resourcesrebellion aceh -michael ross

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Resources and Rebellion in Indonesia

Prof. Michael L. RossDepartment of Political Science

4289 Bunche Hall, [email protected]

March 29, 2002

Prepared for the Yale-World Bank project on The Economics of Political Violence.Draft for comments only; please do cite without the authors permission. Comments arewelcome.


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Introduction

Indonesia is a large, poor, resource-abundant country with a history of violent conflict. It

should be no surprise that it suffered from a civil war in 1990-91 and another beginning

in 1999. But why did Indonesias civil wars break out where they did in the

westernmost province of Aceh? And why did they break out when they did?

To answer these questions this paper focuses on the rise of Acehs rebel

organization, known by the popular acronym GAM (Gerakan Aceh Merdeka, Aceh

Freedom Movement).1

GAM has had three incarnations: the first in 1976-79, when it

was small and ill-equipped, and was easily suppressed by the military; the second in

1989-91, when it was larger, better trained and better equipped, and was only eradicated

through harsh security measures; and the third beginning in 1999, when it became larger

and better funded than ever before, challenging the Indonesian governments control of

the province [Table 1]. This paper seeks to explain why GAM arose at each of these

times, and why it has steadily grown larger and more powerful.

Although Indonesia has frequently suffered from violent conflict, the civil wars in

Aceh have been the countrys only civil wars since 1960, if the standard definition of

civil wars is applied.2

A civil war is generally defined as an internal conflict between a

government and a rebel group that produces at least 1000 combat-related deaths within a

twelve-month period, in which each party suffers at least five percent of these casualties.

A government-sponsored slaughter in 1965-66 killed between 100,000 and one million

1 For clarity I always refer to the organization as GAM, even though it now formally callsitself the Aceh Sumatra National Liberation Front, and refers to its army as AGAM(Angkatan Gerakan Aceh Merdeka).2 A civil war is generally defined as an internal conflict between a government and arebel group that produces at least 1000 combat-related deaths over some period of time,in which each party suffers at least five percent of these casualties.

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people, but this was a one-sided massacre in which government forces suffered few

casualties, and the victims were civilians, not a rebel army. The Indonesian government

invaded the Portuguese colony of East Timor in 1975, killing perhaps 200,000 people

over the next several years. Since this was an invasion of foreign territory, however, it

cannot be classified as an internal conflict.3

In 1999-2000, there were bloody clashes

between Christians and Muslims in Indonesias Molucca Islands; these too do not qualify

as a civil war, since the parties fought each other, not the government. Only the conflicts

between the Indonesian government and GAM which resulted in over a thousand

deaths in 1990, 1991, 2000, 2001, and possibly several other years qualify as a civil

war.

This case study has several themes. The first is that the civil war in Aceh can be

largely explained by the central insights of Collier and Hoeffler [2001], which explores

the determinants of civil wars. The Collier-Hoeffler model emphasizes that to

successfully challenge the state, a rebel group must be able to finance itself; and that to

obtain financing rebels commonly turn to a countrys overseas communities (i.e.,

diasporas), the extortion of primary commodity producers, and to other governments

hostile to their own. It also posits that raising a rebel army will be easier when poverty

rates are high; when the country has suffered from recent conflict; when the population is

ethnically and religiously homogeneous; and when the terrain is mountainous, so that

rebels can hide from government forces. Most of these dynamics are illustrated in the

case of Indonesia. I also show how a more fine-grained analysis one that applies the

3 For example, the German invasion of Poland in 1938 a country that was, like EastTimor, temporarily annexed by its conqueror could hardly be classified as German civilwar.

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Collier-Hoeffler model not just to a country, but to a specific region inside a country

helps illustrate its explanatory power.

The second theme is that to provide a more complete explanation of Indonesias

civil wars, it is useful to include two additional factors: the entrepreneurship of GAMs

founder, the charismatic Hasan di Tiro; and public opinion in Aceh, which made ordinary

citizens more or less likely to support GAM. Funding plays an important role in

explaining GAMs inability to launch a civil war in 1976-79, and its success in triggering

a civil war in 1989-91; but it cannot explain GAMs successful re-emergence, and the

new civil war, since 1999.

The third theme is that even though Acehs abundance of primary commodities

had an important influence on the civil war as Collier and Hoeffler predict it occurred

through different causal mechanisms than the one they suggest. Collier and Hoeffler

suggest that commodity-rich states are more likely to suffer from civil wars because

commodities are exceptionally vulnerable to predation or extortion by rebel groups. If

they are correct, we should observe rebel organizations extorting money from the

commodity sectorbefore a conflict begins; if resource predation only occurs after the

conflict has started, it cannot be a cause of the conflict. I find that even though Aceh was

highly dependent on primary commodity exports, little if any such extortion took place

until after the civil war had started. I suggest that Acehs resource sector contributed to

the onset of the war through three entirely different mechanisms: by creating grievances

over the distribution of resource revenues; by introducing a larger and more aggressive

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military presence into the province; and possibly by making the governments offer of

regional autonomy less credible.4

This paper has four sections and a brief conclusion. The first examines the rise

and fall of GAM between 1976 and 1979; the second, GAMs rise and fall between 1989

and 1991; and the third, GAMs return and growth between 1999 and 2002. Each of

these sections looks at the factors that influenced the risk of civil war in Indonesia as a

whole, and Aceh as a region, on the eve of GAMs incarnation; and describes GAMs

organization, funding, strategies, activities, and the governments response. The fourth

section examines in greater detail how Acehs natural resource wealth influenced the

conflict.

1.1 Conflict Risk in Indonesia, 1976

According to Collier and Hoeffler [2001], the risk of civil war tends to be influenced by

six types of factors: ethnic, geographical, economic, political, historical, and

demographic. In 1976, Indonesia faced a relatively high risk of civil war due to all but

the final factor.

