Slight poverty increase in Aceh after the tsunami, two years on poverty has declined below pre-tsunami levels

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Jakarta, February 15, 2008: New World Bank research shows that poverty in Aceh increased only slightly in the aftermath of the tsunami, most likely due to the arrival of peace in the province, as well as the impact of the large reconstruction effort. The Aceh Poverty Assessment analyzes poverty trends and determinants before and after the tsunami. In the first year after the tsunami, poverty increased from 28.4 percent of the population in 2004 to 32.6 percent in 2005. Given the scale of the disaster, this increase was significantly less than anticipated and proved to be short-lived. By 2006, poverty had declined to 26.5 percent, below pre-tsunami levels. This trend however, could reverse dramatically after the reconstruction effort comes to an end.

“The current growth trend, primarily the result of the large reconstruction effort, is not sustainable. Agriculture and manufacturing continue to stagnate. The provincial and regional governments, respectively, need to develop the necessary regulations that encourage the development of the private sector, particularly in agriculture and downstream related industries,” said Pak Kuntoro Mangkusubroto, Director of the Executing Agency for Rehabilitation and Reconstruction of Aceh and Nias (BRR).

The report also finds that poverty in Aceh, like other parts of Indonesia, is largely a rural phenomenon, with over 30 percent of the people living below the poverty line. However, the report finds no significant difference in poverty in areas both affected and not affected by the tsunami. “Improving the productivity of the agricultural and fisheries sectors as well as other sectors linked to poverty alleviation is therefore key in the government’s efforts to alleviate poverty”, said Prof. Abdul Rahman Lubis, head of BAPPEDA (Regional Body of Planning and Development) in the provincial administration. Furthermore, he adds, “it is important that the current focus on reconstruction of tsunami-affected areas should be broadened to focus on the poorest and most remote areas that are not necessarily those devastated by the tsunami”.

Aceh will have large fiscal resources in the foreseeable future, providing a unique opportunity for Aceh’s provincial and district governments to use these resources to alleviate poverty. Joachim von Amsberg, Country Director, World Bank Indonesia said, “Given the new reality of decentralized spending and responsibilities, it is necessary to improve the pattern of public spending at the local level to improve the lives of the Acehnese. It is imperative to build the capacity of both the provincial and district administrations, as they take over the responsibilities of rebuilding Aceh as the BRR phases out of the province.”

Enrique Blanco Armas, lead author of the report, highlights that the number of vulnerable people in Aceh is very high: “Many people are just below the poverty line so well-targeted interventions that promote broad-based growth may rapidly reduce the overall numbers of poor.”

To access these reports and read more about the World Bank’s support for Indonesia visit: www.worldbank.org/id(english) or www.worldbank.org/indonesia  (Bahasa Indonesia)

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More Information:
 Aceh Poverty Assesment Report, download in: English | Bahasa
 Main findings presentation of Aceh Poverty Assesment Report, download in: English | Bahasa
 Tsunami & Reconstruction website, in : English | Bahasa