As Western donors prepare to pull out of Aceh, nearly eight years after the Indian Ocean earthquake and tsunami that killed 170,000 people in the province, the ultimate challenge is whether it can fend for itself. In the provincial capital of Banda Aceh, the signs are encouraging.
New Japanese cars fill the reconstructed streets, teenagers pack out the coffee shops in the city centre and shoppers buzz around the city’s first shopping mall – the symbol of arrival for every up-and-coming Indonesian mid-tier city.
Rather than resembling an international aid agency fantasy land, with well-maintained streets and model housing, Banda Aceh is starting to assume the gritty feel of an emerging market boom town, with chaotic new construction projects and the heavy traffic flow churning the roads into mud streams during rainy season.
Investors are already keenly focused on Indonesia’s second-tier cities, with around a million or more people.
Now, they are starting to pay more attention to the next level down, cities like Banda Aceh, which now has a population of nearly 250,000, according to the local government.
At the city’s Hermes Palace Mall (pictures), which opened in 2010, the middle-market Matahari department store was seeing solid trade over the weekend. That’s good news for CVC Capital Partners, the private equity firm that is trying to sell its controlling stake in Matahari, which has 88 stores, for at least $1bn. CVC also own Samsonite luggage and Virgin Active gyms.
In addition to Matahari, its anchor tenant, the mall offers all the trappings of the modern middle-class life from designer spectacles to treadmills and ethical Body Shop cosmetics to imported children’s toys.
Although everyone in Banda Aceh suffered from the devastation brought by the tsunami, which came after years of violent separatist conflict, many residents appear to have a surprisingly optimistic outlook.
Memorials to the tsunami such as a fishing boat that got stuck on the roof of a house and saved 59 people in the process and a large power generation ship that was washed several kilometres inland have been turned into public spaces and tourist attractions.
Several hawkers now sell DVDs of the tsunami to the small but growing number of tourists.
Like the other tsunami sites, the boat-shaped tsunami museum, which incorporates a haunting, narrow corridor enclosed by two walls of water, has also become a popular hangout for residents, who pose for photographs in front of dioramas showing the destruction wrought by the huge waves.
With the beautiful island of Weh (also known as Sabang) just an hour away by fast ferry and direct flight connections to Kuala Lumpur and Jakarta, local businesses hope that Banda Aceh can attract more open-minded tourists who want to combine tours of the tsunami sites with a beach break.
It’s a strange and, at times, unsettling mix, like many aspects of life in a province where the tsunami helped bring about the end of the long-running separatist conflict but also the imposition of Shariah law, which is not universally popular. For the most part, however, the city appears to be back on its feet.