Types of Aid that Indonesia Received after the Tsunami - Essay Example

After reading this essay you will be able to answer the following questions. How much help did the various types of aid provide for Indonesia after the Tsunami? Did the Tsunami cause major problems for Indonesia or help it to reach sustainable development. We will be focusing on the different types of aid that Indonesia received after the tsunami, such as bilateral or voluntary aid. These kinds of aid, particularly bilateral aid, were important and beneficial to Indonesia in the short run, directly after the catastrophe, but on the other hand, those kinds of aid can also hinder a country from reaching sustainable development in the long run. This is mainly because countries who give bilateral aid want to get something in return for their help in the long-run. Additionally, in order to give the reader a clearer and better understanding of the various types of aid Indonesia has received from countries and organisations such as Germany or the World Bank. Included are Case Studies such as a Case Study from a chemical firm called BASF. The allocation of funds in each sector can be clearly identified through a table. It can record the data of how much each country donated; the cooperativeness between countries can clearly be deduced. While causing great damage to the country and its infrastructure, it can be argued, from an economic point of view, of course, that the tsunami also had some positive effects on the development of Indonesia because through the various types of aid whether it is financial aid or aid donated for their education. Indonesia has a better perspective of becoming sustainably developed now that the catastrophe occurred. Being that the aid could be put to good use for making the environment a better place to live. Later in the essay there will be highlights on the economic point of view. Table of Contents 1. Introduction 2. Identification and listing of various types of aid 3. Case Studies of countries and Organisations that donated money and their long-run thoughts 4. Discussion and analysis of factors that still hinder Indonesia from sustainable development 5. Conclusion Table of Figures Figure 1-Amounts of Money countries donated to Indonesia---page 6/7 Figure 2-Disbursements vary across Sectors---page 12 Figure 3-Table displaying GDP- real growth rate—13 Figure 4-Picture of Indonesia after Tsunami—page 16 Figure 5- Picture of Indonesia after reconstruction in 2009—page 16 Figure 5- Picture of Tsunami Warning System—page 17 John Q. Student Professor D English 344 23 October 2009 Extended Essay: Geography Introduction Have the various types of aid helped Indonesia recover after the tsunami and did the Tsunami cause major problems for Indonesia or help it to reach sustainable development? This extended essay deals with the Tsunami that happened in December 24, 2004 and affected the whole South Asian Region with destruction and misery. The essay focuses on Indonesia’s recovery from this natural disaster. After reading the essay, these questions can be answered: Have the various types of aid helped Indonesia recover after the tsunami and did the Tsunami cause major problems for Indonesia or help it to reach sustainable development? In this context, primarily the ‘industrial countries’ would be the main focus. The tsunami catastrophe happened on December 26, 2004, and can be regarded as one of the most devastating and deadliest natural events in world history. The recorded casualties were estimated up to 230,000 people, over 100,000 were injured and about 2,000,000 lost their homes. It wiped out the entire coastal areas across South-eastern Asia. The countries which were mostly affected were Indonesia, Thailand, Myanmar, and India. This is a short description of how a tsunami is caused. A tsunami is caused by stress between the tectonic plates. This stress occurs when one tectonic plate moves under the other. The results of this movement are earthquakes, volcanic eruptions, and in this case, massive tsunami waves. The Southern Asian region is one of the most active regions tsunami regions in the world. As evident from the chart below, there are several tectonic plates which touch one another in this area. The main goals of this essay are as follows: Naming the major funding countries and the connected obligations behind their funds. Discussing the work and productiveness of organizations such as the U.N special envoy for tsunami recovery. Discussing and analyzing the issues that in spite of all the aid still hinder Indonesia from becoming more sustainably developed. Overseas aid and development “…is the transfer of resources at non-commercial rates by one country (the donor), or an organisation, to another country (the recipient).The resource may be in the form of: 1. Money, as grant or loans, which has to be repaid even at low interest rates. 