Banda Aceh still trying to turn the tide

Jocelyn Ford Dec 22, 2006

TESS VIGELAND: Just shy of two years ago a deadly tsunami ripped through parts of Thailand and Indonesia. One of the hardest hit regions was the territory of Aceh on the tip of Sumatra. Recovery there has been painfully slow despite the millions of charity dollars raised in the tsunami’s aftermath.

Only half the houses swept away have been rebuilt. Right now the economy depends on reconstruction. But they’re starting to think about what happens when that effort ends. Jocelyn Ford spent some time with an American business consultant who’s in the region to kickstart the private sector.

JOCELYN FORD: It’s daybreak here on the beach in Aceh. Consultant Gordon Studebaker is escorting a buyer who flew over 1,000 miles from one of Indonesia’s biggest fish factories. They’re inspecting the catch brought in by traditional fishing boats painted in bright blues and greens.

GORDON STUDEBAKER: Do they wanna bring the fish over there and we can look at them?

RONNIE SUTJIAMIDJAJA: Fresh, very fresh. You should see the gill and eyes first . . .

Buyer Ronnie Sutjiamidjaja says Aceh is home to one of Indonesia’s few undeveloped fishing grounds. But he wouldn’t have made the trip if Gordon hadn’t thrown him the hook. Like many Indonesians, he was afraid to come here, and it had nothing to do with the Tsunami.

SUTJIAMIDJAJA: I thought the Achenese people are very dangerous. I didn’t expect the people as nice as this.”

Aceh got a bad reputation in other parts of Indonesia during a 30-year conflict with Jakarta. The insurgency was over profits from oil and gas, and widespread human rights abuses.

Although the December 2004 Tsunami killed 170,000 people, it also brought the warring parties to the negotiating table. Fifteen months ago they signed a peace agreement. That’s crucial for attracting badly needed outside investment.

DAVID LAWRENCE: There’s more harm from the conflict than from the Tsunami.

David Lawrence heads the World Bank’s private business development office in Aceh.

LAWRENCE: A lot of the business community left. So, over 30 years this had a big effect on the business culture.

Gordon Studebaker’s biggest headache is an outdated business culture, and the mentality of aid donors who he says don’t understand business. Consider this assignment: Within three months . . .

STUDEBAKER: I was told that I had to put one deal together — close one deal. Whatever that means, OK? And I argued. And I said it’s ludicrous, it’s development lunacy.

He figures the Indonesian government and aid donors needed a success, any success, in time for their report on the second anniversary of the Tsunami. But he says that’s no way to nurture an economy.

STUDEBAKER: If you are going to do business development, at least it has to be systematic, and it has to be broad-based.

First, he set out to see what Aceh has to offer to the world marketplace. He visited spice and coffee farms. He found a problem: Acehnese farmers and fishermen still get their product to market using antiquated systems introduced by the Dutch colonialists centuries ago. They sell to middlemen, who lend them money, and then take a juicy margin. So, he invited in fish processor Ronnie Sutjiamidjaja to cut out the middle, and Ronnie says he’s willing to put down money.

SUTJIAMIDJAJA: I want to invest in ice factory first.

Gordon says that’ll help fisherman get their catch closer to faraway consumers.

STUDEBAKER: It’s great! It’s the first step in them being able to access international markets.

Gordon’s not only made good on his promise to his boss to deliver a deal, this deal might even help local fishermen.

In Banda Aceh, I’m Jocelyn Ford for Marketplace.

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