Province

Aceh

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.

Show more

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.

Show more

Latest News

May 8, 2025

Aceh Deputy Governor Fadhlullah "Dek Fadh" promoted Aceh's investment potential of Aceh to investors from the Hangzhou Chamber of Commerce during a meeting at the Deputy Governor's Official Residence hall on May 1, 2025. The meeting was also attended by the Economic and Development Assistant of the Aceh Regional Secretary Zulkifli, and several heads of related regional government offices.

"Aceh's territory spans more than 58,000 square kilometers (km2) and is surrounded by sea, leading us to have a very largeour marine and fisheries potential. However, marine products [from Aceh] are still being exported through Medan. This is one of our limitations," he said.

Dek Fadh invited Hangzhou investors to look into the sector and build a port that could export products from said sector directly from Aceh. He also highlighted Aceh's plantation sector potential.

"We have 70 palm oil mills, but all CPO (crude palm oil) is sent to North Sumatra because Aceh does not have a refinery. As a result, the roads are damaged [due to the trucking of CPO to North Sumatra's ports] and the increased economic value is gained by neighboring provinces," explained Dek Fadh.

For the mining sector, western and southern Aceh have iron ore, gold, galena, tin, and copper. Meanwhile, the province's central region is known for its gold reserves.

“The energy sector is also promising. We have [hydro power potential from] rivers and waterfalls, as well as geothermal potential. With all those [advantages], Aceh should not be among the poorest areas in Sumatra,” he stated.

However, the long history of conflict for 32 years and the tsunami disaster affected public perception of Aceh.

“Aceh is still stuck with the image of a conflict area. In fact, the crime rate in Aceh is among the lowest in Indonesia,” added Dek Fadh.

He emphasized that now is the right moment to invest in Aceh.

“Our governor (Muzakir Manaf) is in Gerindra (Great Indonesia Movement) Party's Advisory Board, I am myself the Gerindra Aceh Chair, and our President is the the Gerindra Party chair. This synergy is a great opportunity for investors,” Dek Fadh said.

 “The people of Aceh are friendly and polite. We guarantee that Aceh is safe and comfortable. Please explore and invest, we are ready to provide full support,” he concluded.

Meanwhile, Hangzhou Chamber of Commerce Indonesia Secretary General Lucita admitted that investors from Hangzhou were initially hesitant to come to Aceh.

“I have been to Aceh before, including Sabang. In my opinion, Aceh is an unpolished diamond. I convinced my colleagues that Aceh has great potential, and this is the right time to come and invest,” she divulged.

Lucita said that her colleague Adi Laweung and herself brought dozens of Acehnese residents to attend food security training in Serang City, Banten province.

“Over time, I fell more and more in love with Aceh. So I brought my investor friends from Hangzhou,” she said.

Lucita was present at the meeting with Wang, the owner of a conglomerate that controls 23 companies in Hangzhou.

“Mr. Wang is interested in marine products such as squid, lobster, and sea cucumber. If there is a direct export port from Aceh, it would be very profitable,” she noted.

Lucita revealed that there are already 10 companies ready to invest in Aceh’s fisheries sector. In addition, the agribusiness sector is also attracting investor interest.

“Mr. Wang hopes that there will be an official agreement between the Aceh Government and the Hangzhou Chamber so that he can convey it directly to business partners in China,” she concluded.

Read more
Load more