2. Goods, food, machinery and technology. 3. Know-how and people such as teachers, nurses or engineers.” (Geography an Integrated Approach, p.64) Basically the reason to give aid to other countries is to help them improve their economic situation and the standard of living of the people. Types of aid: Two different types of aids that are provided are official and voluntary aid. Official aid is the money that is paid by tax payers in the following donating countries and administered by governments in those countries. Voluntary aid is the money that is raised by independent organisations and private donors. The fraction of BIP is the amount of binding protein. Country/Institution Amounts of Money donated in Millions Official Voluntary Total Fraction in BIP Germany 500 502,5 1002,5 0,04% IWF 735 - 735 Australia 600 45 645 EU-Comission 500 - 500 Canada 324,08 (425 USD) 93,61 (123 USD) 447 0,05% USA 260 (350 USD) 152,30 (200 USD) 412 Japan 370 No Data 370 Netherlads 230 115 345 United Kingdom 73,06 (96 USD) 143,84 (189 USD) 216 World Bank 190,26 (250 USD) - 190 Italy 112 (146 USD) 69,05 181 Norway 135 41 175 0,085% Switzerland 17,3 143 (224 CHF) 160 Asian Development Bank 133,18 (175 USD) - 133 Sweden 59 40 99 France 49 45 94 United Arabian Emirates 30 62,36 92 Kuwait 76,05 (100 USD) No data 76 Austria 8,8 (aboriginal promised 50)[19] 20 28,8 And other countries Total ~4,8 Billion >> 1,5 Billion 6,3 Billion Fig.1, table For now, the essay will focus on Germany and analyze the different types of aid this country provided to Indonesia: Germany donated a huge amount of money to the countries affected by the tsunami, particularly to Indonesia due to the fact that it suffered most destruction and casualties. Germany did not only contribute financial aid to the struck regions, but they also sent experts from the police and medical institutions in order to help with the identification of the victims. Apart from that, Germany decided that the so called “THW” (Technisches Hilfswerk) should go to the regions of crisis. The THW along with the Major Economically Developed Country (MEDC) technology services, assisted in cleaning up water resources so that it would be drinkable again. This is a good example of overseas aid and commitment because it shows that it is not enough to donate money but to also send the know-how and experts that help and organize the recovery process. This is especially important in so-called developing countries because these states often do not know how to deal properly with such overwhelming situations. The total amount of money that was donated for the tsunami region was 7 billion dollars. The contribution of Germany was a total of over 630 million dollars. The amount that was given helped Indonesia in numerous of ways. The reason why Germany managed to raise such a great amount of donations is owing to the fact that many firms started internal charity programs. The company BASF is a good example for demonstrating how the internal charity programs of companies work. The fund raising project of ‘BASF- The Chemical Company’ managed to raise 3.8 million Euros for the tsunami victims in the region of Southeast Asia. So far, the funds of the German chemical plant are used in several projects: e.g., the construction of an orphanage in Nias, in which a scholarship program is included. The funds are also invested for the construction of a training hotel and residential accommodation in a vocational training complex in Mibo, Bandah Aceh. Indonesian tsunami and Aids The Indonesian tsunami also prompted the German airline company Lufthansa to spring into action. They have provided a substantial amount of aid to tsunami affected countries, especially Indonesia. The company spent a commendable 2 million Euros during the first week of the disaster. The second phase of Lufthansa’s aid continued with a sustained support for the reconstruction and support of the tsunami affected Indonesian people. Furthermore, Lufthansa’s Help Alliance was opened for the sole purpose of accepting donations formal across the world for the tsunami victims. During the first four days of the tsunami, almost 3000 German passengers were flown back, and four additional flights were initiated to assist the tourists in returning back to their homeland. What’s more, Lufthansa airlines carried sixty tones of relief goods as well as several humanitarian aid staff to the devastated regions of Indonesia free of cost. A long term initiative called’ A Future for the Children’ was launched jointly by Lufthansa and Help Alliance, which focussed primarily on helping the affected children and the young. Besides Indonesia, the initiative also served tsunami affected countries such as India, Sri Lanka and Thailand. Almost every department of Lufthansa were actively