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| January 10, 2005 |
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| World Bank Says It Could Raise Aid to Tsunami Region to $1.0 Billion |
WASHINGTON - January 10, 2005. The World Bank could raise its financial aid to tsunami-devastated regions
in Asia to one billion dollars if necessary, its president said Saturday,
reports Agence France Presse (01/08).
"When it comes to the question of reconstruction, what we have told the
governments is that we are going to be there for a long time. We ourselves
can go up to one billion dollars without any difficulty," James Wolfensohn told a media conference here. In the days immediately after tsunamis devastated Indian Ocean coastlines on December 26, the Bank announced it would commit an initial $250 million for emergency reconstruction.
Wolfensohn said the World Bank and other institutions such as the Asian
Development Bank would raise their commitments if the situation demanded
it. "All of us are ready to go extra mile for incremental funding," he
said. Wolfensohn, who toured some of the affected regions of the island
Saturday with United Nations Secretary General Kofi Annan, said the Bank
would help governments organize and mobilize funds but would watch how it
was being spent. "We are trying to get the countries not to move to
re-establish slums or shanty towns, but basically to improve the quality
of human life of those affected," the World Bank chief said. "I am not
wildly concerned about the availability of money, but I am wildly
concerned about how it is spent."
He said the Bank's approach would be based on humanitarian rather than
political factors, including in countries with histories of conflict such as Indonesia and Sri Lanka. "We are going to proceed on the assumption
that this is a humanitarian issue and not a Tamil or a Sinhalese. We will
have a color blind approach to relief," Wolfensohn said when asked about the Bank's relief initiatives in ethnically-divided Sri Lanka. Two weeks
after the tragedy, tensions are rising between the Sri Lankan government
and Tamil Tiger rebels over the issue of aid distribution.
Wolfensohn said the Bank would strictly monitor funds allotted to affected countries and use local community networks to distribute money. "We have to give the localities an opportunity to consult and manage their future. I can give dozens of examples of failed centralized actions and many examples of extraordinary local participation. "In Aceh (Indonesia), 75 percent of people affected are part of community developing programs and they are making the decisions." Wolfensohn also said that global institutions were looking for various options to offer quick monetary aid to the victims. "We are looking for a possibility to offer cash grants to the affected families so that they have something in their pockets," he said. "This is not just a physical disaster but a human disaster."
Reuters (01/08), The Associated Press (01/09), Neue Zuercher Zeitung
(Switzerland, 01/09), and Frankfurter Allgemeine Zeitung (Germany, 01/10)
further note Wolfensohn said that World Bank assistance to the tsunami-hit nations could increase to $1.5 billion. The World Bank President noted
that the World Bank was also considering debt relief, and would address the issue soon. Sri Lanka itself has over $600 million worth of debt principal payments and debt interest due this year, he added.
The Voice of America notes World Bank officials said Saturday that the
worst-hit parts of Sri Lanka are poor areas, or those that have that have
been most affected by the country's two decade long conflict between the
government and rebels from the Tamil Tiger guerrilla group. Wolfensohn
said the disaster may put some of those differences between the two sides
into perspective. "It does represent an amazing opportunity to use this
moment, when all of us are really seen as 'ants on a planet' - when you
look at the power of this tsunami, it's hard to think in terms of
parochial issues," he said. "Because regardless of who we are or where we
were, nature made us recognize that fundamentally we're all the same."
Xinhua (01/09) also adds Wolfensohn told reporters in Colombo that the
"the World Bank will support the Government as it develops a fast,
transparent and effective way to convert the billions of dollars pledged
all over the world into the rupee in the hands of the poor fisherman in
Sri Lanka to repair his boat or for a community to rebuild its homes." The
bank has reserved about $100 million for post- Tsunami rebuilding in Sri
Lanka from existing projects. In addition, an emergency credit of not less than $75 million will be made to enable the government to begin recovery
work.
Dow Jones (01/07) meanwhile notes Wolfensohn said Indonesia's government
should prioritize the recovery of agricultural production in the
northwestern province of Aceh, which was devastated by the massive Dec. 26
earthquake and tsunami. "The government must talk to farmers and
fishermen, because they know better what they need and how much money they
want," Wolfensohn said. "Then we have to create a mechanism to support
them." Around 26 percent or 100,000 hectares out of 381,610 hectares of
Aceh's rice paddy fields were damaged by the tsunami. Agriculture output,
chiefly food crops, accounts for 28 percent of Aceh's annual gross
domestic product. Wolfensohn said the World Bank is preparing to expand
its Kecamatan rural poverty alleviation project in Indonesia for farmers and fishermen affected by the tsunami. Under the project, the World Bank provides loans to finance development and economic activity in rural villages.
Bisnis Indonesia (01/08) adds that the World Bank is going to provide a
$301 million loan for the reconstruction and rehabilitation of Nanggroe Aceh Darussalam (NAD) and North Sumatra. The press release of the
Department of Finance informed that Indonesia and the World Bank had
signed a foreign loan Memorandum of Understanding worth $301 million for
regions hit by the tsunami. The World Bank loan will be used to rebuild
houses, improve health care services, provide education, improve road
access and other infrastructures, and recover economic and social assets.
Agence France Presse (01/09) writes in a separate piece that the World
Bank President, who also visited the Maldives, said the island nation had
suffered enormous emotional. "People had fears about global warming and a
rise of the sea level. And with this [catastrophe], the fear is that if it
can happen once, it can happen again," Wolfensohn said.
Reuters (01/08) meanwhile reports that the World Bank's private sector
financing arm said on Friday it could double or triple its investment in
businesses in Indonesia and Thailand to help with reconstruction after the
tsunami. In an interview, Amitava Banerjee, the International Financial
Corp.'s manager for East Asia and Pacific, said IFC financing, through
loans and equity, could rise to about $600 million a year in Indonesia and
$200 million in Thailand. On Friday, the IFC pledged $2.5 million in
grants to match the costs of local companies helping with tsunami clean up
at their own expense. The challenge for businesses, Banerjee added, was to
find credible means to show tourists that mechanisms are in place to deal
with tsunami, including an early warning system. Neil Gregory, the IFC
manager for South Asia, meanwhile said in Sri Lanka and the Maldives the
IFC wants to ensure businesses also benefit from the reconstruction money
pouring into the region. He said the IFC would like to see governments
contract out a lot of the reconstruction work to local companies. Gregory said small and micro businesses were the hardest hit by the tsunami and the IFC wanted to help them. In the Maldives, he said the biggest damage was to holiday resorts and tour operators.
Finally, in an interview with the Australian Broadcasting Corporation,
Wolfensohn noted on Friday that "the world is not just the tsunamis. You
have poverty, you have Africa, you have the environment, you have women,
you have conflict, you have drugs, you have crime. I can give you dozens
of problems which are inadequately dealt with, and perhaps the most
inadequate is Africa. I think that's why Tony Blair has got both Africa
and global warming on the agenda for the G8 meetings in the middle of the
year. So I think our attention is directed at the moment to the tsunamis,
and correctly so, but we should never lose sight of the fact that it is
not the only issue. It's an important visible issue today, but less
visible but even more important is the question of poverty and the
question of what goes with it.
Source: The World Bank |
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