Indonesias ethnic composition had and still has both positive and negative

implications for its risk of civil war. It is among the most ethnically diverse countries in

the world, home to perhaps 300 distinct language groups; in at least some instances, this

extraordinary level of diversity has probably reduced the risk of civil war by making it

more difficult for aggrieved groups to form large alliances against the state. In West

Papua, for example, members of the longstanding pro-separatist organization Organisasi

4I develop and illustrate the claim that natural resources can influence civil wars in

different ways in Ross 2001 and Ross 2002.

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Papua Merdeka have had difficulty forming a united front, due to animosity among the

provinces tribes.

Indonesias ethnic composition poses a civil war risk, however, due to a different

factor: the dominance of the largest ethnic group, the Javanese. Collier and Hoeffler

[2001] find that when a countrys largest ethnic group comprises between 45 and 90

percent of the population, the risk of a civil war is heightened. In 1976, the ethnic

Javanese constituted 45 percent of the population; the Sundanese, who also live on the

island of Java and are sometimes grouped with the Javanese, constituted another 15

percent of the population. Whether they are treated as 45 percent or 60 percent of the

population, the size of this group has often contributed to antagonism with Indonesias

non-Javanese peoples. Non-Javanese tend to see Indonesias government and military as

Javanese-controlled; people in the resource-rich provinces particularly in Aceh, as

illustrated below commonly complain that their natural wealth is being stolen by the

Javanese.

Viewed along religious lines, Indonesia suffers from a second type of ethnic

dominance: close to 90 percent of the population is Muslim. In Indonesias

predominantly non-Muslim areas East Timor, Nusa Tenggara, and West Papua this

has at times produced a profound fear of Muslim supremacy. Although Indonesia is not

an Islamic state, and Indonesias governments have generally supported the religious

rights of minorities, the rebellions in East Timor and West Papua have both been partly

motivated by a fear of Muslim dominance.

Indonesias economic status in the mid-1970s also produced a significant conflict

risk. Indonesia is a low-income country, and per capita in 1976 was just $395 (in

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constant 1995 dollars) [World Bank 2001]. Moreover, in 1976 Indonesia was highly

dependent on the export of natural resources, with a resource export-to-GDP ratio of .194

thanks to a boom in both oil and timber exports in the early 1970s.5

Together these

factors produced a profound danger of conflict.

At the same time, there were several economic factors that mitigated this risk.

Economic growth was steady and high, averaging 7.8 percent from 1970 to 1979 and

never falling below six percent. Income inequality has been, and remains, relatively low:

the gini coefficient was 34.6 relatively favorable for a low-income country. A 1987

survey found that the poorest twenty percent of households had 8.8 percent of national

income more than all but one low-income state and two lower-middle-income states for

which data were available [World Bank 1992].6

There were also two political risk factors. Indonesia was under authoritarian rule,

and governed by President Suharto, a former military officer who used a combination of

repression and patronage to maintain stability; and the judiciary had little political

independence, and was highly corrupt. It is difficult to know whether the Suharto

government was widely viewed at the time as legitimate. On one hand, in the mid-

1970s Indonesians may have appreciated the high economic growth and political stability

of the Suharto era, compared with the hyperinflation, economic hardships, and political

chaos of the 1962-66 period that preceded his rule; on the other hand, there were violent

protests in Jakarta in 1974, which the government contended were part of a plot to

overthrow the regime.

5 The resource export-to-GDP figures, and all other economic data, are derived from datain World Bank 2001 unless otherwise specified.6

These figures are from a 1987 survey.

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In 1976 Indonesia also suffered from a recent history of violent conflict, although

the conflict is usually not coded by scholars as part of a civil war. In 1965-66, between

100,000 and 1 million Indonesians were killed by the military, and citizen groups

supported by the military, as part of an effort to eradicate the influence of the Indonesian

Communist Party (PKI). The slaughter was touched off by a coup and counter-coup that

eventually toppled President Sukarno, and replaced him with Major General Suharto.

Because these killings took the form of a massacre of mostly-unarmed civilians, rather

than a war between a rebel army and a government, scholars generally do not treat this

event as a civil war. Still, if a recent prior conflict raises the danger of a future conflict

by producing unresolved grievances [Collier, Hoeffler, and Sderbom 2001], the 1965-66

slaughter may have heightened the risk of subsequent conflict.

Finally, a single factor demographic factor may have reduced Indonesias civil

war risk. Collier and Hoeffler [2001] find that states with large diasporas are more likely

to have civil wars, since diasporas can provide funding to rebel groups in their native

countries. Although most adjacent countries provide no data on Indonesian migrants,

relatively few Indonesians appear to live in foreign countries; when Indonesians migrate

they commonly migrate to other islands within the archipelago, not to other countries.

The largest populations of overseas Indonesians are almost certainly found in Malaysia,

Singapore, and Thailand. None of these states publish data on the size of their migrant

populations. The 1971 census of Australia which has long attracted migrants from

Europe and Asia found that fewer than 8,000 residents had been born in Indonesia

[Department of Immigration and Multicultural Affairs 2001].

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In sum, Indonesias risk of civil war in the mid-1970s was relatively high, due to

poverty, resource dependence, authoritarian rule, a recent history of violent conflict, and

the ethnic dominance of the Javanese and Muslim populations. These factors were

partially offset, however, by high growth, relatively low levels of income inequality, a

high level of ethnic diversity, and a lack of overseas migration.

1.2 Conflict Risk in Aceh, 1976

While Indonesias 1976 conflict risk was high, it was not equally high across the

countrys twenty-six provinces and 13,000 islands. Within Indonesia, the conflict risk

was atypically high in the westernmost province of Aceh, due to its ethnic homogeneity,

terrain, politics, history of conflict, dependence on natural resources, and diaspora. The

conflict risk was reduced, however, by the provinces low poverty levels.

