« Back to Accord

Economic and Social Development: MoU between the Government of the Republic of Indonesia and the Free Aceh Movement

Implementations

Economic and Social Development – 2005

Parties worked on Aceh’s law to institutionalize the economic and social provision of the MoU. As of December 2005, the parties had the draft law ready. It was expected that the Indonesian government would submit the draft law to the parliament for its approval.¹ In terms of ensuring post-conflict rebuilding, the GAM had its representatives in BRR, which was responsible for post-tsunami economic reconstruction.²

“Controversy over drafting of constitution for Indonesia’ Aceh continues,” BBC Monitoring Asia Pacific, December 22, 2005.
“Peace in Aceh one year after tsunami, unrest persists in Sri Lanka,” Agence France Presse, December 21, 2005.

Economic and Social Development – 2006

The draft bill was submitted to the parliament in January¹ and the bill was passed by the parliament on 11 June.² As Aceh gained autonomous status through the enactment of the law, Aceh had more control over its economy. In this regard, Articles 156 through 162 of the law clearly outlined issues related to natural resources (oil and gas, forestry, fisheries and general mining), their management, and revenue sharing. According to the law, Aceh will have control over 70% of the revenue from the province’s oil and gas production, and receive an extra 2% allocation from the national budget for 20 years of reconstruction. Aceh will have 80% of its revenues from forestry, fisheries and general mining.³

Articles 163 to 166 discuss the trade and investment issues that allow Aceh and its residents to have free trade within the country, organize business associations, conduct business and investment internally and internationally. It includes the Aceh government’s authority to issue various licenses based on nationally applicable norms, standards, procedures and criteria.

The law also provided for the establishment of the Sabang Free Trade and Free Port Zone (Articles 167-170), utilization of the land (Article 172), rebuilding of the economic infrastructure (Articles 172 and 173), and the protection and welfare of workers (Articles 174 to 177). The law also provides reliable revenue for Aceh’s economic and social programs and management of its finances.

“Indonesia submits draft law on Aceh to parliament,” Agence France Presse, January 27, 2006.
“Indonesian media reacts to passing of Aceh governance law,” BBC Monitoring, July 12, 2006.
“Indonesia enacts law on Aceh governance despite dissatisfaction,” Japan Economic Newswire, July 11, 2006.

Economic and Social Development – 2007

With the implementation of the Law in 2006, economic and social provisions of the accord were implemented.