Aceh: Rebuilding the Economy

Aceh needs no better champion than Bruce Harker, cheap who spoke glowingly of Aceh’s potential for rebirth at USINDO on January 25.  Harker spent almost 7 years in Aceh in the 1980s and returned regularly between 2000 and 2003 working with the economics faculty of Syiah Kuala University on strategies and programs for renewed economic development in the province.  “We lost our hearts there,” he said.

He compared Aceh for size to West Virginia, though with at least twice the population.  Like West Virginia, Aceh is mountainous, largely agrarian, with a history of rural backwardness, of communities who “by choice and geography,” live simple, self-reliant lives.

With the aid of a large wall map he described the course of the tsunami’s impact on the battered province.  The almond-shaped province is dominated by the western end of the rugged Bukit Barisan mountain range running southeast to northwest through its center, surrounded by a coastal plain that varies in width.  On the northwestern tip is its capital city of Banda Aceh, the historical seat of Aceh’s sultans.  Harker described how the tsunami, pushing from the epicenter of the earthquake off the west coast, slammed into the western coast, obliterating Meulaboh and Calang with it their sea ports, coursed around the northwestern tip of Sumatra and rushed southward into the river delta town of Banda Aceh .  It washed away the low-lying barrier island and historic port of UleLhee, destroying its newly constructed ferry port as well as most of the old and some newer sections of the town of Banda Aceh.  In fact, it appears that elevated, dike-like, roads built by the Dutch many years ago on the east and west of town served to trap and channel rushing flood waters inside, increasing the damage to the downtown area.  The tsunami also funneled up the Krueng Aceh river’s two principal forks south of town.  One result was the loss of at least 400 police and many prisoners when the riverside police barracks and jail were hit from both sides by the tidal wave.  As a result, the damage to the old town and its two commercial sections was almost complete.  Its new ferry port as well as the portions of the Krueng Raya, Malahayati Port were destroyed.

Among the areas spared much of the tsunami’s force were the campuses of three of Aceh’s principal institutions of higher education — including its premier campus at Syiah Kuala University, which was protected by the high southern bank of the Krueng Aceh.   Even though it appears that only the ground floors of their buildings were affected, this probably means that computer and science laboratory facilities, libraries, furniture and university records have been lost.  It is still uncertain how many faculty and students died in the tidal wave.

The population of Aceh has been variously estimated at 4 to 4.3 million, but Harker said it is probably less than that, since, by some estimates he finds credible, perhaps as many as one million Acehnese, including many if not most their educated and business elite, now live outside Aceh.  These are people who, in increasing numbers, left Aceh for Medan and Jakarta during the military operations of the 1990s and the armed rebellion of the last 4 years.  Harker stressed that while many lives were lost along the west coast and in Banda Aceh, most of Aceh was undamaged by the tsunami.  The combined population of the Aceh Besar district (adjacent to Banda Aceh) and the north coast corridor to the border of North Sumatra province is approximately 2.5 million or about 65 percent of Aceh’s population and the mainstay of its economy.  Nevertheless, he pointed out that in addition to those who died, lost family, friends and community as well as all they owned, 500,000 or more have been affected economically by the loss of market centers, roads, and ports.   Judging from news reports, this is especially severe for the hinterland populations between the destroyed towns of Calang  and Meulaboh.  In addition, both there and at the river mouths of the north coast from Banda Aceh to Lhoksuemawe, fishing fleets and boat yards and craftsmen who might replace lost boats (traditional fishing boats of local hardwoods), have been lost.

From south of Meulaboh north to LamNo much of the southwest coastal plain was inundated and suffered the heaviest loss of life.  Moreover, with its coastal road to Banda Aceh washed out, and cut off by the rugged Bukit Barisan Mountains on the north, relief efforts were slow to arrive.  On the northwest coast, from Calang north to LamNo, fishing villages, marginal-quality rice fields and ageing smallholder coconut groves were destroyed.  The full brunt of the tsunami swept over this area and smashed into nearby cliffs.  All of this is probably gone, he said, and suggested that little could be done to rebuild communities on this part of the coast.

The northeast coast, however, wasn’t hit by the brunt of the tsunami.  This offers opportunities to rebuild Aceh in a new way.