Even though Indonesia as a whole is ethnically diverse a factor that may reduce

the risk of civil war Aceh is relatively homogeneous. Virtually all of Acehs 2.26

million people in 1976 were Muslim. While 21 percent belonged to ethnic minority

groups including the Gayonese (ten percent), the Tamiang Malays (nine percent), and

the Alas (two percent) these groups posed no obstacles to the formation of a separatist

movement[Central Bureau of Statistics 1971; King and Rasjid, 1988]. Indeed, the

largest minority group, the Gayonese, would eventually join the Acehnese separatists in

attacking Javanese settlers [Tempo 2001b]. 7

7 While ethnic dominance matters at the national level by creating grievances amongminority groups, it is hard to see how it would increase the risk of civil warwithin arestive province, when the province itself is largely poplated by an ethnic minorty. Ihence do not consider it here as a risk factor.

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Acehs geography is also a risk factor: 53 percent of the land is classified as

steep, having more than 25 percent slope, and an additional 36 percent is very steep,

with more than 45 percent slope [Dawood and Sjafrizal 1989]. The mountainous terrain

is can help provide a safe haven for a guerrilla army that is outnumbered by government

forces.

In general, Acehs economy did not pose any special risk.8 According to a

national survey in 1971, Acehs per capita GDP was 97 percent of the national average

(without oil or gas). Between 1971 and 1975 Acehs real annual growth rate averaged

5.2 percent below the national average but still robust [Hill and Weidemann 1989].

Although there is no reliable information on inequality in Aceh in the mid-1970s,

there is substantial evidence that poverty rates were unusually low, due in part to a large

surplus of rice, the staple food crop. Measured in 1980, just 1.8 percent of the rural

population, and 1.7 percent of the urban population, was below the poverty line among

the lowest rates in the country. Health care standards were also relatively high, and

improved substantially during the 1970s: in 1969, infant mortality rates were 131 per

1000 slightly below the national rate of 141 per 1000. By 1977 Acehs rates had

dropped to 91 per 1000, while national rates improved to 108 per 1000. Life expectancy

was also better than national average, and improved sharply between 1969 and 1977 [Hill

and Weidemann 1989].

8Economic figures for Aceh must be treated with care, since the boom in natural gas

production which began in 1977 produced quickly-rising figures for the provincesGDP, even though the vast majority of this revenue accrued to the central governmentand was spent in other provinces. For this reason, I prefer to use figures that subtract outthe value of oil and gas production.

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Although the province became a major exporter of natural gas and related

products beginning in 1977, in 1976 the economy was still heavily agricultural.9 A 1976

survey found that agriculture accounted for 52.2 percent of the Acehs GDP, services

accounted for 30.7 percent, and mining, manufacturing, utilities and construction

accounted for 17.1 percent. The distribution of the labor force reflected these figures:

71.1 of the working population was in the agricultural sector, 20.3 percent in services,

and just 8.6 in mining, manufacturing, utilities and construction [Hill and Weidemann

1989]. Compared to the country as a whole, Aceh had roughly the same income levels;

but it was more agricultural, healthier, and had less poverty.

Even though Aceh dwelt under the same authoritarian government as the rest of

Indonesia, the Suharto government had less legitimacy in Aceh, which made politics an

atypically grave risk factor. There were several reasons why many Acehnese disliked the

Suharto government. One was the breadth of support for Acehnese political autonomy,

which was opposed by the Suharto regime. The desire for autonomy reflected Acehs

long history as an independent sultanate, one that was subjected to Dutch colonial rule

only after thirty years of brutal warfare (1873-1903). The demand for greater autonomy

but this time, as a member of an Indonesian federation surfaced again during a 1953-

62 rebellion led by Teungku Daud Beureueh. Importantly, the rebellion did notcall for

Acehnese independence, but rather, greater local autonomy and a stronger role for Islam

in the national government.10 After several years of negotiations, the rebellion ended

9There are no figures from this period about the provinces resource exports per se.

10 The Aceh rebellion declared itself part of the Darul Islam rebellion, which began inWest Java in 1947. For this reason it is sometimes referred to as the Darul Islamrebellion; I refer to it here as the Daud Beureueh rebellion to distinguish it from theJavanese movement.

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when the government granted Aceh status as aDaerah Istimewa (Special Region) with

autonomy over religious, cultural, and educational affairs; military authorities also

recognized the validity of Islamic law in Aceh.11

But in 1968, after the Suharto

government came to power, the Acehnese governments special autonomy was

effectively revoked.

The Acehnese peoples disillusionment with the central government was reflected

in the national elections of 1971 and 1977. The Suharto regime used myriad forms of

coercion to produce a large majority at the national level for its own party (known as

Golkar); but in Aceh a rival, Muslim-oriented party (the Development Unity Party, or

PPP) enjoyed unique popularity. In 1971, Golkar won 49.7 of Acehs votes, versus 48.9

percent for PPP; in 1977 Golkar won just 41.0 percent of the vote, while the PPP won

57.5 percent 12 [King and Rasjid 1988]. In 1977, Aceh was one of just two provinces (the

other being Jakarta) that did not give Golkar at least a plurality.

It is unclear whether the Acehnese people had experienced more violence in the

recent past than typical Indonesians. The province suffered from low levels of violence

during the 1953-62 rebellion; and during the events of 1965-66, there were relatively few

communists in Aceh perhaps several thousand and hence less violence than in other

provinces.13

Finally, there was almost certainly a significant Acehnese diaspora in 1976. Aceh

lies along the Malacca Straits, which has long been a migration route to mainland

Southeast Asia. Although no figures are available from adjacent countries for the 1970s,

11 For a fine account of the Daud Beureueh rebellion, see Sjamsuddin 1984.12 The remaining votes were taken by PDI, which at the time was a minor third party.13

In December 1965 a military commander reported that Aceh had been entirely purgedin a physical sense of PKI elements [Crouch 1978, 143].

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in 1991 an estimated 10,000 Acehnese were living in Malaysia [Vatikiotis 1991].

