Resource-rich Aceh suffers from prolonged violence

Resource-rich Aceh suffers from prolonged violence

A'an Suryana, The Jakarta Post, Jakarta

The war-torn province of Aceh is known for its rich natural
resources, notably oil and gas, and yet its people are among the
poorest in the country.

World oil and gas giant ExxonMobil Oil has been operating for
years in Aceh, tapping oil and gas from the region. The
profitable business earns the government around US$1 billion per
year.

Not only oil and gas, the 57,366 square kilometer Aceh, a home
to four million residents, also has abundant wealth in several
commodities, notably palm oil, sugar, chocolate and copra.

Given the rich natural resources, the province should have
been able to raise the living standard of its people. However,
government data shows that 40 percent of Acehnese villages can be
classified as poor.

What went wrong? The popular view blames the central
government for the misery that the Acehnese must shoulder.

Most of the natural resource revenue goes to the central
government's coffers in the past years, and only a little was
sent back to Aceh.

This injustice is cited as one of the main sources of the
rebellion in Aceh.

The armed rebellion in Aceh has been going on for decades,
with the latest waged by the Free Aceh Movement (GAM), which has
been fighting for Aceh's independence from Indonesia since 1976.

GAM's campaign increased after former authoritarian president
Soeharto stepped down in 1998 and his successor B.J. Habibie
lifted the military operation status for Aceh.

As conflicts between the Indonesian military and GAM became
frequent, these did not only take lives as casualties but also
degraded the life of the Acehnese in general.

Trade, schooling and other activities among the people have
been plagued by the conflict, preventing them from doing
productive activities.

The conflict even forced ExxonMobil Oil to cease operations
for five months in 2001. The impact was severe as the giant
company was a sole gas supplier to a number of industries in
Lhokseumawe, including natural gas liquefaction company PT Arun
NGL and fertilizer companies PT Pupuk Iskandar Muda and PT Aceh
ASEAN Fertilizer.

These companies were also forced to suspend operations.

Not only the oil and gas industry, but overall economic
indicators show that the conflicts have impacted terribly on the
Acehnese people.

The number of middle and big companies in Aceh dropped by
34.21 percent to 75 companies in 2000, from 114 companies in
1998. Likewise, the number of workers employed by these companies
also went down from 15,822 in 1998 to 10,521 in 2000.

The gloomy situation also occurs in the investment side. The
value of approved domestic and foreign investment has continued
to drop since 1998.

Approved domestic investment plunged from Rp 1.3 trillion
(about US$150 million) in 1998 to only Rp 1.2 billion in 2000.
Approved foreign investment also slumped from US$6.2 million in
1998 to zero in 2002.

Exports have dropped from $3.1 billion in 1991 to only $667
million in 2001.

Government after government since Soeharto has tried to end
separatism and restore normalcy in Aceh.

In a bid to end separatism, then president Abdurrahman Wahid
initiated peace talks with GAM and drafted the special autonomy
law.

Abdurrahman's initiatives were continued by his successor
Megawati Soekarnoputri, who signed the special autonomy law into
effect.

The law basically gives wider autonomy for local
administrations to carry out local affairs. Unlike any other
parts of the country, Aceh is granted freedom to observe the
Islamic Sharia law. Not only that, the law also gives more
revenue to the Acehnese from its oil and gas resources, from only
15 percent to 55 percent.

Nevertheless, autonomy has not ended separatism. And yet,
Megawati still follows Abdurrahman's peace initiative by
continuing the talks with GAM.

Megawati's administration reached a landmark agreement with
GAM by signing the Cessation of Hostilities Agreement late last
year. But this agreement has once again failed to end the
conflict as the government sees GAM benefiting more from the
agreement by recruiting more fighters and buying more arms.

The government is now preparing to launch another military
operation in Aceh to end separatism. If the war drags on for
longer than expected, it will only open a new episode of
bloodshed and misery for the Acehnese.

Aceh Exports
==============================================================
Year 1991 1992 1993 1994 1995 1996 1997
Amount US$3.1b $3b $2.9b $2.5b $2.6b $2.6b $2.7b

Year 1998 1999 2000 2001
Amount $2.1b $1.8b $1.8b $667m
==============================================================
Source: Central Bureau of Statistics