Aceh moves to rebuild shattered economy<\/p>\n
Aceh, with a population of 4.2 million, is always described as
\na natural resource-rich province, and the people are very proud
\nof their territory's abundant wealth.<\/p>\n
Protracted trouble in the province, however, has severely
\ndamaged nearly all aspects of life, including the local economy.<\/p>\n
Local officials say the unemployment rate is at 40 percent,
\nwhile poverty is higher than in many other provinces.<\/p>\n
Thousands of Javanese transmigrants have deserted their coffee
\nplantations in Central Aceh, while thousands of hectares of oil
\npalm plantations in West Aceh, Aceh Singkil and South Aceh have
\nalso been abandoned.<\/p>\n
According to the Aceh Bureau of Statistics, the province's
\neconomic growth contracted by an average of 0.34 percent from
\n1997 to 2000, including minus 1.33 percent in 1999 and minus 0.47
\npercent in 2000.<\/p>\n
Its annual budget heavily depends on the general allocation
\nfrom the central government, even though the province now gets 70
\npercent of government revenue from the exploitation of natural
\nresources.<\/p>\n
Only 9 percent of the 2001 budget for Aceh, totaling Rp 515
\nbillion (US$57 million) was funded by Aceh.<\/p>\n
Its economy is also dependent on its neighbor, North Sumatra
\nprovince, for many things, from the supply of chicken eggs to
\nvegetables.<\/p>\n
Most of its electricity needs is supplied by North Sumatra.
\nAlso, regencies or municipalities located along the Banda Aceh-
\nMedan highway, like Pidie, North Aceh, East Aceh and Bireun, are
\nmore prosperous than other places in the province.<\/p>\n
Its strategic geographic position along the Malacca Straits
\ndoes not help much to reduce its isolation from the outside world
\ndue to the poor condition of its ports.<\/p>\n
\"Our top economic priority is to empower the people. We do not
\nneed much financial assistance. People can build their own
\neconomy when security is restored,\" said economist Nazamuddin,
\nhead of state Syahkuala University's Post Graduate School.<\/p>\n
Many Acehnese, including their top leaders, do not realize
\nthat soon they will no longer be able to rely on the local
\nportion of revenue obtained from natural resources, including
\nfrom the sales of liquefied natural gas (LNG) from its Arun
\nplant.<\/p>\n
In 2010, PT Arun NGL is expected to operate only one of its
\nexisting six natural gas liquefaction trains due to depleting gas
\nreserves.<\/p>\n
Oil reserves, currently exploited by PT ExxonMobil Oil
\nIndonesia, have also decreased over the years.<\/p>\n
Unless new oil or gas reserves are found, the province will
\nhave to boost production of its agricultural products to
\ncompensate for declining gas and oil revenue.<\/p>\n
\"Many local legislators were shocked when told recently about
\nthe declining LNG production. They never thought Arun would soon
\nend its operations,\" PT Arun's spokesman Irwandar explained in
\nLhokseumawe.<\/p>\n
With the ongoing peace process, although it remains very
\nfragile, there is an opportunity to reconstruct and rehabilitate
\nAceh.<\/p>\n
Now more and more people, including foreigners, are arriving
\nin Aceh to help the Acehnese rebuild their economy.<\/p>\n
Several foreign organizations like the British aid
\norganization Oxfam, the United States Agency for International
\nDevelopment (USAID) and the World Food Program (WFP) operate in
\nthe province.<\/p>\n
Last month, donor countries and institutions from the
\nConsultative Group on Indonesia (CGI) promised to help rebuild
\nthe province.<\/p>\n
So far only Japan has honored its commitment made during the
\nCGI meeting by providing a US$5 million grant and another $1.2
\nmillion contribution for the Joint Security Committee (JSC),
\nestablished following the peace agreement to monitor its
\nimplementation in the field.<\/p>\n
\"The stability of Indonesia is very important not only for
\nJapan but also for the region,\" Shigekazu Sato, deputy chief of
\nmission at the Japanese Embassy in Jakarta, told The Jakarta
\nPost.<\/p>\n
Nazamuddin, however, warned foreign donors to be more careful
\nin channeling funds to prevent misuse.<\/p>\n
\"They must find a way to reach the grass roots,\" said the
\neconomist.<\/p>\n
Nazamuddin is right. Efforts to reconstruct Aceh's economy
\ncould be derailed if rampant corruption is not dealt with.<\/p>\n
It is no secret that much of the huge amounts of money pumped
\ninto Aceh by the central government to win public support for
\nremaining part of Indonesia has been misused. Some local
\nofficials disclosed that at least 40 percent of project funds
\nhave been misused.<\/p>\n
Also, concessions accorded by the central government, such as
\nthe opening of a free port in Sabang, have also been abused. For
\ninstance, local officials reportedly profited handsomely from the
\nillegal importation of used cars from Singapore through Sabang
\nPort.<\/p>\n
In addition to corruption, extortion is also rampant.
\nExtortion is practiced by both Indonesian security forces and
\nFree Aceh Movement members.<\/p>\n
Zubir Baziad, a prominent property contractor in Lhokseumawe,
\nsays that GAM collects 10 percent of the value of most projects,
\nand even issues a receipt. Local officials, including military
\nand police officers, usually also turn up to ask for money as
\n\"friends\".<\/p>\n
\"GAM has collected the money for years. I do not mind, they
\nare also part of our big family,\" Zubir said.<\/p>\n
GAM commanders have admitted that they collect money from
\nbusinesses in Aceh as \"taxes\".<\/p>\n
The JSC says such collections are in violation of the peace
\nagreement.<\/p>\n
If the Acehnese can eliminate the corruption and the
\nextortion, they can expect successful economic development to
\nfollow.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/aceh-moves-to-rebuild-shattered-economy-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}