According to a different observer, in 2001 between 2,000 and 3,000 Acehnese lived in

Malaysia, and an additional 7,000 to 8,000 were in Thailand, Australia, Europe and North

America [Gunaratna 2001].

1.3 The Rise and Fall of GAM I

In the mid-1970s, these elements particularly Acehs political grievances, ethnic

homogeneity, and history of prior conflict contributed to the foundation of GAM, a

separatist rebel movement. So did the entrepreneurial vigor of a single charismatic

leader. During its 1976-79 incarnation, GAM was small and underfinanced, and was

easily suppressed by the government. Still, the brief 1976-79 incarnation of GAM would

contribute to the resurgence of GAM in 1989-91, which in turn led to GAMs return in

1999.

It is hard to imagine the foundation of GAM without the efforts of Hasan

Muhammed di Tiro. Di Tiro came from a prominent Acehnese family in the Acehnese

district of Pidie; he was the grandson of Teungku Chik di Tiro, a renowned hero of

Acehs war against Dutch colonial rule. In the early 1950s di Tiro lived in New York

City and worked at the Indonesian Mission to the United Nations. When the Daud

Beureueh rebellion broke out in 1953 he quit his job and became the movements UN

ambassador. After the rebellion ended, he set up a business consulting firm in the U.S.

Di Tiro secretly returned to Indonesia in early 1976 to build a new guerrilla

movement dedicated to Acehnese independence. He recruited a cadre of young

intellectuals, and at least one former Indonesian military officer, to his cause; attempted

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Lhokseumawe. Exploration by Mobil Oil Indonesia found that the reserves held an

immense quantity of gas enough to generate two to three billion dollars annually in

export revenues over a twenty-to-thirty year period.16

To exploit these reserves, Mobil

Oil entered into a joint venture with Pertamina, the Indonesian oil parastatal, and Jilco, a

Japanese consortium. Production began in 1977 and reached maximum capacity in 1988

[Dawood and Sjafrizal 1989].

There were considerable economic benefits for Aceh from the LNG boom: during

construction, the new facility employed 8,000 to 12,000 people; during the peak years of

production, it employed between 5,000 and 6,000. Since local infrastructure was poor,

Mobil also built new roads, schools, medical facilities, and 4,000 to 5,000 new houses.

Along with the processing facility came several downstream industries, including a

fertilizer plant and a chemicals plant [Dawood and Sjafrizal 1989].

There can be little doubt that the new LNG complex was welcomed in Aceh. The

government initially planned to extract the gas and ship it to North Sumatra an adjacent

province with a more quiescent reputation for processing. After strong Acehnese

protests, they agreed to build the industrial complex in Aceh [Sjamsuddin 1984].

Even though the LNG complex produced undeniable benefits for Acehs

population, it also produced resentments. Locals believed that the project employed too

few Acehnese, and that local firms were unfairly disregarded; Mobil officials suggest

they employed as many Acehnese as they could, but were often forced to rely on

Indonesians from other parts of the country, who had more skills and experience. 17

16 The gas field proved to be about fifty percent larger than initially estimated, holdingperhaps 20-21 trillion cubic feet of gas.17

Interview with anonymous former Mobil employee, May 3, 2000.

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Hasan di Tiro was personally familiar with these resentments: in 1974, he himself had

lost out on a bid to build one of the pipelines to Bechtel, a U.S. firm [Robinson 1998].

GAMs official position was that it did notoppose Mobil Oil, or the LNG facility

itself, or even foreign investment; but it did object to the payment of royalties to the

central government. According to di Tiro, our country has been laid bare by the

Javanese colonialists at the feet of multinationals to be raped. Our mineral and forest

resources have been put up to the world markets for clearance sale for quick cash for the

Javanese generals and their foreign backers [di Tiro 1984].

In its 1976-79 incarnation, GAM was small and engaged in few military

activities.18

It never controlled any territory, and it was forced to move on as soon as its

presence was discovered by the Indonesian army. Estimates of its active membership

range from two dozen to two hundred; some of its fighters were apparently forced to join

the movement [Sjamsuddin 1984; Hiorth 1986]. Much of GAMs activity consisted of

distributing pamphlets and raising the flag. They possessed only a few old guns and

remnants from World War II, and extorted money from townspeople to support their

efforts.19 At times, di Tiro and his men went for days without food [Sjamsuddin 1984;

Hiorth 1986].

Several of their most significant actions were directed against the LNG facility in

Lhokseumawe. Around 1977, GAM guerrillas stole the facilitys payroll. In December

1977, GAM shot two American workers at the plant, killing one; the shootings occurred

18 According to Hiorth [1986, 192], Fighting has been so limited that the Free Acehmovement perhaps might be called a peaceful protest movement.19 Di Tiro was understandably worried about GAMs lack of armaments. In his diaryentry for February 6, 1977 which he later published he declared Politically we havealready won; the only thing that separates us from victory is the guns [di Tiro 1984].The absence of guns is frequently mentioned in the diary.

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the Acehnese economy was doing extraordinarily well, which may have undercut GAMs

claims about Acehs impoverishment. It was not a time well-suited to rebellion.


Between 1976 and 1989, Indonesias conflict risk dropped substantially due to rising

income levels, a drop in resource dependence, and possibly a rise in the governments

legitimacy. There were no measurable changes in the countrys recent history of violent

conflict, the size of its diaspora, its ethnic composition or its geography.

Between 1976 and 1989 Indonesia grew at an average rate of 4.5 percent a year;

real per capita GDP rose 76 percent, from $395 to $697 (in constant 1995 dollars).

Natural resource dependence dropped sharply, as the resource-export-to-GDP ratio fell

from .194 to .12, due to an increase in manufactured exports and a fall in oil and gas

prices. Indonesia was still a low-income country, but its high growth rate and vigorous

manufacturing sector had reduced its civil war risk.

