Until 2004, the activities of the Italian Government focused on the support to the private sector. The cooperation continued during 2005, and was augmented by a series of aid initiatives undertaken by Italy to help in the reconstruction of Aceh after the tsunami of December 26. 

 Support for Small and Medium Enterprises: The main project in this area is a 5.5 million Euro fund to support the local footwear sector.  A ‘Service Center’ has been opened close to the city of Surabaya, after the signing of a MOU in January 2003. In 2005, activities were focused on finalizing the contract with the consortium that won the Government tender process, and signing the financial convention which would allow the disbursement of the loan.   

 Post-tsunami Reconstruction: Immediately after the tsunami of 26 December, Italy organized its response through the following actions: 

 1. Financial Sector. At the end of December 2004 there were expedited negotiations for the conversion of debt resulting from soft loans (the negotiations had been ongoing since early 2004). In agreement with the Indonesian Authorities, a decision was made to concentrate these resources (about 25 Million Euro) in the areas affected by the tsunami. The MOU (Memorandum of Understanding) was signed in Jakarta on March 9, 2005 by the Indonesian Foreign Affairs Minister, H.E. Hassan Wirajuda and by the Italian Minister of State for Foreign Affairs, the Hon. Margherita Boniver. The agreement has been in place since October 2005, and there will be joint approval on projects to be implemented. An initial meeting of the Bilateral Committee in mid-February in Jakarta approved four infrastructure projects in the area of Banda Aceh (valued approximately 5 Million Euro). 

Italy also promoted the proposal for a moratorium on debt repayment resulting from commercial loans granted in the past to Indonesia and restructured by the “Paris Club”. The Moratorium, accepted by Indonesia, has been in effect since mid 2005.
 
 2. Multi-bilateral Contributions. In response to the “Flash Appeal” launched in Jakarta on January 7, 16 million Euros were committed to the entire region, of which a part was reserved for Indonesia. A number of United Nations agencies received funds for specific projects, such as that managed and completed by the IOM for the construction of ten satellite clinics in refugee camps in Bireuen district, and one still in progress with the WHO in the psycho-social field involving some Italian NGOs. 

 3. Bilateral Contributions. An amount of 10,150,000 Euros was allocated to undertake bilateral activities through the Italian Cooperation in Jakarta, Banda Aceh and Bireuen. These activities were formulated by teams of Italian experts in collaboration with local institutions both in Aceh Province and in Jakarta in the following sectors: a) Health, b) Education and aid to vulnerable populations, c) Agriculture, d) Fisheries e) Housing. These initiatives have been in progress since May 2005, with funds managed by the Italian Embassy under the Emergency heading.
 
A summary of activities in progress:

 1) Support to the Service Centre for Small and Medium Business Enterprises for the footwear sector in Sidoarjo (East Java)
 
Sector: Development of Small and Medium Enterprises
Type of initiative: Non-emergency
Channel: Bilateral
Management: Assigned to other institutions
Total amount: 5.5, million euros
Distributed amount: 0
Type: Soft loan

With this program, the Italian Cooperation hopes to support the whole footwear sector in East Java, promoting employment and improvement of productivity of a wide network of small and medium enterprises in the area. 

  2) Building and equipping 10 satellite clinics in Bireuen District (Aceh)
Sector: Health
Type of initiative: emergency
Channel: Assigned to IOM (International Organization for Migration)
Total amount: Euro 500,000
Distributed amount: Euro 500,000
Type: grant

With this initiative, the Italian Cooperation responded to the emergency health needs of displaced peoples. They worked together with other projects undertaken through the same channel to ensure wide and complementary coverage.  The operation lasted five months, and ten fully equipped clinics were delivered in September, thus assuring Italy’s position at the forefront of the Donors.  


 3) Psycho-social support to populations stricken by the tsunami in the Province of Aceh.

Sector: Health
Type of initiative: Emergency
Channel: Multi-bilateral
Management: Assigned to WHO (World Health Organization)
Total amount: Euro 500,000
Distributed amount: Euro 500,000
Type: grant
 
This initiative started in April 2005, and is structured in two components: the first consists of professional training of medical and auxiliary medical personnel in the fields of prevention, diagnosis and treatment of post traumatic pathologies. The second organized by the WHO in collaboration with the Italian NGO Terre des Hommes, focused on the creation of social-environmental conditions to treat patients who underwent traumas in the territory. This initiative is still in progress.  

4) Emergency Bilateral program for the Province of Aceh. Sector: Health, Education and Aid to vulnerable populations, Agriculture, Fisheries, Housing Reconstruction.

Type of initiative: Emergency 
Channel: Bilateral
Management: Direct, with involvement of Italian NGOs
Total amount: Euro 10,500,000
Distributed amount: Euro 10,500,000
Type: grant  

The Italian Cooperation’s first evaluation mission in Aceh took place in early January 2005. After meetings with the Indonesian Authorities and successive evaluation missions, an “aid package” (Emergency Program for the Province of Aceh) and a series of multi-sector programs, amounting to more than 10 million Euro, were formulated. The Italian Cooperation offices were established in Jakarta, Banda Aceh and Bireuen, with ad hoc personnel. The program, undertaken in the districts of Aceh Bear, Pixie and Bireuen, follows an integrated approach, working in close contact with the district heads of the three areas and focuses on the rehabilitation of schools, health centers and houses with particular attention to the economic recovery of the affected areas. The local communities take an active role in the initiatives in conjunction with the projects which Italy has started on the multi-lateral channel. At the same time, the Italian NGOs which have been present in the Province since the aftermath of the disaster (Alisei, AIFO, GVC, Terre des Hommes-Italia), were directly involved in the implementation of these programs. The program in Aceh, which received a visit by Minister of State Margherita Boniver in December 2005, is at the final stage of completion.    

 

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