involved in the reconstruction work. For instance, Lufthansa Cargo was involved with projects in India, Thomas Cook was involve with the relief work in Thailand while the Sri Lankan victims were helped by Lufthansa Technik. There are different types of aids. The ones displayed in the table are official and voluntary. Official aid is the aid that a region of crisis receives from governments and organisations such as the World Bank. When official aid is given to a country that requires it, the aiding country wants at least half the amount they aided to the receiving country, as soon as this country has recovered again. Germany was the first bilateral donor in the reconstruction of Indonesia. With the consent of a tranche of 59 million Euros for the reconstruction process in the Tsunami hit region Sumatra and the annunciation to support ‘A Multi Donor Trust Fund’, the German Federal Government was the first bilateral donor for concrete reconstruction projects. In this reconstruction project, Germany is controlling the sectors concerned with healthcare, education and housing. A case study was given by Paul Thorton-Verulam Associates (2006) shows that the Multi Donor Trust fund had included 15 donors. Germany was the first real bilateral donor, which means they were the first donors that has signed an agreement with the country receiving the aid. A reason might be that Indonesia suffered from great devastation at that point and so Germany could have made Indonesia sign a contract under conditions that Indonesia would not have signed if a bilateral donor was existing. It is in the interest of both, the receiving country and the donating country, to sign a bilateral agreement as soon as possible, since in the end, both countries would have profited from this agreement. Indonesia would stand to gain because Germany was giving them aid in a situation where they required it and Germany would profit in the long- run, because it received goods or services in return for giving aid. Indonesia may have a hard time paying the funds back. In fact, Indonesia would more than likely go into poverty while trying to pay off its debt. Voluntary aid can be distinguished from official aid in the way that this type of aid is donated by private people or companies and not by governments or organizations such as the World Bank. This is also the reason why, when analyzing Fig.1, no voluntary donations in the sections such as in the one of the World Bank is present. Examining the Aids The reason why there is such a large difference when comparing the official donations with those made voluntarily is because a government or a World Bank has more capital to donate than a company or private household. The donations given voluntarily is just to help out, while the other donors are loaning the money to help Indonesia recover. Afterwards, the money will have to be paid back. Another important factor why official and voluntary donations differ so much is because of the fact that while governments or the World Bank get a return for their aid in the long-run, for example taxes or agricultural goods and services, voluntary donators get nothing in return. People generally donate because they feel sorry for what has happened to the people in the region and want to help. Of course there are some exceptions such as the large donation of sports star Michael Schumacher, but such grateful funds are generally common in voluntary donations. When investigating the data shown in the Fig.1, a clear dominance of the World Bank can be detected. An analysis made on the donations of the World Bank will identify the sectors which were benefitted the most by the donation. The following pages will discuss whether or not the donations of countries and organisations such as the World Bank only have positive effects, or if they are also are associated with negative ballasts for countries like Indonesia. Fig. 2 Bar graph, (World Bank Data 2007) When examining the data regarding the allocation of funds by a sector in Fig 2, it can be detected that the more important a sector is for accomplishing sustainable development, the more funds are allocated to the sector. Peter Mc Crawley (2008) noted that whenever a particular sector experiences a marked boom, the demand for inputs used in the sector tends to increase. Then, the increased demand tends to cause negative impacts. This sounds logical since a country can be referred to as a sustainably developed country. In sustainable development, a group of important natural resources are used by humans for their development in a way, which doesn’t deplete or pollute the natural resources in the long run. Thus, sustainable development means helps in sustaining of growth such as economic growth and food sources over time. GOI is an organization that provides employment for those without jobs. Proper