Australia's bilateral aid boost for Indonesia

Australia's Prime Minister, John Howard, was applauded by the Jakarta Summit on tsunami-hit countries of the Indian Ocean for his country's US$ 764 million plan for a joint reconstruction and development commission with Indonesia, a contribution that put Australia at the top of the list of international donors.

The package, widely supported by the major Australian political parties and non-government organisations, includes grants and concessional loans over five years and disbursements will not be limited to the devastated areas of Aceh and North Sumatra provinces.

A$500 million is set aside for grants for small infrastructure reconstruction projects in affected areas. It includes a large scholarship program to provide support and training in engineering, healthcare, public administration and governance.

The concessional financing part of the package will be spent on rebuilding major infrastructure, providing A$500 million interest-free for up to 40 years with no repayment of principal for 10 years.

Neighbourly Support

"No natural disaster in my lifetime has moved and touched the people of my country as much as the disaster that has brought all of us together," Mr Howard said. "There's an old saying in the English language, isn't there, that charity begins at home. Our home is this region," he said. "And we are saying to the people of our nearest neighbour that we are here to help you in your hour of need."

"We are a country of 20 million people and we are a wealthy country by world standards. This is an enormously big contribution and I'm very proud that we're able to do it."

No United Nations

Unlike other donor countries, Australia's package for Indonesia will be jointly administered by the two countries without UN involvement. "The only way that we can deliver this aid effectively is (bilaterally) and we are not going to deliver it through an international agency," Mr Howard said.

Australian and Indonesian Officials

Australian federal officials will be seconded to a joint commission with Indonesia charged with spending the package "It is focused on economic reconstruction and development," Mr Howard said. "The program will be administered by a joint commission which will be overseen by President Yudhoyono and myself."

Mr Howard said the foreign and economic ministers of both nations would be responsible for ensuring the "program proceeds smoothly". "There will be a joint secretariat which will comprise people from both countries. It will in every respect be a partnership between Australia and Indonesia."


"I think that it is very important in the wake of all the aid that is flowing into this country to remember that we are guests in Indonesia, that we are here to help the Government and the people of Indonesia," Mr Howard said. "The ultimate responsibility for co-ordinating the provision of that aid naturally rests with the Government of Indonesia."

Leaders Embrace

Usually unreliable press rumours in Jakarta that John Howard would embrace President Yudhoyono at the first photo opportunity actually came true, although both leaders appeared to consciously resist a public, full bear hug.

"'You were the first to phone. You were the first to have aircraft on the ground,' an emotional Susilo Bambang Yudhoyono told John Howard at the start of their meeting at the presidential palace in Jakarta. 'That is a gesture I will never forget,'" it was reported.

"The warmth of the two leaders' rapport early yesterday could be seen in their lingering opening embrace as the Prime Minister told Indonesia's leader of Australia's sorrow at the catastrophe befalling Aceh," it was reported.

Edited extracts from PM's $1bn for Indonesia and Leaders embrace a friendship forged in tragedy (Patrick Walters, The Australian), Rescue package (Ian McPhedran, Herald Sun, Melbourne) and Aussies to help run $1bn aid plan (Patricia Karvelas, The Australian).