Indonesias political system had changed little on the surface: it still had an

authoritarian government, headed by President Suharto. But quick economic growth, and

the Suharto governments wide-ranging patronage institutions, had produced an ever-

larger vote for the government party in national elections. The Golkar party received

62.1 percent of the national vote in 1977, 64.3 percent in 1982, and 73.2 percent in 1987.

As political scientist William Liddle [1988, 180] observed in 1988,

the governments control has never been greater than it is today. The [Suhartogovernment] seems firmly rooted in a combination of authoritarian coercion,skillful political management, and long-term economic success that makes itrelatively impervious to short-term currents of change in its environment.

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This heightened level of political control and rising vote share may have indicated a

higher level of political legitimacy for Suhartos New Order government, and hence a

diminished risk of civil war.

It is difficult to determine whether Indonesia was less afflicted by a history of

recent violence in 1989 than it was in 1976. Certainly the trauma of the 1965-66

massacres had receded further into the past; but this must be weighed against Indonesias

violent takeover of East Timor beginning in 1975. Perhaps 100,000 Timorese died as a

direct or indirect result of the invasion, and East Timor was not opened to visitors until

1988.

Throughout the 1980s, Indonesias migrant workers commonly spilled into

Malaysia, Singapore, and Thailand, though they were often illegal and their numbers

went unrecorded. The Australian census showed a jump in the number of Indonesian-

born residents from 7,981 in 1971 to 32,688 in 1991; but these figures were still quite

small in proportion to Indonesias 1991 population of 183 million.

2.2 Conflict Risk in Aceh, 1989

The conflict risk in Aceh may have also dropped between 1979 and 1989, due to the

regions speedy economic growth, and the governments vigorous efforts to raise its

political legitimacy. Nonetheless, these effects were offset by a rising dependence on

LNG exports, and social tensions created by the LNG boom. For the other factors of

interest ethnic composition, diaspora, and geography there were no measurable

changes.

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The late 1970s and the 1980s were a period of exceptional economic

performance in Aceh. The most prominent trend was the rise in natural gas production,

as the LNG facility approached its maximum capacity. This made the province far more

dependent on natural resource exports: in 1976, oil and gas accounted for less than 17

percent of the provinces GDP; by 1989, it accounted for 69.5 percent. But it is equally

notable that the rest of Acehs economy remained vigorous: there were no signs of a

regional dutch disease effect. From 1975 to 1984, Acehs agricultural GDP grew, in real

terms, at an average annual rate of 7.6 percent; from 1984 to 1989 it grew at an average

annual rate of just under five percent. Acehs manufacturing sector did even better,

growing at an average rate of 13.7 percent between 1975 and 1984, and at almost eight

percent annually from 1984 to 1989. As a result, Acehs per capita GDP (without oil and

gas) kept pace with Indonesias quickly-rising incomes: in 1983, GDP per capita in Aceh

was 113 percent of Indonesias average; in 1989, they were virtually identical [Dawood

and Sjafrizal 1989].21

This rapid growth, ironically, may have caused disruptions that eventually

contributed to the 1989 return of GAM. Between 1974 and 1987, the district of North

Aceh which included P.T. Arun, Mobils natural gas facility rose in population from

490,000 to 755,000; social amenities and infrastructure for workers and job-seekers were

severely overstretched. Some 50,000 Indonesian transmigrants had also come to Aceh,

largely attracted by the oil and gas boom [Hiorth 1986]. Rapid urbanization, the

incursion of the non-Acehnese, land seizures, pollution, and competition for jobs in the

21Data on Acehs GDP is from internal World Bank documents.

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industrial sector all contributed to tensions that may have contributed to GAMs 1989

incarnation [Kell 1995].

There were several political developments that appeared to increasepopular

support for the central government, at least through 1987; from 1987 to 1989, this trend

may have reversed. In 1984, top officials in the ruling Golkar party began a strategy to

increase the partys popularity in Aceh, so that it would win the province in the 1987

general election. One tactic was the August 1986 appointment of Ibrahim Hasan as

Acehs governor; Hasan was a skilled and popular figure who energetically campaigned

on Golkars behalf. Another was a series of development projects, whose inauguration

was presided over by Golkar officials.

Golkar also made a concerted effort to blunt the appeal of the PPP, the toothless

Islamic opposition party that had won previous elections in Aceh, by making stronger

pro-Islamic appeals. Acehs most prominent religious leader, Daud Beureueh who had

lead the 1953-62 rebellion endorsed Golkar for the 1987 vote. So did other religious

leaders who had previously supported the PPP. Finally, Golkar raised a large campaign

fund for Aceh, thanks in part to the efforts of the director of Pertamina, the state

petroleum company that partly owned the Arun facility [King and Rasjid 1988; Liddle

1988].

These efforts paid off in the 1987 election. In 1982 Golkar had won just 37

percent of Acehs popular vote; in 1987 it won 51.8 percent, gaining a majority in seven

of the provincess ten districts and 77 of the 137 subdistricts. Even though the opposition

parties were never able to compete fairly with Golkar, the rise in Golkars vote share

suggests that support for the central government had lifted over time.

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Still, it is difficult to make extrapolations from these figures about the

governments support from 1987 to 1989, since many campaign promises went unfilled.

The development budget for the province as a whole dropped in 1987 by 36 percent; the

budgets for the districts also fell sharply, and special projects were canceled by the

central government [King and Rasjid 1988]. Disappointment with Golkars extravagant

campaign promises appeared to be widespread [Kell 1995].

2.3 The Rise and Fall of GAM II

GAMs second coming in 1989 was caused in part by three factors: GAMs support from

a foreign government; its assistance from local Indonesian security officers; and

continuing grievances among the population, including grievances associated with the

LNG boom. Even though GAM was larger and better equipped in 1989 than it had been

a decade earlier, it still failed to win widespread support, perhaps due to the regions

strong economic performance.

