Policy Briefs Opportunities for Sustainable Economic Development in Nanggroe Aceh Darussalam 1 No. 9 - 2009
Objective This note is one of several inputs for preparation of a long term economic development strategy in Nanggroe Aceh Darussalam (NAD or Aceh). It is based on the rationale that the future of Aceh’s economy will be strongly influenced by how well the province manages its environment. The emphasis is on developing existing and new sustainable industries while improving the management of the province’s environmental services and natural resources.
Key Environmental Issues for Sustainable Development The long-term development of NAD will depend on the sustainable use of the province’s endowed resources. The primary industries that will underpin the development of the economy involve the natural resources sectors. However, the development of the economy based on sustainable use of resources will be difficult as the province lacks much of the basic infrastructure and human capital and management capacity needed to support its development. There will be temptation to quickly exploit many of the province’s natural resources in order to maintain the development momentum in the economy that has occurred since the tsunami. The major challenge for the provincial government will be how to ensure current development practices are improved while strategic
infrastructure is built to develop a more sustainable economy for the future. Much of the hard and soft infrastructure currently developed or being replaced in Aceh is supporting the reconstruction, aid and security efforts to rebuild the economy. However, for the province to develop new industries and investment based on the sustainable use of the region’s natural resources, the strategic infrastructure in the form of governance, human capital, international business, investments and trade networks, technology, and research and development needed to achieve this, does not exist, and will take many years to build.
Since the tsunami, the government has taken up this challenge through several measures. The reconstruction includes a number of projects to establish land rights, protect the environmental services provided by Aceh’s rich forests, rehabilitate degraded coastal areas, revitalize agriculture and agro-forestry, and improve waste management. The first democratically-elected governor has set forth a Green Vision for Aceh’s development and implemented concrete steps such as a logging moratorium, restructuring the forestry sector and hiring thousands of forest guardians.
New Opportunities for Sustainable Growth In formulating a strategy for the sustainable economic development of Aceh, a number of significant opportunities to capitalize on the province’s endowed resources and ensure greater self-sufficiency and growth of the domestic and export economies have been identified (see Table 1). These opportunities, if realized, have the potential to create new niche and specialized markets for the province. However, Aceh will continue to struggle in the development of its traditional agricultural and fisheries industries until better strategic infrastructure is developed and new cultivation and farming technologies introduced.
Sector
Realizing many of these opportunities will require long-term international assistance, investors and research for development partnerships, along with the creation of a new learning and business environment and culture for the province.
Sectoral Recommendations A range of recommendations were developed for key natural resource sectors (agriculture, fisheries and forestry), land and water management and spatial planning. Some highlights are summarized in Table 2: Area Natural resources
s !GRICULTURE SECURE STABLE ACCESS to water, markets & technology s !GRICULTURE FOCUS ON EXPORT CROPS with competitive advantage (coffee, cocoa, palm oil, rubber) produced with strict environmental standards s &ISHERIES CAPITAL AND CREDIT FOR ports, boats, hatcheries and pond development s &ISHERIES COMBINE WITH FISH resource management & marine habitat protection s &ORESTRY DEVELOP MARKETS FOR sustainable timber, non-timber forest products, ecotourism, & carbon s &ORESTRY INVEST IN COMMUNITY development, forest zoning & land management
,AND AND 7ATER
s 0REPARE WATER CATCHMENT management plans for main river systems s $EVELOP AND IMPLEMENT COASTAL zone management planning s )NTEGRATE WATER INVESTMENTS FOR irrigation, mini-hydro, fisheries & water supply s $OCUMENT AND ENHANCE traditional land use and management practices s #REATE AN ENVIRONMENTAL management agency to consolidate functions s %STABLISH ,AND %NVIRONMENT Court and local land tribunals
Table 1: Industries with Sustainable Development Potential
Energy
Biofuel energy, geothermal and hydroelectric power; carbon trading
Food Production
Irrigated rice, horticulture and tropical fruit production; tropical cattle grazing; poultry production; herb and spice production
Non-Food Production Cut flowers, biofuel production; non-timber medicinal/ pharmaceuticals/cosmetics Conservation/ Forestry
Mangrove forestation; farm forestry, plant nurseries; carbon (REDD)
Fisheries
Deep water mariculture; aquaculture
Tourism
Ecotourism, business and education tourism
Table 2: Key Recommendation
Area Spatial Planning
Table 2: Key Recommendation s )MPROVE DATA VALIDITY ACCURACY and comprehensiveness s 2EALISTICALLY CONSIDER RESOURCE limitations when preparing plans s 3TRENGTHEN LINKS TO DEVELOPMENT planning and budgeting process s 0ROMOTE PARTICIPATION inclusiveness and awareness in planning process
General Recommendations and Next Steps
s 4HE 7ORLD "ANK CONTINUE TO EMPHASIZE SUSTAINABILITY in its dialogue with the Governor’s Economic Development Advisory Group and other consultative bodies; s 4HE 7ORLD "ANK ASSIST THE PROVINCIAL GOVERNMENT WITH high-priority analysis on issues of environmental management of minerals and energy exploration; and s 4HE !CEH &OREST AND %NVIRONMENT 0ROJECT USE THE analysis behind this Policy Brief as a key resource for supporting the development of the Governor’s Green Vision. For More Information “Environmental Management for a Sustainable Economic Development Strategy for Nanggroe Aceh Darussalam,� Policy Briefs prepared by CSIRO Sustainable Ecosystems for 7ORLD "ANK 4HE FULL REPORT CAN BE OBTAINED AT )$)3 7ORLD "ANK *AKARTA HTTP GO WORLDBANK ORG )) /0
Moving forward with these recommendations will require significant support. The highest priority for capacity building is in land management, due to the many issues This Policy Brief is available for download at: associated with security of tenure and land use planning. www.dsfindonesia.org Environment and water management are issues of growing importance, especially water quality and flood control. The 1 This Policy Brief is based on work done by CSIRO Sustainable Ecosystems through the need for increased capital investment is high for all sectors, “Mainstreaming Environment in Aceh and Nias� initiative supported by DANIDA and AS IS INVESTMENT IN HUMAN CAPITAL 7HILE INFRASTRUCTURE IS MANAGED BY THE 7ORLD "ANK important for provincial development, the priority is less on the need for new facilities than on the maintenance, repair and upgrading of existing infrastructure. The priority would be on repair and upgrading of local and feeder roads. In the private sector, additional analysis and support is needed for strengthening supply chain linkages to the service sectors. The analysis summarized in this Policy Brief are intended as inputs to the policies, plans and programs in support of sustainable development in Aceh. These include: a) the Governor’s emerging Green Economic Development and Investment Strategy (Green Vision); b) the provincial and kabupaten-level spatial development plans; c) the proposed restructuring of the forestry sector; d) the 2010-2014 medium-term development plan; and e) the handover of reconstruction coordination from the Aceh Recovery Agency (BRR) to the provincial government in mid-2009. To facilitate this process, it is recommended that:
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