Debt Deal Helps Mend Quake-Damaged Schools

The Jakarta Globe

Elisabeth Oktofani & Putri Prameshwari

Jakarta. In the wake of the May 2006 earthquake that damaged more than 3,300 schools in Yogyakarta and Central Java, a debt-restructuring deal effectively channeled funds toward rebuilding some of them, National Education Ministry officials said after the debt-swap certificate was handed over recently.

Given the extent of the damage, the ministry prioritized primary and junior high schools for rehabilitation.

“The nine-year education program covering primary and junior high school is a compulsory one that plays a fundamental role in helping develop children’s potential and assisting them to be successful at the next level of education,” Suyanto, the ministry’s director general for primary and secondary schools, said on Monday.

Under the deal, worked up in the aftermath of the quake and running until 2008, the German government agreed to waive 20 million euros (Rp 250 billion at the time) of official development assistance owed to it by the Indonesian government, in exchange for the latter investing half that amount in education development activities.

The initiative, called Debt Swap IV, targeted 193 primary schools and 34 junior high schools in Yogyakarta and Central Java.

The schools were selected based on the severity of the damage they suffered as a result of the magnitude-6.3 earthquake, and were spread across Yogyakarta municipality, Sleman, Kulon Progo and Bantul districts in Yogyakarta, plus Klaten, Sukoharjo and Boyolali districts in Central Java.

During its two years of operation, the program’s funds were managed by the two provincial administrations, district-level education offices and the National Education Ministry.

In its final report to German development bank KfW, which bankrolled the program, the government showed it had surpassed the targeted investment in education called for under the debt swap, having spent a total of Rp 132 billion, or 5 percent more than it was obliged to.

Last week, National Education Minister Muhammad Nuh received a debt swap certificate for the 20 million euros from the KfW, signaling the project’s successful conclusion.

This marks the second debt swap between Germany and Indonesia in the field of education.

In 2002, Germany waived Indonesia’s 25.6 million euro overseas development assistance debt on condition that Indonesia invested at least half that much in basic education.

The government decided to invest the money in a project to construct over 500 training centers for biology teachers, complete with teaching materials and equipment, in 17 provinces across the country.

More than 30,000 primary schools and four million students were believed to have benefited from the program.

“This time, it’s for increasing the quality of education in primary and junior high schools across Yogyakarta and Central Java,” Nuh said.

Suyanto said the success of the latest debt swap suggested it was a feasible model for funding the rebuilding of schools in other disaster-hit areas

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