A Study of the Resource Exploitation and the Conflict in Aceh
Authors:   Asia-Europe Perspective Association, Kim Kwang-Nam 
Published: June 2018

This paper investigates the basic cause of the frightful and prolonged conflict in Aceh, Indonesia, by looking at the history of the country and its petroleum and natural gas resources development.
At the end of the 19th century, the Dutch colonial government began a large-scale military campaign in order to secure oilfields in East Aceh. At that time, the Dutch was interested in not only products such as coffee and spice, but also natural resources including petroleum, rubber, and tin. Thus, the development of natural resources in Aceh fueled the Dutch to expand their colonial territory. During the Japanese military administration period, the Japanese army tried to benefit from Aceh’s natural resources. After the surrender of the Japanese army, an Indonesian independence movement broke out. Also, the conflict escalated over the control of Aceh-North Sumatran oil between the Dutch army and Indonesian nationalists, as well as infighting between Acehnese and Javanese.
After Indonesia became independent, the struggle between the Acehnese local power and the Javanese central government continued over control of the Aceh-North Sumatran oil fields. Rebellions against the Aceh-North Sumatran oil nationalization arose while the U.S. government and the Dutch oil companies monitored the nationalization process. Finally, through the institution of martial law, the Indonesian army took control of economic properties including the Aceh-North Sumatran oil facilities. This action of the Indonesian army was related to the reparation agreement made with the Japanese government. The agreement included provisions that the Japanese government would invest in the Aceh- North Sumatran oil facilities and purchase their oil. Thus, the Japanese market and its capital assistance facilitated the restoration of the Indonesian oil fields and the oil export to Japan. But this did not help meet the Acehnese local society’s needs for petroleum products. The main purpose of the national oil company was just to obtain foreign currency by their crude oil.
During the time of the Suharto administration, the government strongly promoted the centralization of power for both economic development and political stabilization. In Aceh, the central government focused on the development of natural resources, especially natural gas exploitation in North Aceh, and built large-scale industries called the Lokhseumawe Industrial Zone. These industries yielded huge foreign currency for the Jakarta government, but they did not contribute to the local economy. In other words, there was no positive impact on other industries and employment in the local society. Moreover, the government expropriated the local habitants of their vast land without enough compensation for building the industrial zone. Thus, the gap between non-Acehnese workers in the enclave and habitants in the local society rather widened.
This paper concludes that the long and intolerable conflict in Aceh from 1976 to 2005 was due to two main factors. First, the Acehnese were extremely dissatisfied at the Java-centric and unjust policy for economic development. And second, the Acehnese harbored fear and hatred for the brutal national army.