Higher Education in Aceh

Syiah Kuala University, Aceh’s premier higher education institution (with 1300 faculty and 20,000 students before the tsunami), Harker likened to a U.S. land grant institution such as Penn State University, in State College, Pennsylvania where he now lives.  Both institutions train teachers, modern farmers, foresters, engineers, extension workers, economic development experts and government managers, as well as critical experimental and extension support to their farming communities.  Syrah Kuala University is “outward looking, quite cosmopolitan,” he said.  They have taken English language training, economics and business management as well as modernizing agriculture very seriously in the last two decades.  He referred to the halcyon days of the 1970s and early 1980s, when international aid, multinational experts and multinational investment worked with Acehnese on a host of projects.  “It was an energetic, exciting time,” he said. “With the help of the Dutch, the United States, Japan, and the British; with loans from the Asian Development Bank, the EU and other international lenders; with projects and foreign training assistance from donors such as the Ford Foundation, Rockefeller Foundation, and USAID, university economists, agriculturalists, and teacher trainers gained higher degrees;  extension forces were trained and staffed, local development planning offices were created, HYV rice was introduced and spread throughout Aceh, childhood immunization improved, and critical economic infrastructure was built.  Bridges and factories were built; irrigation projects were developed.

But, in the 1990s a downward spiral of disinvestments began. The rebellion and the government crackdown, followed by open armed conflict from 2000 onward have stalled and reversed development.  Aceh’s population that was ranked in the top quartile of household incomes and caloric intake in the 1980s is now in the bottom quartile.  University surveys show 30 to 50 percent of households below the national poverty line.

Many talented Acehnese have fled taking with them as much as 40 percent of Aceh’s businesses and investment capital since the late 1990s.  Syiah Kuala and Aceh’s other principal universities are exceptions.  Government funding continued, faculty stayed and continued their role as mentors and trainers of junior people all over the province.  Syiah Kuala is Aceh’s top educational and ‘development’ institution by far, he said.  In response to a question about corruption in government and its threat to this new and vast flow of redevelopment funding, he said “We can count on them.  They won’t just take the money; they’ll do the job.”

If economic development and re-staffing the province’s schools are central issues, three other higher education institutions are also worthy of strong support, he said.  Malikussaleh University in Lhokseumawe and the Muhammadiyah University and IAIN Ar-Raniry in Aceh Besar can also play substantial roles.

Recipe for Recovery

“We have to get Acehnese back to work in large numbers,” Harker said.  The tsunami’s destruction offers new opportunities for re-evaluating economic assets and rebuilding accordingly.  He suggested that rebuilding the portion of the west coast road northeast of Calang to LamNo might not be either feasible or a high priority compared to the road south of Calang and Meulaboh connecting the west coast to North Sumatra via Tapak tuan.   Reopening the airfield at Meulaboh becomes especially important under these conditions.

With the loss of it’s barrier island location, the new UleLhee ferry port is probably not worth rebuilding, he said, but the port at Krueng Raya (Malahayati) east of Banda Aceh must be rebuilt because it includes surviving fuel storage tanks that supply fuel for electricity production in Banda Aceh and parts of Aceh Besar.

According to Harker , the towns of Bireun and Lhokseumawe are natural market centers and, with thoughtful investment, Lhokseumawe’s port may provide an Acehnese alternative to Belawan in North Sumatra for export of Aceh-grown and processed commodities including rice, soybean, peanut, cinnamon, clove, nutmeg, penang, and arabica coffee.

Lhokseumawe is the location of the liquid natural gas fields operated by ExxonMobil.  The contrast between the corporate enclave and the shabby town is sharp.  With appropriate redevelopment choices, Lhokseumawe and its Malikussaleh University and Polytechnic Institute could become an economic and educational center.  With the proximity of the oil and gas fields and issues of maximizing residual gas and oil yields for support of Acehnese factories and businesses, Malikussaleh might be a good location to develop both petroleum engineering and resource economics centers.

Meanwhile, the faculties and students of leading universities can be productively and gainfully employed in thorough assessments of the Tsunami’s effects to fill the data and knowledge gap which hampers informed redevelopment planning.

What were the population losses and displacements in the various tsunami-affected areas?  What businesses, inventories, shops and jobs have been lost?  Which are likely to be rebuilt and how can they be assisted?  How many teachers, schools, health workers, and clinics were lost and — given the numbers people lost — how many schools and clinics must be rebuilt and staffed? Where?   How many faculty and students of institutions of higher learning have been lost?  What can we learn of the details of lost family and business records:  births, marriages, land titles, bank books, business accounts?   What farmlands was lost; what can be reasonably recovered?   What is the current status of Aceh’s fishing fleets, harbors, and boat yards?  What has become of historical archives; what can be recovered and how?   What communications facilities were lost?  Is this an opportunity to replace much of lost telecommunications with new wireless systems.  Is it time to think again about a hydroelectric plant in the mountains of Central Aceh.

