On August 12, a plan for reconstructing the areas struck by the May 12 earthquake in Wenchuan was released for public review. As the drafters of the plan put it, they welcome comments and suggestions from people in and out of the country.

According to primary estimates in the plan, the reconstruction would cost a total sum of 1 trillion yuan (US$147 billion).

The sum is roughly the same as the gross domestic product (GDP) of Sichuan Province in 2007. It is also about 20 percent of all the government income last year. A huge wealth even compared with our increasingly stronger economy.

Therefore, the reconstruction plan said the authorities would try to raise the fund through multiple means, including government input, fund-raising from businesses and bank loans.

The money is obviously not easy to get, but a bigger challenge is to ensure this fund is spent efficiently without waste.

After all, the reconstruction involves numerous projects of different sizes and types. One of the most important missions for the authorities is to put the reconstruction work under the scrutiny of the administrative, the legislature, the public and the media. The reconstruction must be monitored by professional auditors and the projects should be assessed for their performances and efficiency.

However, it is necessary to note that most supervision takes place after the money is spent or the project is finished. This might not be able to check unnecessary expenditures beforehand.

To handle these challenges, innovation in institutional arrangements is needed. As the plan said, innovation in institutions is needed and a cooperation of different sectors would be nurtured.

Such innovation refers to establishing a framework to encourage the involvement of businesses, non-government organizations (NGOs) and individuals to take part in the reconstruction. At the same time, market-oriented means should be explored.

The scheme mentioned above could help the spending of the reconstruction fund more efficiently, for the market-oriented means has much higher efficiency than the administrative orders in allocating resources.

At the same time, if the administrative is in charge of spending the money as well as supervising the money flows, it would be judging itself. It would not only leave big room for corruption and abuse of power, but also increase the possibility of the money being squandered.

These headaches could be easily eliminated once the businesses and NGOs are invited into the reconstruction plan. They could also play a significant role in making the construction plan more flexible.

Therefore, the authorities should encourage the private sectors to take part in rebuilding the quake-affected areas. Businesses and NGOs should get involved under fair competition, so that resources flow to the most needed places with least wastes. The administrative should pose as a neutral supervisor, watching the reconstruction with vigilance and care.

Besides businesses and NGOs, the administrative should consider empowering the local public in managing and supervising reconstruction projects.

If some of the projects are not highly demanding in technology or skills, local people could manage these projects by themselves through selected commissions. Such projects include rebuilding roads in rural areas, fixing the farming facilities or repairing damages to the ecological systems.

The administrative could save a lot of efforts if it does not have to manage these projects directly. Instead of setting projects, earmarking capital and enlisting qualified managers, the administrative could give the needed fund to commissions or agents elected by local people. With the designated money, the commissions could employ local people to work for these projects and report to the administrative after they finish.

Thus, a lot of managing costs could be saved for the administrative, the projects could be constructed to meet local people's needs and more jobs created in the quake-affected areas.

As a matter of fact, the private sector and the public have expressed strong wills to contribute to reconstructing the affected regions. Well-known businesses had announced they were ready to participate in the efforts.

Many NGOs have already started their own reconstruction programs, though mostly small, and reconstruction projects were also launched by individuals or other institutions.

(China Daily August 20, 2008)