Province

Aceh

Overview Economy

Aceh, an Islamic province

Situated on the northern end of Sumatra Island, Aceh province is one of the first regions in Southeast Asia to Islam. It is also recognized as the only region in Indonesia where the criminal justice system enforces Islamic law for both Muslims and non-Muslims.

Aceh is committed to religious conservatism, making it the only Indonesian province implementing Sharia law. This strict adherence traces back to its early embrace of Islam. The enforcement of Sharia Law prompted the Indonesian government to grant Aceh a special autonomous status. However, this special status was, in part, a measure to appease the Free Aceh Movement (GAM), a group involved in a nearly three-decade-long insurgency to achieve independence.

In addition to being granted special autonomy status, Aceh has established its local political party, officially recognized and registered by the Indonesian government. This recognition has allowed them to take part in the 2024 election.

Due to Aceh’s geographical location being bordered by the Indian Ocean to the north and west, and the Strait of Malacca to the east, the province is prone to natural disasters.

In December 2004, the western coastal areas of Aceh, including cities such as Banda Aceh, Calang, and Meulaboh, bore the brunt of the tsunami resulting from the 9.3 magnitude Indian Ocean earthquake. Although figures may differ, the tsunami in Aceh claimed the lives of more than 170,000 individuals, leaving approximately 500,000 people without homes.

The occurrence of the 2004 tsunami in Aceh is viewed as a period of tranquillity for both the Free Aceh Movement (GAM) and the Indonesian government. Subsequently, the conflict was formally concluded through the signing of a peace agreement in Helsinki, Finland.

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Aceh’s economy, leading sectors

According to Statistics Indonesia, Aceh’s Gross Domestic Product (GDP) reached Rp 36.6 trillion as of the third quarter of 2023. Alongside this economic growth, the region is home to a population of 5.4 million people, spanning an area of 56 thousand square kilometers and encompassing a total of 23 regencies and cities.

Previously, Aceh boasted substantial reserves of oil and natural gas, a sector that played a crucial role in propelling the province's economy. By 2023, this significance has waned, marking a shift in the economic landscape. Now, the leading sectors in the province are agriculture, fishery, and transportation.

Furthermore, investment in Aceh holds immense potential, driven by its strategic geographical advantage in the marine and fisheries sector. As of the third quarter (Q3) of 2023, this sector contributed 27 percent to the Gross Regional Domestic Product (GRDP), amounting to Rp 9.87 trillion. With primary commodities such as palm oil and coffee, Aceh’s agricultural sector also beckons investors to explore the 299,701 hectares of available land for business ventures.

Adding to its appeal is Aceh's location bordering the Malacca Strait, a key international waterway linking the Indian Ocean and the Pacific Ocean. The government's substantial investment in upgrading transportation infrastructure for sea, air, and land routes further enhances the region's attractiveness. In Q3 2023, the transportation sector accounted for 7 percent of the GRDP, totaling Rp 2.46 trillion.

Ultimately, Aceh stands as a promising investment destination, leveraging its unique geographical advantages to foster growth in the marine, fisheries, and agricultural sectors. The province's commitment to enhancing transportation infrastructure not only increases its appeal but also creates opportunities for investors.

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Latest News

April 16, 2025

PT Aceh Nusa Indahpuri (ANIP) has stated its commitment to invest in Aceh's agriculture and carbon sectors, which would be carried out with a wide-scale massive community involvement as part of efforts to preserve the environment while boosting the local economy.

Aceh Wali Nanggroe Institution (LWN) Acting Public Relations and Cooperation Head Zulfikar Idris divulged the plan was conveyed by PT ANIP shareholder Robin Sitaba after an audience with LWN Aceh Special Staff M. Raviq and LWN Aceh Secretariat officials on Apr. 8, 2025 within the Meuligoe Wali Nanggroe Complex in Aceh Besar Regency, Aceh Province.

In the meeting, PT ANIP also asked for direction and support from Wali Nanggroe.

"Today we coordinate and ask for permission [regarding the investment plan]. There are many inputs that we have received, especially about the importance of communicating [the plan] with a good approach to the people of Aceh. That is important so the presence of PT ANIP could be accepted and [it could] successfully establish harmonious cooperation with residents and the people of Aceh in general," said Robin.

He emphasized that PT ANIP's investment would be in the field of sustainability and environmental preservation, with one of the main focus being on a reforestation-based carbon project.

"We are entering the socio-environmental realm for carbon. Hence, we will not be logging, but will instead replant trees in large numbers. We have mapped the location, and the results have been submitted to the ministries of forestry and environment ," Robin explained.

For the initial stage, the planned location is in the regencies of Aceh Besar and Pidie. The carbon investment will be combined with intercropping, which involves the surrounding community as the initiative's main implementer. In addition to providing economic benefits, the program is also intended to restore biodiversity in Aceh's forest areas.

"We hope that through this replanting, Aceh's biodiversity such as Sumatran tigers, elephants, and even rhinos can return to better-protected natural habitats. This is part of a comprehensive environmental conservation effort," added Robin.

PT ANIP also expressed its appreciation for the support from LWN Aceh and the Aceh Provincial Government for the plan.

"We hope that this collaboration can provide great benefits for the people and environment of Aceh," he concluded.

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