Q:  Aceh’s Government may see this as an opportunity to build the cross-mountain highway from Bireun to Meulaboh?  Is this really a good idea?

A:  This “Gumpang Road” already exists in a primitive form. Its completion is a commitment of several successive governments.  The principal objection to it has been its real effects on forest cover through organized illegal logging and encroachment by lowland farmers.  With the loss of two principal exit points for illegal timber at the ports of Meulaboh and Calang, that threat is ameliorated.  Encroachment continues with or without the road.  Personally, I favor completing this road at this time, though I have advised against it in the past.

Q:  How can we resolve the military-GAM conflict to the prewar situation?

A:  First let me say that the TNI has a great opportunity to improve its image.  It’s playing an essential role in human terms through its relief efforts and in cleaning up after the tsunami.  It can also contribute significantly, and visibly, to some rebuilding of basic economic infrastructure.  However, there has to be a limit to this.  Acehnese contractors and Acehnese labor need to be employed to rebuild Aceh.

I have great respect for the senior officer corps and believe they want to see this conflict resolved and the TNI assist Aceh to recover.  But senior leadership have problems enforcing discipline among junior officers, NCOs and troops in the field that make abuses difficult to stop.  Public evidence of disciplinary measures would be a good beginning to controlling abuses in the field and improving TNI’s public image.

This question could also be asked about the police.

This very sad occasion is also a special opportunity to begin “Acehnizing” the local police force.  This could begin in Banda Aceh and Aceh Besar by doubling the capacity of the Police Training Institute in Aceh Besar to train 4000 new Acehnese police in the next 5 years.  This would bring Acehnese representation to about 50 percent of the current police force.

Aceh’s NGO Community

Aceh’s NGO sector is weak and its development-oriented NGOs with any real experience can probably be counted on one hand.  Absorbing all the well-intended aid from foreign NGOs as well as other funding will be a problem.  There are many respected, powerful and even wealthy Acehnese outside Aceh, in Medan and Jakarta for example.  Through their Acehnese community organizations they are already mobilizing assistance.  Is it possible that with their sponsorship, some established Java-based development NGOs might overcome Aceh resistance to outsiders and partner with Aceh’s NGOs to build their capacity and take greater advantage of aid funds.

Q:  You haven’t spoken about problems with accountability for recovery and development funds.

This isn’t a peculiarly Acehnese problem.  Transparency is at the heart of any solution.  I would hope that some of the major donors will consider working with Acehnese civic leaders, especially at its universities, to create development trust funds.  For example, set aside several million dollars each for Syiah Kuala University, Muhammadiyah University, IAIN Ar-Raniry, and Malikussaleh University.  Donors might also consider establishing an Aceh Development Trust to be used for other projects outside the mainstream of government-led redevelopment.

Accountability can be assured in much the same way any trust fund is managed: with an independent institutional trustee (maybe even off-shore in Penang), a set of formal guidelines for use of the funds, independent audits, and a representative board of Acehnese directors to oversee their use.

luti?o<Pl ?Yw w:st=”on”>East Timor. The two had cooperated on terrorism and piracy. Both were opposed to becoming nuclear states and had cooperated on WMD issues. If anything, the Ambassador thought, cooperation would increase in future.

Ambassador Soemadi also discussed the impact of 9/11 on the region; now “Indonesia is a direct victim” of terrorism, he said.  He went on to discuss the various anti-piracy and maritime security proposals, including those of Japan, including the “complication” of the U.S. backed Proliferation Security Initiative (PSI) with maritime security proposals.  He observed that Indonesia and Japan agree on strengthening the NPT non-proliferation regime and the “fulfillment” of the Comprehensive Test Ban Treaty (CTBT).  But he also worried about the consistency of the PSI with the NPT and other international agreements.

Another area in which Japan and Indonesia agree, he continued, is the denuclearization of North Korea.  Indonesia is ready to help advance the Six Party talks and see the ASEAN Regional Forum (ARF) as a possible supplement to what can be worked out in the Six Party context.  Finally, Ambassador discussed the impact on ASEAN of membership enlargement, raising problems of cohesion and a “developmental gap,” the rise of the ASEAN Plus Three format, and Japan’s limited security role in the region.