After slipping out of Indonesia in 1979, Hasan di Tiro and some of his top

advisors moved to Sweden, where they set up an Acehnese government-in-exile, which

doubled as GAMs overseas headquarters. Around 1986, GAM made contact with the

Libyan government. In 1986 or 1987 GAM began to receive Libyan support, as part of

dictator Muammar Qaddafis efforts to promote insurgencies worldwide [Kell 1995].

Between 250 and 2000 GAM recruits, drawn primarily from the Acehnese population in

Malaysia, received military and ideological training in Libya in the late 1980s. This

assistance enabled GAM to survive, and even grow, at a time when it had been largely

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high-paying jobs and revenues, official corruption, and concerns about the un-Islamic

behavior of non-Acehnese migrants [Vatikiotis 1990, 1991; Kell 1995; Robinson 1998].

Estimates of GAMs strength in 1989-91 range from 200 to 750 active members.

Although Libya had provided training, it did not offer GAM any additional funds or

weaponry. Some money was apparently raised among the Acehnese living in Malaysia.

GAM also stole (or perhaps, purchased) weapons from Indonesian security forces,

obtaining some 200 automatic rifles and light machine guns by June 1990. Still, guns

were scarce, and guerillas were reportedly forced to share their arms [Kell 1995].

Until mid-1990 the government responded to the attacks on its forces in a

relatively low-key manner, relying solely on the troops already stationed in Aceh. But in

June 1990, after identifying GAM as the source of these attacks, President Suharto

ordered a much more drastic response ordering 6,000 additional troops to Aceh,

including special counterinsurgency units. From this point forward Aceh was regarded as

a DOM (Daerah Operasi Militar, area of military operations,), a designation that has

no fixed definition or legal status but implies that the military has a heightened level of

authority and can conduct its operations with impunity.24

The governments response was successful in the short term: by the middle of

1991 GAMs activities were reduced to a minimum, and by the end of 1991, many of

GAMs field commanders had been captured or killed. But the costs of the governments

response in human rights violations was immense; and the governments brutality

produced a deep-seated antipathy towards the government and heightened support for

Acehnese independence, and ultimately, contributed to GAMs third incarnation in 1999.

24On the meaning of the term DOM, see Widjajanto and Kammen 1999.

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Independent estimates of the death toll during the 1990-1992 period range from

just under 2,000 to 10,000; the vast majority of deaths were caused by the government

[Amnesty International 1993]. Although human rights violations continued after 1993,

only a handful of additional deaths were recorded. According to the International Crisis

Group, the number of casualties from the conflict between 1990 and 1998 was 1,000-

3,000 killed, 900-1400 missing and presumed dead, and 500 maimed [ICG 2001a].


The risk of violent conflict in Indonesia declined from 1989 to mid-1997, due to rapid

economic growth and a declining reliance on natural resources. But in late 1997 and

1998, Indonesia suffered a dramatic economic setback, triggered by the currency crisis in

Thailand; and in May 1998 President Suharto was forced from office, producing a more

democratic, but less stable, national government. By 1999, these economic and political

factors had sharply raised Indonesias conflict risk. Most of Indonesias other risk factors

ethnic, demographic, and geographic showed little measurable change between 1989

and 1999, while the risk of violence due solely to the proximity of past episodes of

violence fell, as the national carnage of 1965-66 and the East Timorese carnage of 1975-

79 receded into the past.

From 1989 to 1996, Indonesias economy grew at an average rate of 6.5 percent a

year. Real per capita GDP in 1996 was $1074 (in constant 1995 dollars); in real terms, it

had doubled since 1983 and quadrupled since 1968, all under the economic team of

President Suharto. Although the economy was initially dependent on natural resource

exports its resource exports-to-GDP ratio peaked at .252 in 1980 by 1996 it had

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dropped to .082, thanks to an abundance of low-wage manufactured goods and falling oil

prices. Compared to most developing states, Indonesia continued to have relatively low

inequality levels: the gini coefficient in 1996 was 36.5.

In mid-1997, however, the baht crisis in Thailand triggered a run on the

Indonesian rupiah and subsequently, a banking crisis, capital flight, and an economic

collapse. Between July 1997, when the baht crisis began, and late January 1998, the

rupiah lost 85 percent of its value. The economy contracted by 17.8 percent in 1998 and

grew just 0.4 percent in 1999. Per capita income dropped to $904 in 1999 (in constant

1995 dollars).

The economic crisis, and mounting unhappiness with corruption in the Suharto

government, forced Suharto to step down in May 1998 after 32 years of authoritarian

rule. He was replaced by Indonesias Vice President, B.J. Habibie, as provided for by the

constitution. After parliamentary elections in June 1999, Habibie was replaced in

October 1999 by Abdurrahman Wahid, a respected Muslim cleric, who headed a new

coalition government.

If judged by the ambiguous standard of legitimacy, it is unclear whether

Indonesias conflict risk rose or fell after Suhartos departure. On one hand, the

resignation of Suharto was greeted with widespread acclaim, which implies that the

legitimacy of the government rose; on the other hand, President Habibie had been hand-

picked by Suharto, but unlike Suharto had no real constituency of his own. The

replacement of Habibie with Wahid also had an ambiguous effect on the governments

legitimacy: on one hand, the 1999 parliamentary election was Indonesias first free

multiparty election since 1955; on the other hand, there was no direct vote for the

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The economic crisis was less severe in Aceh than it was in the rest of the country,

thanks in part to the strength of the provinces large agricultural sector. The impact of

the crisis was largest in Acehs oil and gas sector its income shrank by 17.3 percent in

1998 but this was also the sector whose direct impact on local welfare was the smallest,

as it employed just 3,811 people about 0.35 of the provinces labor force [BPS Aceh

1999]. The rest of the industrial sector, which employed 5.2 percent of the labor force,

fell by 11.8 percent, while the agricultural sector, which employed 58.6 percent of Acehs

workers, grew by 1.4 percent. Overall, regional GDP declined by 9.2 percent in 1998,

but if oil and gas income is excluded, the contraction was 5.9 percent. In 1999, Acehs

non-oil and gas economy contracted another 2.9 percent [BPS Aceh 1999, 2000].