housing conditions, a good healthcare system and a well-connected infrastructure must exist. Education is more important to achieving sustainable development than Energy. If we used ways to save energy, we can save lots of money. Education provides the following: Improvement of basic education, develops public awareness and understanding, and provides training for all sectors of private and civil societies. It’s almost 5 years since the disaster hit Indonesia, and a number of relief projects have been discontinued. Fig 3 helps in the better understanding of the economic changes in the years following the tsunami. The Gross Domestic Product of a country measures the country’s total economic output for a given year and by studying the percentage of change, economists can accurately predict the changes in a country’s economic climate such as consumption, government spending, wealth distribution and standard of living.   Year GDP – real growth rate Rank Percent Change Date of Information 2003 3.50 % 83   2002 est. 2004 4.10 % 75 17.14 % 2003 est. 2005 4.90 % 87 19.51 % 2004 est. 2006 5.60 % 77 14.29 % 2005 est. 2007 5.50 % 82 -1.79 % 2006 est. 2008 6.30 % 71 14.55 % 2007 est. (GDP- real growth rate www.indexmundi.com) Fig 3. Value of a countrys overall output of goods and services (typically during one fiscal year) at market prices. (businessdictionary.com) The real gross domestic product rate is important to investigate whether development has occurred in a specific country. When referring to the results for Indonesia which are displayed in the Fig 3, a constant increase in the rate of the gross domestic product in Indonesia is evident. Even when investigating the change in the real GDP rates between the years 2004 and 2005(Global Economics, 2009), the time in which the natural catastrophe happened, an increase can be clearly noticed. This increase can be explained by the fact that the disaster happened at the end of the year 2004, while Indonesia might have had a good year in terms of economy and output. The decrease of -1.79 % between the years 2006 & 2007 tends to be due to the fact that at this point in the reconstruction process, people realized what detrimental effects the tsunami had on the region of Indonesia, and also because the majority of the country was primarily concerned with reconstructing the effected regions of the country, and hence were not concerned with increasing their economic output. The Effects of the Tsunami Now that many reconstruction projects have successfully ended, a number of people have been rendered homeless and several people have died. Thus economically and socially, the tsunami left Indonesia devastated. It can be said that aside from the negative effects in terms of casualties and the homeless, the tsunami has also had a positive effect such as an important political effect. From the moment the tsunami struck the regions of Southeast Asia, the quarrels between the Asian countries were laid aside and everyone worked as a team to reconstruct their home countries. Even before the tsunami, Indonesia was referred to as a so-called Less Economically Developed country (LEDC) whose main business lay in tourism. (George Pararas, 2000) With the large donations of companies such as Lufthansa or BASF who donated in education, children now get the chance to receive a form of education that could have never been realized before the natural catastrophe. Such donations also help in sustainable development, since the children get more aware of the natural resources and the best ways to utilize those resources. This can lead to a major difference in the future economy of Indonesia where the newly gained knowledge of the children can be applied. It also can be said that without the Tsunami there would still be no proper or comparable warning system that would forecast incoming tsunamis. So, as a matter of fact, the Tsunami led to a development and increase of the safety standards. It can be argued that without the aid that Indonesia received from foreign countries, it would not be at this stage of development which leads to the fact that it really profited from the catastrophe, from an economic point of view, of course. (Peter Mc Crawley, 2008) According to the chief of UNICEF´s Tsunami Transition support team, ‘The tsunami, despite being a horrific event, also provided a lot of opportunities for those countries’. Speaking to the news channel CNN , the chief further stated ‘It allowed those areas to be built up as well, to have investments in the infrastructure in the social sectors’. (2008) Indonesia after the Tsunami in December 2004 (www.adb.org) Fig.4 Indonesia after reconstruction in 2009 (http://img256.imageshack.us/i/dsc0810s9fj.jpg/) Fig.5 As it can be seen in fig. 4, the current situation in Indonesia is much better than directly after the Tsunami. When