Peace and reconstruction: The story of Aceh
Paul Wolfowitz, Washington D.C.

Soon after the Asian tsunami ravaged the province of Aceh in  Indonesia two years ago, I flew over the site of the  devastation and found it difficult to imagine that children would once again go to school here, that markets would reopen,  that life would return to normal. The scale of damage was   unparalleled even for those who had worked in other disaster  areas around the world. The tsunami inundated a poor community  -- already torn apart by a 30-year old conflict -- claiming  167,000 lives and destroying all major infrastructure in its  path.

The World Bank found itself -- alongside hundreds of other donors, government and non-government agencies -- coming to terms with the enormous task of helping the people of Aceh  rebuild their lives. Yet Aceh is slowly but surely recovering.

The tragedy of Aceh and neighboring Nias combined has  culminated in the largest reconstruction effort in the  developing world. Up to US$8 billion, of which more than half has already been allocated to projects, is expected to be  spent by 2009. This will support 1,500 projects to be undertaken by more than 300 donor, government and non-government agencies.

Never in history had so many individuals, businesses and countries contributed so much in response to a single natural disaster. Through the Multi Donor Fund for Aceh and Nias, the World Bank is helping manage close to $600 million in grant  funding from the generous contributions of the European Commission, the Netherlands, the United Kingdom, and twelve other donor countries and agencies. Forty percent of these funds have already been spent to build housing, bridges, schools, roads, clean water and waste management systems.

Through community-driven programs, the Fund is creating a strong ownership among the people of Aceh and sense of dignity in their achievements. The Fund is also helping to  re-establish a system of land titling and property rights  recognition. I still recall the pride of Ibu Kartini, one  tsunami survivor, when I handed her a new land title during my  visit to Aceh last April. She told me she was going to use her  land as collateral to start a new business.

 Of course, progress on the ground is never as fast as we want  it to be, and many challenges remain. Bureaucratic  bottlenecks, for example, have contributed to delays in the distribution of land titles by local authorities. Securing  legal rights to land is vital for communities to move on with the process of rebuilding their lives. It will take another two to three years to complete all the reconstruction projects in Aceh-and that is when the final verdict on the reconstruction effort will be passed.

Reconstruction aside, the story of Aceh is also a story of how  tragedy has brought people together. The wave destroyed almost  everything in its path, but it could not destroy the sense of  community among the people of Aceh. Before the tsunami, Aceh  was one of Indonesia's most isolated regions. Several decades  of conflict in the province had brought despair. But since the  Helsinki Peace Agreement between the Free Aceh Movement (GAM)  and the Government of Indonesia -- negotiated in the aftermath  of the tsunami with the able mediation of Finland's former  president Martti Ahtisaari representing the EU -- the people  of Aceh have been cultivating the seeds of peace.

 Peace agreements are often fragile. Ink on paper doesn't  create peace. What does create peace is when all sides take  responsibility for making the reconciliation work.   International experience tells us peace is more sustainable  when those returning home from conflict can find jobs and  rebuild their lives. According to a recent World Bank field  study, there are now more people displaced in Aceh because of  the conflict than there are tsunami refugees. The  reconstruction effort is vital to the peace process. At the  same time, the peace process offers the strongest foundation  for a sustainable reconstruction.

In a promising sign that the peace is holding, Aceh's voters  cast their ballots in the first ever direct elections this  month. They were free, fair and peaceful. But the challenges  before the expected new governor, Irwandi Yusuf, a former GAM  figure, are immense. Not only will he and his administration  have to deal with the after-effects of the long conflict, but  they will also have to continue the fight against poverty and  face the longer term development challenges in the province.

This will include protecting the basic rights of all citizens  that make up Aceh's unique cultural fabric.  Before the tsunami, Aceh had one of the largest provincial  government budgets in Indonesia, mainly because of its oil and  gas resources. Yet, partly because of the conflict, it has  continued to struggle with one of the highest poverty levels  in the country. Today, the promise of peace is creating a  renewed sense of hope and stability.    When I recall that helicopter flight over Aceh, I remember  being struck by signs of hope amid the horrible scene of   destruction. Many of Aceh's places of worship were still  standing, signifying the strong spirit and resilience of the  Acehnese people that the terrible wave could not destroy. This  same resilience is what will drive the development of Aceh  forward.

The reconstruction and peace process in Aceh is a work in progress, but it is a story the whole world can learn from.  It's a story of how humanity can prevail and triumph after a  tragedy of unparalleled scale.  

 The writer is President of the World Bank.