The economic crisis produced only a temporary rise in Acehs unemployment

level. Even though the number of people in the official labor force dropped 37.3 percent

in 1998, the number of registered job seekers fell by 65 percent. Hence while the official

unemployment rate rose from 6.5 percent to 10 percent from 1996 to 1997, it dropped

back down to 5.5 percent in 1998.25 This drop in unemployment was probably caused by

the migration of unemployed workers back to their villages, a common pattern in

Indonesia. While this reduces unemployment, it generates underemployment. Of those

who remained as registered job seekers, over forty percent lived in North Aceh, where the

natural gas facilities are located [BPS Aceh 1999].

Two decades after the natural gas boom had begun, Acehs economy remained

highly dependent on natural resources. Sixty-five percent of Acehs GDP in 1998 came

25 Different unemployment figures are offered by different provincial documents, evenfrom the same agency. A June 2000 report states that unemployment in Aceh fell from26.1 percent in 1997 to 18 percent in 1998 [BPS Aceh 2000].

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from the production of oil and gas, and 15.1 percent came from other resource activities,

including fishing, agriculture and forestry; these figures had changed little since 1989.

As a fraction of exports, Acehs reliance on natural resources was even more striking: oil

and gas accounted for 92.7 of Acehs 1998 exports even though the sector employed

only one-third of one percent of the provinces labor force [BPS Aceh 1999].

The fall of the Suharto regime in May 1998 also triggered a pair of political

developments that further raised the conflict risk in Aceh: the independence referendum

in East Timor and the loss of government credibility. Ironically, these developments

were preceded by a series of government initiatives that should have reducedthe conflict

risk.

Around the time that Suharto was ousted, journalists and NGOs in Aceh began to

call attention to atrocities committed by the military and police in their campaign against

GAM. In late July 1998, a fact-finding team from the national parliament admitted that

serious human rights violations had occurred in Aceh between 1990 and 1998. In early

August 1998, armed forces Chief Wiranto visited Aceh to announce a withdrawal of

combat forces and an end to the DOM, and to apologize for the armys human rights

abuses. In March 1999, President Habibie visited Aceh himself and pledged to aid the

regions economy, to help children orphaned by the war against GAM, and to establish a

commission to examine human rights abuses by the security forces [Robinson 1998].

Three major pieces of national legislation should also have lowered the danger of

a new civil war in Aceh. In late April 1999, the parliament adopted a pair of

decentralization laws (No. 22 and 25 of 1999) that gave all of Indonesias regional and

local governments extensive powers, and enabled them to retain much of the income

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from the extraction of natural resources in their own regions including 15 percent of the

net public income from oil, 30 percent from natural gas, and 80 percent from timber

(which is also abundant in Aceh). The parliament adopted a third law (No. 44 of 1999)

that affirmed Acehs right to control its own cultural, religious, and educational affairs.

These developments should have made Acehs status as a member of the

Indonesian republic more attractive and independence less attractive for Acehs citizens

and politicians; and it should have thereby reduced the likelihood that a new civil war

would break out. But two additional factors seemed to obviate these positive

developments. The first was the demonstration effect of East Timors referendum on

independence.

In January 1999, President Habibie announced that East Timor would be allowed

to secede from the Indonesian Republic, if its citizens voted to do so in a province-wide

referendum. Within weeks, student groups in Aceh had formed organizations calling for

a similar referendum. East Timors referendum was held in September 1999, and

produced an overwhelming vote for independence (as well as a vicious backlash by state-

sponsored militias). That same month, Acehs conference of Ulama (Muslim religious

leaders) backed the idea of a referendum. The following month there were massive

parades across Aceh in support of a referendum. In November 1999 hundreds of

thousands of people according to some estimates, as many as one million people

gathered in the Acehnese capital, Banda Aceh, to hold a rally in support of the

referendum. According to polls taken by a leading pro-referendum NGO and the

virtually-unanimous perception of outside observers a freely-held referendum would

produce a strong vote for independence.

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Special Forces were killed or disappeared, although it was unclear who was behind these

murders. A journalist who visited Aceh in mid-November 1998 found no trace of GAM

[McBeth 1998].

Yet in early 1999 GAM reappeared and began to grow more quickly than it ever

had before. By July 1999 it reportedly had more than 800 men under arms, equipped

with assault rifles and grenade launchers. Two years later GAM had an estimated 15,000

to 27,000 men and was reportedly in control of 80 percent of Acehs villages [ICG

2001a].

The sudden return of GAM cannot be explained by a change in funding: GAM

appeared to have little revenue between 1991 and 1999, and it had lost Libyas

sponsorship. The main cause for GAMs successful re-emergence may be the sharp

change in public opinion about Acehnese independence, caused by the factors outlined

above: the economic crisis, which made independence and the retention of LNG

revenues seem more attractive; the revelations of human rights abuses; and the

governments low credibility. This shift in public opinion made it easier for GAM to

recruit new members, and perhaps, to raise funds.

At first GAM had to use force to conscript new members.28

But it then began to

target for recruitment the children of people who had been killed or tortured by security

forces under the DOM, offering them the opportunity to avenge their parents. According

to the Care Human Rights Forum, 16,375 children had been orphaned during the 1990-98

military crackdown [McBeth 1998]. By mid-2000, these children of the DOM victims

28Author interview, Medan, June 2000.

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by GAM members without the leaderships authorization. The GAM leadership later

apologized to the US Embassy and promised to try and punish the kidnappers.

