us the most accurate understanding of how much we had for our program, where it was being spent and on what. Mr Fengler laid out the findings in an elegant one-page chart showing geographic and sectoral distributions. The analysis showed the provincial capital, Banda Aceh, and its surrounding region, Aceh Besar, to be over funded—not surprising as it was easily accessible, most delivery partners were based there and showpiece projects were quickly finished there to impress visitors. On the flip side, remote areas like Nias and Simeulue were underfunded—again unsurprisingly since they lacked the attractive attributes of the capital and its region. The information led to significant program adjustments that helped rebalance resource allocations and contain things like the over supply of community health centres that were popping up like mushrooms despite serious question marks over their sustainability once donors departed.

The United Nations did a similar accounting of its own tsunami spending in Indonesia. Eric Morris, the first UN Recovery Coordinator for Aceh and Nias, subsequently submitted what I understand to have been the UN’s first financial accountability report to a host government. As Mr Fengler demonstrated, preparing the report required human hands because UN IT systems did not speak to each other. I had some insights into this because my eldest son, Daniel, then a UN volunteer in Jakarta, designed the financial tracking system.

Blessed with some fine interpersonal skills, Daniel established a dialogue with each of the UN agencies in Jakarta. The often-impervious walls dividing them dissolved when he did. He gathered the information each agency gave him into a complex set of Excel spreadsheets. The resulting accountability reports were impressive. They gave Dr Morris and Dr Kuntoro the first real understanding of what the UN as a whole was actually spending its money on in Aceh and Nias.

Keeping a tight control on money is vital in disaster recovery, as elsewhere. I don’t mean just counting and allocating it. More fundamentally, I mean getting hold of what is pledged. There can be a huge gap between this and what is actually given. The conversion rate for India’s 2001 Gujarat earthquake was 20%. For similar earthquakes in Iran and Pakistan it was 5% to 15%. Dr Kuntoro was particularly sensitive to the problem. We have to keep the money warm, he said early on. We must keep it here. And we did. Our conversion of pledge into spend was over 90% reflecting both donor generosity as well as donor confidence in Dr Kuntoro.

While the original estimate of damage in Aceh was $4.9 billion, when we got down to detailed planning the actual cost jumped to be around $7.1 billion—a figure that rose further to $8.5 billion if we were to build back better as the UN Special Envoy for Tsunami Recovery, President Bill Clinton, called us to do in a moment of profligate optimism. Thankfully, when all the pledges were totaled, they came to $7.2 billion, a big number that at least covered the baseline costs until the conversion rate dropped it to somewhere between US$6.4 billion and $6.7 billion in actual money received. However you measure it and whatever the real total, the result was still