Modeling Aceh: Essays On Resource Management, Inflation, And Social Capital
This dissertation is a collection of three papers that cover contemporary issues at centre stage in the development of Aceh, Indonesia. The first, ‗Testing the resource curse hypothesis in Aceh', empirically tests the resource curse hypothesis in this oil and-gas rich region. Using data from 1975 to 2006, the model results reject the hypothesis of a resource curse. The empirical models indicate that the boom in the mining sector in Aceh from the late 1970s until the mid-1980s did not reduce the output of the non-mining manufacturing and agriculture sectors as predicted by the resource curse theory. On the contrary, the increase in mining output actually had a positive impact on the other two sectors' output. Conflict, on the other hand, although not being significant in the model, shows a negative relationship with output in nonmining manufacturing and in agriculture. The Asian economic crisis, interestingly, is also found to have had a positive impact on the non-mining manufacturing and agricultural sector. The second paper, ‗Determinants of inflation in Aceh', examines inflation behaviour in Aceh before and after the 2004 Indian Ocean tsunami. The wild increase in inflation in post-tsunami Aceh was assumed to be influenced by two ‗shocks': the tsunami and the nation-wide fuel price increase in 2005. Multivariate time series regression models are developed to describe the inflationary process. It is found that Aceh's inflation is determined mainly by inflation expectations and the exchange rate, in a way similar to Indonesia's national inflation behaviour. Productivity is also significantly associated with inflation, but with a contradictory sign when decomposed into productivity based on oil-and-gas and non-oil-and-gas GDP. Additionally, contrary to a common assumption, a structural change test indicates that it was the oil price increase, rather than tsunami-driven factors, that changed the structure of Aceh's inflation. This paper also incorporates an analysis of the output and price relationship in Aceh's economy to examine further policy implications of inflation. Using structural vector autoregression with Blanchard-Quah restrictions, I find that shocks based on aggregate supply policy would have been more effective than aggregate demand policy in stimulating growth while maintaining moderate inflation in Aceh. The third paper, ‗Social capital as determinants to return among women IDPs of the 2004 tsunami in Aceh', investigates determinants of the decision to return to their original settlements among female internally displaced persons (IDPs) in post -tsunami Aceh. Data from the 2005 survey by the UN Development Fund for Women on the situation of women after the tsunami are used to explore the existence and use of social capital in post-disaster communities. Although the paper is based on migration literature, its approach differs in looking at the role of ‗resource/origin' as a pull factor, rather than ‗host/destination', as generally found in that literature. Using logistic regression analysis, the study finds that women IDPs with strong associations to friendships in temporary settlements and acquaintances from original villages are more likely to return than those with fewer or no such friendships. Indirect associations with a community through shelter type, shelter size and land ownership are also found to be significant factors in the decision to return. Understanding determinants of the decision to leave temporary shelter among women IDPs is expected to help refine post-disaster shelter management so it can be more gendered and culturally sensitive.
Aceh; resource curse; conflict; ols; inflation; svar; b-q; AD-AS Curve; idp; logistic regression; social capital
Mount, Timothy Douglas
Chau, Ho Yan; Azis, Iwan Jaya
Ph. D., Regional Science
Doctor of Philosophy
dissertation or thesis