comparing the two photographs, you can see a dramatic change after the disaster. Although Indonesia is on the right track in order to become a long-term sustainably developed country there are some factors which can prevent the country from reaching this stage. (CNN, 2008) Such as the intentions the countries had, that gave aid to Indonesia at the time the struck country required it. Now that Indonesia received aid from the donating countries in order to reconstruct their country, it is time for the former receiving country to give back the aid to the donating countries. The amounts of aids that Indonesia received after the natural hazard were large, hence it will take the country a long time to pay them off. Paying Back Funds Owed Organizations such as the World Bank were willing to aid large amounts of money to the tsunami hit country Indonesia because World Bank knew that the aid would eventually turn out to be profitable, since a high rate of interest was being charged. Policies like the one followed by the World Bank can have a detrimental effect on a Indonesia’s economy, as the country would take a long time paying off the debts, thus hindering its GDP. In terms of Indonesia, those bilateral policies with Germany and also with the World Bank prevent the country from reaching sustainable development. But as a matter of fact, Indonesia and all the other struck countries as well, had no other choice than to accept the aids under the dictated conditions. Even though they might have been aware of the long-term consequences, they were in such a desperate and miserable situation that they had to grasp every helping hand they could reach.( Stephanie Daschke) However, there needs to be a solution for disaster hit countries such as Indonesia, to deal with the problem of high interest rates demanded by the countries or organizations providing financial assistance or resources, services and goods. Ways to Prevent Tsunami In order to prevent tsunamis from happening or at least from causing such great damage, different projects are being created for the development of tsunami early warning systems. This is an important step in order for Indonesia to develop sustainably because, for example if a new massive wave hits the country, the region can get evacuated before hand and so there are less casualties and maybe less damage in the infrastructure. A project which just concentrated on the development of a tsunami early warning system is called “GITEWS”. This is a project that is lead by a group of German technologists and analysts. The functions of this new Tsunami early warning system are analyzed and shown in the Figure 6. (www.gitews.de) fig 6 Figure 6. The reason why the essay specifically concentrates in tsunami early warning systems is because as already mentioned, this can be referred to as one of the biggest steps towards sustainable development, due to the fact that those systems are made with the technology or technology standard that is used in More Economically Developed Countries (MEDC’s) and this is the stage in development that Indonesia is wanting to reach. Those types of warning systems also clearly highlight the importance of the tsunami that has devastated Indonesia, because it can be argued that without this, such tsunami warning systems would still not exist in the regions. It can also be argued that without the knowledge and financial aid of foreign countries, it would have been impossible for Indonesia to develop such a system. Directly after the tragic natural hazard, Wattegama used the words: ‘Your tears are mine’ to describe the feelings of the people in Indonesia and in the world. Four years after the natural hazard, the situation of the people is described as, ‘Having completed the recovery process, most tsunami victimized societies stand on their own feet with smiles’. (Chanuka Wattegama 2008), Conclusion It can be said that this natural disaster caused great harm to the affected regions, particularly Indonesia due to the fact that it is the largest evolved state in the world. Since Indonesia was already in the process of development before the Tsunami, where rather moderate process was made, the Tsunami can also be seen as a positive event for Indonesia because although major parts had to be reconstructed, the aid that Indonesia received from foreign countries fastened up the overall development process of the country. While the different types of aid have a positive effect in terms of development in the short-run, they can however prevent Indonesia from being sustainably developed in the long-run. This is due to the fact that now that Indonesia is at a state where all the major crisis and suffering is over, the countries or organizations that once gave aid to the struck country want either high interest rates or goods and services in return. Whereas if such