Quarterly Report: May 2010

The income of Aceh has increased significantly after the establishment of the regulation (UU) No 11 year 2006 regarding Aceh Government by receiving additional fund transfer from the central government through two main sources namely Additional Fund of Fuel and Gas Profit Sharing (TDBHM) and Special Autonomy Fund (DOK). The application of these two funding sources are not optimal beceuse there are a number of rojects which are funded by this fund still eunable to provide an added value to support public social economic activity. Ideally, under tight supervision and evaluation by the provincial government, the application of oil and gas (migas) fund and special autonomy fund is better to distribute independently to all districts/cities as well providing capacity building for the government officers in the districts/cities in term of public fund management. The expenditure of Aceh does not give a significant impact toward an eradication of poverty level because the poverty rate in Aceh is relatively high compared to other province although the expenditure of local government per capita is ranked the forth largest in Indonesia. For the long term, the trend of Aceh expenditure will decrease in term of TDBHM and DOK. The implication is that in the long term, the ability of Aceh to develop strategic sector will decrease. The government of Aceh needs to replan an efficient, effective, pro poor people expenditure and will generate a long term benefit by considering a sustainable funding source.