Economy and Development

Before 19^th century Aceh was one of the major producing areas of rice, pepper, rubber, and oil palm. In 17^thcentury, and later on 19^th century, Aceh produced to 50% of world pepper production.

By the end of 19^th century economic resource was discovered: crude oil and natural gas which were exploited by British Petroleum Matschapij and later on by Royal Dutch Shell. In 1971, the most substantial oil reserve in Indonesia was discovered in Aceh, and gigantic, sophisticated and integrated LNG (Liquefied Natural Gas) plant was erected in Lhokseumawe. Its current production capacity is 18.8 million metric tons annually. Japan is the major export destination. Other Aceh’s reliable export commodities are rubber, coffee, copra, palm oil and timber.

Abundant coal reserve is available in West Aceh. Other mineral reserves are gold, silver, and gypsum. They have not been fully exploited to date.

An additional item that can be entered in the list of Aceh’s potentials to be developed in the future is tourism due to the fact that Aceh is rich of untouchable natural beauties and cultures. In view of its exceptional geographical location, Aceh could be made an attractive point of destination for foreign tourists in the future.

The majority of aceh people, or 80%, are farmers. Rice fields, unirrigated agricultural fields, and plantations have become their main sources of income. A great number of them also earn their living as fishermen. The most reliable sources of foreign exchange contributed by small holders are coffee and palm oil. In the past, rubber played a significant role. However, its contribution to the country’s economy is decreasing as the results of the declining world market prices of this commodity. The people are no longer interested in developing rubber plantations.