'Black economy' threatens Aceh peace

Wiryono Sastrohandoyo, Ahmad Humam Hamid and Brian Millen, Jakarta

The military conflict is essentially but one part of the problem in Aceh. The greatest threat to security in Aceh is the mature criminal industries of smuggling, kidnapping and ransom, extortion, illegal logging and the marijuana trade. Three of the five points relate to the "black economy".

It is the protection and perpetuation of these industries that will cause problems. Embedded in this black economy are the interests of the government apparatus and the interests of the Free Aceh Movement (GAM).

Although GAM's operational control is central for the conduct of military operations, the operations themselves are responsible for the maintenance of their finance and funding. Some degree of collusion is suspected to exist between GAM and sections of the government apparatus in the marijuana trade.

Businesses in Aceh face significant problems. Firstly, they must transition in accordance with every other company in Indonesia who are evolving from businesses under New Order systems, to one that has to come to grips with a new political paradigm of vast pluralism. There is considerable legislative uncertainty in this process.

The Special Autonomy legislation requires the support of approximately 71 to 72 subsequent pieces of legislation to make it work and contests the political will of the government to actually push these through.

Secondly, they need to apply strict security measures and a degree of stability to ensure the safety of their assets and some degree of certainty. What is crucial is companies coming to grips with the fact that community development, community relations, dealing with official and unofficial relationships within society is crucially important to run their business.

New businesses are left with the challenge of implementing heightened security measures to start their business, while having to develop comprehensive community development programs and relations, to achieve forms of community based security.

Rampant extortion has accelerated to levels hitherto unknown. While some very large companies have rejected paying these extortion payments, others have been paying at these increased extortion levels.

Infrastructure developments that have been halted and in some cases crippled have had significant impact on business in the province. The power grid that will be completed in the Pidie regency by July this year, and the Banda Aceh to Medan railroad needs to be rebuilt and finished as soon as possible.

The road system will need to be opened up and improved for there to be big business in Aceh. In the conflict resolution process, there is a necessity for reconstruction and redevelopment. It is this that will win the hearts and minds of people. There may not be much new business occurring in Aceh for at least three to four years, however, if the emergence of new businesses started now, it would help the conflict resolution process.

The peace process has provided a fresh opportunity for Aceh. In the short term, assistance will be needed just to take care of the immediate needs of the people.

Yet hand-outs will not do much in the long run. It is far better to empower Aceh's skillful entrepreneurs and open the doors to outside investment in order to integrate more profitably in the greater economy of Indonesia. Economic development led by the private sector is the key to improving welfare, however, conditions in Aceh are not as yet conducive for such an approach.

The peace process is taking much longer to put into practice than expected and the adversaries must learn to trust each other.

Another problem is the unprecedented flood of money rushing as the result of the share in the oil and gas revenue. The flow of income caught both government and the people by surprise.

No serious and well thought development plans have been drafted, no strategies have been thought out about ways and means to promote Aceh's long-term development. As often happens in such cases, the government throws money at ill-conceived infrastructure projects.

The Leja Galaska road with a budget of US$160-$170 million is one such project. The temptation for contract commission and kick-backs is proving too great to resist. The road, when it comes into being will have cost the people double its real cost and will begin to destroy the forest and hinterland of Aceh.

The government could have won the hearts and minds of the people if it had spent a small portion of that money on food, medicine, and shelter. Peace would then be almost tangible.

Ordinary Acehnese are hopeful at the prospect of peace, but they keep asking about the whereabouts of government and evidence of concrete measures to improve their lives. The peace agreement is three months old now, but if you go to even moderately remote areas in Aceh, no trace of the state can be found.

The absence of state governance below the subdistrict level makes peace conditions indistinguishable from insurgency. People say that the present government will be there until the general elections in 2004, but looking at GAM's present operations in the field, it seems unlikely that there will be a general election.

One of the critical threats to the peace agreement right now is that GAM is taking advantage of the lull in the war. It uses the standstill to gain control that it lost during the military offensive, and to reestablish administrative control over many parts of Aceh.

(One perception is that) GAM is using the peace period to rally more people for independence. This relates to the inefficacy of the local government who will remain there until 2005. People don't see any other alternative to GAM as the likely government. How long is TNI willing to sit quietly while GAM consolidates its forces? The way this problem is solved has implications for Papua and other areas of Aceh, particularly if the army manages to persuade the nation that the situation has become intolerable.

The international community is inclined to sympathize with insurgents partly because government suppression always tends to exceed necessity, and because the rebel cause of "independence" is universally hailed as good.

International observers are therefore quick to condemn military violations of truces, but hesitant to censure rebel brutality. Some of this partiality can be gleaned from the way the Henry Dunant Center drafts peace documents.

Ambassador Wiryono Sastrohandoyo observed that the word "will" translates to "must" when relating to an obligation of the Indonesian government, but changes back to "will" when performance is expected from GAM. Rather than fuss about details like translation of words. Ambassador Wiryono prefers to push the whole process along and bring it to a solution acceptable to all.

Mercy and sympathy ought to be addressed to the people, to the widows and orphans, to the down-and-outs in the refugee camps, and not to GAM. Activist Ahmad Humam Hamid recounts that the moment the peace agreement was signed, GAM started to implement their version of the peace plan.

Weapons were imported, the population was told that Aceh is about to declare its independence, the UN will come, like in East Timor, and TNI can do nothing. Dr. Hamid is appalled by the estimate that until today the majority of the people in Aceh received their information about the peace from GAM, not from the government. Extortion continues openly. It is now called a "tax", a Nangroe tax to support the struggle for independence.

GAM violates the peace accord and does so openly. The government complains, but does not address the complaints to the Joint Security Commission. The HDC is too busy trying to win trust and confidence to call "a spade a spade" when violations do occur. The government's chief negotiator understands, and continues to push the process.

The above is taken from the writers' executive summary on latest developments on Aceh for Strategic Intelligence's Executive Forum held on Feb. 25 in Jakarta. Wiryono Sastrohandoyo is Indonesia's Chief Negotiator for Aceh; Dr. Ahmad Humam Hamid is Board Director, Aceh Care Human Rights Center, and Brig. Gen. Brian Millen is Director of Research & Analysis, Assessments Group Indonesia, a security risk and business intelligence consultancy based in Jakarta.