The provincial government of Aceh has sought to attract investors in
earnest since the end of the conflict between the central government and the
Free Aceh Movement (GAM) in 2005. It has had to contend with two fundamental
concerns that potential investors have, of which the most important is
insecurity. Of lesser concern, to me at least, is alleged Islamic
“fundamentalism” there.
Aceh
governor and former separatist Zaini Abdullah sought to reassure potential
investors at last month’s Go West! conference in Jakarta. Concerns about
insecurity were said to be “baseless.” And referring to Aceh’s codification of
Shariah law for Muslims and non-Muslims alike, Abdullah said Shariah “applies
only to Muslims. For non-Muslims, there is no obligation at all to comply.”
Both
statements are disingenuous. Let’s begin with the latter. In December Governor
Abdullah signed into law a Qanun Jinayat or behavioral bylaw that requires non-Muslims
to follow Shariah. This means, for example, that non-Muslim women must wear
headscarves; three warnings and then they’ll be caned.
Regarding
“baseless” security concerns; ahead of the April 9 legislative elections, the
Commission for Missing Persons and Victims of Violence (Kontras) counted 48
cases of election-related violence from January to March, including murder.
Much of the violence occurred between two local parties: the Aceh Party (PA,
Abdullah’s party) and the Aceh National Party (PNA). PA deems itself GAM’s only
legitimate political successor. PNA contests this claim: it was founded by GAM
veteran and ex-Governor Irwandi Yusuf.
Despite
this violence, the 2014 election was an improvement on Aceh’s 2012
gubernatorial election, which pitted the incumbent Irwandi against Abdullah.
The 2012 election also illustrates PA’s way of “doing business.” Irwandi was
elected as an independent in 2006; he was immensely popular due to his
universal health care provision and his perceived incorruptibility. PA didn’t
wish to compete against him and sought to disallow his candidacy, and when that
failed, it boycotted the election registration. The deadline passed: it
demanded to be allowed to register again, and PA insinuated that it would
“return to the past” if not allowed to re-register — i.e., that war would
resume. It was allowed to register.
The
number of killings, grenade attacks, and other violent incidents carried out by
PA supporters in the months preceding the election correlated with the shift in
public support from Irwandi to PA. In conversations with dozens of friends I
once worked with in Aceh, nearly all voted for PA, not out of a legitimate
desire to do so, but out of fear. Abdullah unseated Irwandi, who was actually
assaulted at Abdullah’s inauguration. To label an election result based on such
pervasive intimidation “free and fair,” as many observers did, is a farce. As
was much of the 2014 election in rural eastern Aceh, where friends of mine
described PA standing in the voting booths, to ensure people voted correctly.
In
fairness to Governor Abdullah, election violence is targeted. But let’s
consider the macro aspects of Aceh’s post-conflict security environment and its
impact on the investment climate.
The end
of the conflict did not mean the end of insurgent funding streams: GAM was
rebranded as the Aceh Transition Committee (KPA), and KPA’s local
manifestations generally continued to do what they’d always done: levy parallel
taxes. This is often referred to in non-conflict contexts as organized crime.
GAM’s
successor bodies could not provide for their grassroots in the way that their
grassroots could provide for themselves during the war, when extortion and
other crimes were “justifiable.” This isn’t to say that all GAM member were
criminals; many fought for legitimate reasons. But insurgents need funds, and
they are generally excluded from licit opportunities.
KPA
channeled cash payments to combatants and communities. But it wasn’t enough.
The rural Aceh economy couldn’t absorb this excess labor; many veterans simply
couldn’t find decent work. And for ex-combatants, the jobs had to be better
than what existed before. People weren’t going to return to working on land
they don’t even own. And so crime remained a livelihood.
Meanwhile,
GAM “taxed” everything it could — post-tsunami construction and other projects,
small businesses, even ordinary households. I witnessed all this, in Aceh
Utara, Pidie, Bireuen, and other parts of the GAM heartland where I worked. My
teams were carjacked; we had to shut projects to dig wells, build markets and
repair irrigation because of the constant threats and demands. Extortion
occurred from the largest construction projects in the province all the way
down to my mechanic neighbor in Lhokseumawe who was still paying illegal levies
to the same people he was paying before the conflict ended. These are only a
few aspects of a climate of insecurity that continues to the present day.
Some
projects were meant to provide opportunities for ex-combatants: through jobs,
grants, training opportunities. I managed a few of them as well. The trainings
to individuals tended to work. Some of the secondments to existing small
businesses led to jobs. But these only worked in the towns. Many businesses
failed. So did the cooperatives in the hinterlands. The rural economy couldn’t
absorb these entities either. And for a hard core of these veterans — the 10
percent or so who threatened, assaulted, even ‘taxed’ other participants — nine
years after the peace, if you ask them what their job is, they say “GAM.”
Reintegration
worked for GAM elites; the province is theirs. Corruption is pervasive, and
contracts are a currency in themselves. Reintegration has not worked at the
grassroots; many ex-GAM members are still committing crimes for lack of other
opportunities. Every potential investment is viewed as extortable by select
veterans and provincial officials, from the governor’s office to the smallest
hamlet. This underscores why Aceh often only manages to attract “enclave
investments” involving natural resource extraction: metals, timber, palm oil,
with profits leaving the province rather than being reinvested. These
opportunities provide next-to-nothing for local people, and this was one of the
core grievances articulated by GAM to justify its rebellion.
For
those who are content to extort, there’s no law to stop them. This is the key
paradox: reintegration only works with the simultaneous re-establishment of law
enforcement. But GAM’s successors couldn’t allow for adequate policing of their
rank-and-file because it interferes with the income streams of the people they
need support from, and they can’t provide alternatives.
Governor
Abdullah and the Aceh Regional Investment Coordinating Board’s solution to the
lack of rule of law and contract enforceability that inhibits investment in
Aceh is to re-brand the province as a tourist destination, and through this,
they hope to attract Rp 5 trillion ($435 million) in investment in financial
year 2014. At the same time, tourists choosing to wear beach attire could
theoretically be caned.
The
provincial government needs investment to provide opportunity as well as
alternatives to crime. But it can’t attract investment without establishing the
rule of law. Aceh’s current rulers want the former and need the latter. But
they can’t have both, so instead of making hard policy decisions to attract and
protect the investments that Aceh needs, they simply pretend. The due diligence
performed by any potential investor would quickly uncover these false claims.
And so trust — the key ingredient in any investment — is violated, before it
even begins.
Bobby
Anderson works on health, education and governance projects in Eastern
Indonesia.
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