But many of these incidents were part of efforts by GAM to extort money from

ExxonMobil, to reduce the governments gas revenues, or both. In March 2001 the GAM

regional commander in the Lhokseumawe area, Muzakir Mualim, stated in an Indonesian

newsweekly that GAM had been demanding money from ExxonMobil. We expect them

to pay income tax to Aceh. Were only talking about a few percent of the enormous

profit they have made from drilling under the earth of Aceh [Tempo 2001a].32

It is unclear whether ExxonMobil (or one of its subsidiaries or affiliates) actually

made such a payment. According to the generally reliable Tempo [2001a], the company

paid GAM five billion rupiah (about $500,000); other sources support this claim,

although the company denies it. Previously GAM had pledged it would not attack

foreign companies; the attacks on Arun may represent a change in policy, or a split

between the central GAM leadership and the local GAM command.

As in 1977-79 and 1989-91, GAM has been hindered by a shortage of weapons.

Although it has between 15,000 and 27,000 soldiers, they are thought to have only 1,000

to 2,500 modern firearms, one or two 60 mm mortars, a handful of grenade launchers,

and some land mines. Most GAM fighters have only homemade or obsolete firearms,

sharp or blunt instruments, or explosives [ICG 2001a; Davis 2001]. The majority of

32 Some of GAMs attacks on the Arun facility have other motives. GAM hasperiodically attacked military units that happen to be based at Arun. In October 2000,17,000 sticks of dynamite were stolen from an Arun warehouse, although GAM may nothave been the perpetrator. There may also be an ideological component to some ofGAMs anti-Arun activities: GAM officials continue to denounce ExxonMobil forexploiting Acehs land for the benefit of the colonialist government in Jakarta [JakartaPost 2001a].

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ideology; the association of the Javanese with the military, who are loathed; and

competition between the Acehnese and non-Acehnese over jobs. It also may have been

caused by the fear that the army would organize non-Acehnese settlers into a militia to

fight the separatists, as they did in East Timor. In 2001 there were reports that Javanese

settlers were indeed being recruited into a nationalist militia [Tempo 2001b].

The army and police have responded to GAM with their own mix of strategies.

These include attacking and killing GAM personnel, including its military leaders;

detaining and torturing anyone believed to have information about GAM, or to be

sympathetic to them; burning houses and buildings in villages where GAM may have a

presence, or that are simply near recent GAM activities; developing a militia composed

of Javanese migrants; and forcibly recruiting petty criminals and teenagers to use as

informants. According to an estimate in mid-2001, approximately 30,000 military and

police personnel were operating in Aceh. They operate in what the International Crisis

Group calls a virtual legal vacuum and have committed a large number of atrocities

[ICG 2001a; Human Rights Watch 2001].

The militarys failure to contain the rebel movement could be attributed to

ineptitude, corruption, or a belief they will profit from an ongoing conflict. Efforts by

both Presidents Habibie and Wahid to find peaceful solutions were subverted perhaps

deliberately by the military. Up and down the chain of command, soldiers profit from

the war in Aceh, and the war has given a political boost to the military as an institution

[ICG 2001a].

Efforts to find a peaceful solution have so far produced no concrete results. In

May 2000 representatives of the two parties agreed to a humanitarian pause in effect,

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spread across the province and has become a popular even ubiquitous belief among

the Acehnese.

This belief has given the Acehnese people a financial incentive to support

independence, and may have made them more likely to make voluntary donations to

GAM which they might see as rational investments in their future. While the economic

attraction of independence may have meant little while the economy was growing quickly

in 1976-79 and 1989-91, it took on greater salience after the economic crisis of 1997-98.

Second, Acehs natural gas wealth heightened the risk of conflict by

producing a larger military presence in the province; and by inducing a more repressive

response from the government to early signs of unrest. The government has placed

Military Operations Command (Pangkolakorps) for Aceh directly in Lhokseumawe,

home of the Arun facility. Lhokseumawe is also the base for one of Acehs two Sub-

Regional Military Commands, Korem 011 (Komando Resor Militer) [Robinson 1998].

The military has long had a central role in managing the Arun facility, in part out

of fear that grievances over the distribution of its revenues would lead to security

disturbances. Political scientist Donald Emmerson, who observed the central

governments procedures for developing the Arun facility and the adjoining industrial

zone in the early 1980s, observed that Indonesian bureaucrats believed that

once those facilities have begun to fill central coffers with foreign exchange, theclaims of regionalists to the income from their resources must be preventedfrom undermining the unity of the nation or, from a regionalist perspective, thehegemony of the center. These concerns explain why the armed forces and thesecond-most penetrated ministry [by the army], Home Affairs, approacheddecisions affecting Acehs [industrial zone] mainly in security terms [Emmerson1983, 1233].

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Finally, Acehs resource wealth may be making the civil war harder to resolve, by

reducing the credibility of the governments commitments to regional autonomy. In

August 2001, the government adopted a law that granted Aceh special autonomy,

including the right to retain 70 percent of the provinces oil and gas revenues. The

credibility of the governments promises was already quite low in Aceh. The resource

wealth may have lowered it even further, since the Acehnese may have doubted that the

cash-strapped central government would abide by this agreement once the war was

over.37

Conclusion

This paper has described some of the proximate causes of the violence in Aceh since

1976. In general, the case of Aceh fits the Collier-Hoeffler model of civil wars well.

Aceh has many of the characteristics that Collier and Hoeffler suggest tends to put

countries at risk: it is relatively poor; mountainous; ethnically homogeneous; has a

significant diaspora; suffered from conflict previously; is only partly democratic; has a

weak judicial system; and is highly dependent on the export of natural resources.

It has also tried to show that three additional factors can help provide a more

complete explanation for the Aceh civil war. The first is the entrepreneurship of Hasan di

Tiro, the founder of the separatist group GAM. The Aceh conflict was largely caused by

the rise of GAM: it is the only organization in Aceh that has violently challenged the

Indonesian state since 1963, and had it not formed, Acehs recent history would be far

37See footnote 27.

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Table 1: The Three Incarnations of GAM

Years Active Members Casualties

1976-79 25-200 >100

1989-91 200-750 1990-92: 2,000-10,000

1999- 15-27,000 1999: 3932000: 1041

2001: ~1700

resourcesrebellion aceh -michael ross

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