policies did not exist in which the former receiving country has to now pay the aid off, Indonesia could develop even quicker because the goods and service that are now leaving the country could stay in and could be used for further development. While various projects have ended (U.N Special Envoy), some are still continuing (UNICEF). For this reason it is impossible to say that aid has been ended or cut, although the major aid projects have ended and it is basically now the duty of the people living in Indonesia to advance development in their country. To sum it all up, giving aid is often not an act of selflessness and benevolence, but there are often economical aspects of making profit in the long-run. Of course there are good people whose only aim is to help each another. But as the examples given show, there are also others who want to benefit from their donations, which is a common way of acting and which should not be condemned on a moral basis. It is natural that certain parties such as the World Bank do not give money for nothing and it is nevertheless an act of helping those who really need support. It is a fact that both are needed: official aid and voluntary aid, because none of them alone would really bring an equal change compared to a combination of both types of aids. The tsunami had both positive and negative consequences to the affected region because although it caused many casualties in the regions, the development process of the country speeded up because of the aid that Indonesia received from foreign countries. The negative aspects balance out the pros due to the fact that the life of a person is worth more than anything else. Works Cited Sources from the net: Figure 1. Translated into English original Source Unknown author, 2009, (November), Seebe ben im indischen Ozean 2004 Retrieved November 7, 2009, from http://de.wikipedia.org/wiki/Seebeben_im_Indischen_Ozean_2004 Article: United Nations Educational Scientific and Cultural Organization, (2007June)BASF-The Chemical Company Retrieved June 22, 2007, from http://portal.unesco.org/ci/en/ev.php URL_ID=24808&URL_DO=DO_TOPIC&URL_SECTION=201.html Article: Help Alliance Stephanie Daschke, German PDF Document/ Help Alliance,) Retrieved from www.help-alliance.com/?file_id=21 Article: Deutschland als erster bilateraler Geber beim Wiederaufbau in Indonesien aktiv (Translated) Source: German Federal Ministry for Economic Cooperation and Development (BMZ) Retrieved May 26, 2005, from http://www.bmz.de/de/presse/pm/presse200505261.html Figure 2: Disbursments Vary across Sectors, author unknown, February 2007, Retrieved from, http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/INDONESIAEXTN/0,,contentMDK:21653678~pagePK:141137~piPK:141127~theSitePK:226309,00.html Figure 3: GDP-real Growth rate Table, Retrieved from, http://www.indexmundi.com/indonesia/gdp_real_growth_rate.html Definition of Gross Domestic Product, unknown author, Retrieved on February 2009, from http://en.wikipedia.org/wiki/Gross_domestic_product Unknown author, Global Economics Research, Retrieved on December 2009, from http://www.tradingeconomics/GDP-Growth.aspx?symbol=IDR Article: CNN, Improvements seen four years after Indian Ocean Tsunami, unknown author, December 25,2008, Retrieved from, http://edition.cnn.com/2008/WORLD/asiapcf/12/25/tsunami.anniversary/index.html Picture/ Figure 4: Indonesia after the tsunami in December 2004 unknown author, Retrieved from, www.adb.org Picture/Figure 5: Indonesia after reconstruction in 2009, unknown author, Retrieved from, http://img256.imageshack.us/i/dsc0810s9fj.jpg/ Picture/Fig 6 Picture of a Tsunami early warning system, unknown author, Retrieved from, www.gitews.de/.../Homepage/ GITEWS_dt_schema.gif Author unknown, German Technical Help Organization, Retrieved from, http://apps.develebridge.net/usiotws/pageaahome.html Mc Crawley Peter, Impact of Financial Flows: Emergence of a Construction Boom, Retrieved on December 15, 2008, from, http://www.adbi.org/working-paper/2008/12/15/2766.reconstruction.post.tsunami.experience/impact.of.financial.html Carayannis -Pararas George, The Great Tsunami 26 December 2004 in the Indian Ocean, (2000), Retrieved from, www.drgeorge.com/Tsunami2004Indonesia.html Author unknown, Education for sustainable development, retrieved from, http://en.wikipedia.org/wiki/Education_for_Development Verulam Thorton Paul Associates, 2006, Retrieved from, http://www.adb.org/Documents/Events/2006/Hid-Effectiveness/country-papers/INO-MDF.pdf Quotes: Your tears are mine” and “having completed the recovery process, most tsunami victimized societies stand on their own feet with smiles.” Wattegama, Chanuka (2008), retrieved on December 26, 2008 from, www.lirneasia.net Sources from Books: Figure 1: Glanville, Allan, (2000) Graphic from Geography an Integrated Approach, page 642, Read More