International donors established a multi donor trust fund to manage the US$500 million in aid grants, as the reconstruction programs in tsunami-stricken Aceh Province and North Sumatra Province are soon to commence, the Jakarta Post daily said Tuesday.

Indonesian Finance Yusuf Anwar hoped the pooling mechanism would help the government coordinate the proliferation of aid offers through the single door of the state budget. The trust fund is expected to increase transparency, accountability and efficiency amid a lack of confidence among international donors, it added.

Many donors, fearing that corrupt officials may skim off their aid money, have decided to channel their money on their own, which has in turn made monitoring difficult.

"We can develop and implement a comprehensive multi-year plan for the reconstruction through the budget and we can monitor, track and evaluate the flow of funds," Anwar said.

The trust fund memorandum of understanding (MOU) was signed by the Ministry of Finance and the National Development Planning Agency (Bappenas) on behalf of the Indonesian government, the World Bank as the fund's trustee, the ADB, and Denmark, the Netherlands, Norway and Sweden.

The European Commission (EC), the United Kingdom and New Zealand may contribute to the trust fund in the near future. A total of 20 donors are expected to participate in the trust fund, with the EC contributing 200 million euro (some US$260 million), the Netherlands US$100 million and others between US$10 and US$50 million each.

World Bank country director Andrew Steer said the trust fund would also strengthen partnership between donors interested "in getting the job done," by bringing resources to rebuild Aceh Province as quickly and as effectively as possible.

A steering committee, comprising representatives of government, donors and Aceh civil society, will manage the trust fund by financing reconstruction projects to be carried out by the Aceh Authority Agency (BOA), it added.

The Indonesian government has estimated that reconstruction will cost up to some US$4.8 billion. Indonesian President Susilo Bambang Yudhoyono said the government's efforts in coping with the disaster, including the setting up of the National Disaster Management Coordinating Agency, formulating the reconstruction blueprint and establishing the BOA, were insufficient to address the issue of corruption.

International Organization of State Audit Institutions (Intosai)deputy chairperson, Gertrude Schlicker, outlined the necessity of identifying aid allocations, audit procedures, high risk areas of corruption, and gaps in audit coverage.
 
(Xinhua News Agency April 26, 2005)