BRR Economic Development Strategy

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BRR Economic Development Strategy

• Jakarta, March 20, 2006

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Substantial geographical disparities in the
standards of living!
Aceh remains among the top 5 poorest provinces in
Indonesia
Poverty Level
Lack of Infrastructure, isolation and conflict
made Aceh one of the poorest regions in Indonesia
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The New Aceh Opportunities Without
BoundariesKey Principles of Economic Development

• Aceh as Indian Ocean trading hub
• A business-friendly legal, and institutional
  framework supporting sustainable economic growth
  and investment certainty
• Highly-active, outward-looking Acehnese
  entrepreneurs (micro and SME) with strong
  business skills
• Logistical infrastructure that promotes market
  access and business efficiency
• Geothermal energy attracting and supporting SME
  growth

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FOCUS OF BRR ECONOMICS DEVELOPMENT ACTIVITY WILL
SHIFT OVER 2006-2008
Labor Training for professional purpose
Labor Training for RR Purpose
Micro Finance
Industri Kecil, Menengah
Restoration Rehabilitation
Industri Besar, Inevestasi dan pariwisata
2005
2006
2007
2008
2009
BRR assignment period
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Disbursement of BRR 2005 budget by sector (Rp
billion)
2006 to be included
Related to Livelihood Programs
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Direct Off-budget Livelihood Spend 16m
Indirect Off-budget Livelihood Spend 489m
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Allocation of Funds versus Core Minimum
Needs(Million US)
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Current Initiatives

• USAID to play a role in economic and business
  development plans in progress
• Benchmarking study underway initiatives in
  similar regions we can borrow from
• Currently appointing TA to develop a bio-fuels
  strategy
• Undertaking institutional reforms in tax,
  banking, business law and land ownership for
  business certainty and cost effectiveness
• Identifying new technologies that can be
  introduced into the context of Aceh and Nias
• Identifying high-potential industries -
  agri-business, fisheries, tourism
• Road, port, rail, air and telecom infrastructure
  under development facilitators of market access
  and trade

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Appendix
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APBN Spending Allocation 2006- Livelihoods 128.6
billion Rupiah

• Trading
• Total 27bn
• Markets (21.6bn)
• Capital for wholesale/retail entrepreneurs
  (through microfinance) (3.6bn)
• Checking scales consultants (700mn)
• Tourism Development
• Total 9.3bn
• Rehabilitation of tourism sites (Sabang,
  Lampuuk, Ujung Batee, Sinabang, Pulau Banyak
  (Aceh Singkil)) (6.75bn)
• Training for Tourist Guides (100mn)
• Training for Diving Instructors (200mn)
• Dinas Persata Employee (100mn)
• Promotion of tourism (200mn)
• Asean diving festival (250mn)
• Development of Family Tourism(300mn)
• Development of access to tourism sites (200mn)
• Site renovation (150mn)
• Inland water tourism development (100mn)
• Investment one-stop-shop information and advice
  on how to (investment outlet centre) local and
  intl

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• Vocational training
• Total 20.3bn
• Reconstruction skills
• Capacity building for construction enterprise
  (software, management)
• Life skills (fish processing, embroidery, etc.)
  (14bn)
• Small and medium industry and money (40.5bn)
• Agro-industry
• Home industry
• Money for tools, equipment, rehabilitation of
  buildings
• Microfinance
• Total 72bn
• Training for community and MFI managers at Kec
  and Desa level (2bn)
• Soft loan and commercial loans (63bn)
• Soft loan (26bn)
• Commercial loan (37bn)
• Capacity building for MFI at Kec and Desa level.
  
• Support for infrastructure and property,
  renumeration (1.5bn)
• Strengthening MFI at district level (940mn)

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SEGMENTASI SME vs MFI
Target Market BANK
2008
Target Market MICRO BANKING B.P.R
2007
2006
Target Market MICRO FINANCE L.K.M.
Target Market K.S.M.
2005
DANA SOSIAL
POTENTIAL PASSIVE
POTENTIAL ACTIVE
FEASIBLE
ELIGIBLE
BANKABLE
UMK