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6 The economic developmenT of Aceh since 1945 Manfred Rist How is it that a resource-rich country like Indonesia is so poor? What is the reason why a province like Aceh, with its wealth of oil and gas reserves, which produces and exports a large part of the resources of the whole country, is so bitterly poor? What is the explanation for the fact that a province, which once had a flourishing trade with the outside world, nowadays has disappeared from the scene economically? Finally, why is it that a strictly religious province like Aceh, which initially actively supported the war of independence in Indonesia and which — unlike Timor — had been part of Indonesia since the beginning, later should become embroiled in one of the bloodiest and most persistent underground wars? These subjects are all interrelated.They indicate a paradoxical development in a nation which nowadays poses yet another complex question: Why should a country so rich in oil and who is a member of OPEC be suffering so badly from the rise in oil prices? The answers to all these questions can be found in the tragic effects that have resulted from the intertwining of economics and politics, the vicious circle of poverty, violence and counter-violence. Economic policy and mismanagement have played an important part. The Jakarta-designed New Order policy reaped disorder, which first affected the outlying areas of the country and then later, Java. Even today, the country is still suffering from its after-effects. Given the circumstances, it appears that, throughout the implementation of the New Order policy from 1965 to 1998, the mental 100 Manfred Rist distance between Banda Aceh and Jakarta seemed to be even greater than the enormous geographical distance of 1,700 kilometres. The civil war in Aceh, which now — after the signing of the peace agreement — will hopefully come to an end, may be one of the reasons for the severe underdevelopment of this province. Violence, terror and insecurity do not just deter foreign investors; these factors also paralyse the domestic market. They tie up and block resources, including human resources, which could otherwise have been applied to the development of a great variety of economic networks; these could be either formal sectors, or — as is widespread in underdeveloped countries — informal ones, which are just as essential. However, to declare the civil war to be the one and only explanation for the lack of development in Aceh is far too simplistic. The absence of war in itself — implying relative order or peace, in fact — is by no means a guarantee of economic progress. Compared with other countries in this region, like Vietnam or Cambodia, Indonesia can look back on decades of peace, at least until 1965. Undeniably, again between 1970 and 1996, the country underwent rapid economic development, which opened up opportunities in domestic fields. Nevertheless, this giant nation is still — and again — considered to be a developing nation. And, it is considered to be poor. Just before the outbreak of the Asian economic crisis, in the mid-1990s, approximately 15 per cent of the population was living below the poverty level. The situation can be compared with that in the Philippines. However, in the Philippines the process has been even more dramatic. This once rich and promising Asian nation with a relatively highly educated populace has degenerated into a chaotic state, whose average income per head has fallen under the ASEAN mean value. This suggests another perspective from which to view the situation in Aceh. Are the reasons for the conflict in Aceh possibly mere economic ones? Could it be that lurking behind the call for independence and freedom is simply the desire for economic development and wealth, which has been beckoning seductively since the exploration of Aceh’s oil resources at the beginning of the 1970s? Although religious and political motives can readily be put forward to explain the conflict, economic considerations — as will be shown later — should certainly not be ignored. Various authors such as Shari (2002) and McCulloch (2000) have come up with the same hypothesis. Even quotations from Hasan di Tiro (1984) point in that direction. At any rate, it is conspicuous that, as early as the rebellion of 1953, economic reasons have played an important part in stirring up discontent. In this context, it is remarkable that the formation of Gerakan Aceh Merdeka (GAM) in 1976 occurred after the exploitation of fossil fuels, and so the armed resistance [3.14.6.194] Project...

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