A ripple in development? - Channel Research

the tsunami affected areas. The Aceh economic structure, for example,
is dominated by oil and gas exports. Agriculture, in which people are
currently engaged the most, apart from fisheries, contribute very little to
exports. Within agriculture, coffee, which mostly is from non tsunami
affected area, is the highest contributor to exports. The link to the general
development of the entire region remains a challenge that still
requires serious attention in the planning of bodies such as the MDF, or
multilateral lending institutions.
Over 2004–09 (there was indeed aid given in 2004), there has been
an improved roll out of aid with a greater geographical coverage across
Aceh province. More importantly, as consistent with the wishes of the
Government of Indonesia, funding is increasingly via on-budget support
instead of being off-budget, leading to better livelihood prevention
strategies and larger national development strategies which are consistent
with meeting the principles of the Paris Declaration and reinforced
at the Accra High Level Forum on Aid Effectiveness. On-budget support
helps to create better strategies in terms of funding being tracked
by BAPPENAS and BAPPEDA to improve planning and budgeting at
central and local levels of government. This is especially important
given the evolution of decentralization laws in the country and related
public expenditure laws such as Law No. 25/2004 on National Development
Planning and Regulation No. 21/2004 on Line Ministry and
Agency Budget Work Plan.
3.3 Macro level support to household livelihoods in Aceh and Nias
While there is availability of foreign aid for economic development, this
has not directly translated into long term job creation or income generating
opportunities for households. As reiterated by BAPPENAS as it
mapped out the blueprint for reconstruction in 2005, the objective of
foreign aid was primarily to build new and rebuild damaged infrastructure
such as roads, ports, markets etc to promote economic development.
This has provided an enabling economic environment for income
generating activities to take place. However there is no evidence that
economic development at the macro level has created at the micro level
a specific number of jobs or new businesses or trades. The lack of evidence
comes from the structural nature of the formerly war ridden
economy where a highly disproportionate percentage of economic
activity occurs in the informal sector.
Once asset replacement has taken place and people have been able
to resume their livelihoods, the government has to step in. Roads, storage
facilities, fish markets and other livelihood supportive infrastructure
have to be developed. Ideally the building or reconstruction of infrastructure
should proceed in parallel to asset replacements, trainings,
and micro-credit schemes in order to facilitate people to rehabilitate
their livelihoods within a more enabling environment. As explained by
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