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Proceedings of MICoMS 2017Prelims

Article information:To cite this document: "Prelims" In Proceedings of MICoMS 2017. Published online: 11 Jul 2018; i-ix.Permanent link to this document:https://doi.org/10.1108/978-1-78756-793-1-00000

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Contents

Malikussaleh International Conference onMultidisciplinary Studies (MICoMS) 2017

x Introduction

xii Acknowledgements

1 The Effect of Job Satisfaction and Work Motivation on Organizational Commitmentand Organizational Citizenship Behavior in BNI in the Working Area of BankIndonesia LhokseumaweApridar and Marbawi Adamy

7 The Effect of Work Motivation on the Employee Performance with OrganizationCitizenship Behavior as Intervening Variable at Bank Aceh SyariahYulius Dharma

13 Life-Cycle Performance of a Bridge Subjected to Multiple Heavy Vehicle ImpactsMaizuar, Lihai Zhang, Russell Thompson and Herman Fithra

19 The Efforts of Improving the Professionalism of Lecturers towards the Presentationand Change of KKNI within the University Environment in AcehKhalsiah, Nur Asma and Marina

27 Morphological Process ofDevayan: An Analysis of Morphological TipologyRatri Candrasari

35 Effect of Freight Transportation for Regional Development in the North Zone of AcehHerman Fithra, Sirojuzilam, Sofyan M. Saleh and Erlina

43 The Roles of Digital Democracy on Political Education for Young GenerationM. Akmal

49 Disorders of Sex Development: Ambiguous Genitalia and Partial AndrogenInsensitivity SyndromeRajuddin and Fauzan

53 Difference Analysis of the Autonomy of Extended Regencies in Aceh ProvinceIndonesiaHendra Raza, Faisal Fahmi and Rita Meutia

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63 An analysis of Service Quality on Mustahiq Satification using the Kano Model (CaseStudy on Baitul Mal)Anwar and Khalsiah

69 Exploration and Morphological Characterization of Vegetative Part of Avocado atBebesan Subdistrict Central Aceh District, IndonesiaIsmadi, Rd. Selvy Handayani, Hafifah and Iqbal Fahrezi

75 Poverty Effectiveness for the Maisir (Contest) in the City of Indonesian AcehProvinceSiti Sahara and Meta Suriyani

81 Measurement of Study Productivity and Evaluation Analysis by using the AmericanProductivity Center (APC) Model at a Palm Oil Factory (Pks PT. Syaukath Sejahtera)Bakhtiar and Defi Irwansyah

87 The Development of an Independent Entrepreneurship Model Through CreativeEconomy forWomen in Lhokseumawe CitySullaida, Nurmala and Chairil Ahyar

93 Regionalism of Aceh’s Traditional Architecture at Bujang Salim Mosque at KruengGeeukeuh, AcehArmelia Dafrina, Nova Purnama Lisa, Deassy Siska and Nurhaiza

99 High Growth and Diameter of the Stem of Corn Plants (Zea May, S) with a DifferentCropping PatternJamidi, Addul Rauf, Chairani Hanum and Erwin Nyak Akop

107 Influence of Manufacture of Textiles, Clothing, and Leather and Manufacture ofPaper, Printing, and Publishing on Economic GrowthIskandar Muda and Nurlina

115 Land Erodibility and Land Use Directions in Krueng Seulimum Watershed AcehProvinceHalim Akbar

121 The Effect of Fermentation of the Peel of Arabica Coffee with Win Prob Probiotics onCrude Fiber Content and Fiber FractionRahmawati, Askura Nikmah, Nisrina and Yayuk Kurnia Risna

127 Teaching English International Lingua Franca (ELF) in ASEAN EconomicCommunity Context: Teachers and Students PerspectivesIdaryani Fidyati, Saifullah and Dini Rizki

Proceedings ofMICoMS 2017

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135 Animation as a Creative Industry: A Strategy to Build Creativity and Independenceof Youth in Padang, West SumatraRahmi Surya Dewi and Agus Rino

143 Improving Production of Liquid Smoke from Candlenut Shell by Pyrolisis ProcessSulhatun, Rosdanelly Hasibuan, Hamidah Harahap, Iriani and Herman Fithra

151 Interpersonal Communication of Commercial Sex Workers Transaction withCustomers in Syariah LawArea in IndonesiaNursan Junita and Vivi Anggraini

157 Macrozoobentos Diversity Index as a Bioindicator in Krueng Cunda River to Supportthe Success of the Shrimp Agribusniness at Lhokseumawe City, AcehEka Maida, Adhiana and Zuriani

165 The Examination Model of Aceh Commodity Export Firms’ PerformanceSyaifuddin Yana, A. Rahman Lubis, Faisal and Hizir Sofyan

175 The Role of Fishing Techniques with Tuah Teng on Food Security in Facing theAsean Economic CommunityNurasih Shamadiyah, Riyandhi Praza and Martina

181 Reconstruction of Aceh Cultural Identity in the Discoure of Aceh Language LessonBooks in Elementary SchoolBachtiar Akob, Aulia Rahman and Guntur Arie Wibowo

187 The Effect of Monosodium Glutamate (Msg) Administration to Pyramidal CellsNecrosis on Cerebral Cortex ofWistar Male Rats (Rattus Norvegicus)Nur Fardian, Meutia Maulina, M. Fadhlan La Tabari and Mardiati

193 Personal Construct Experience of Tionghoa Community in Aceh RealitySafuwan and Muhammad Ali

199 Study of Mineralogy Composition, Total, and Exchangable Content of K, Ca, and Mgof Volcanic Ash from Sinabung Mountain Eruption in North Sumatera, IndonesiaKhusrizal, Basyaruddin R.D.H. Rambe and I. Setiawan

209 The Role of Law in Economic Development: To Develop a Special Economic Zone inOrder to Build a National and Regional EconomyBudiman Ginting, Rosnidar Sembiring, Mahmul Siregar and Afrita Abduh

215 Model Corporate Social Responsibility Based on Local Wisdom in West AcehRegencyJumadiah, Laila M Rasyid, Marlia Sastro and Herinawati

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221 Recurrence of Intravenous Leiomyomatosis: A Rare Cause of the Obstruction of theRight HeartYopie Afriandi Habibie and Dudy Hanafy

229 Single Mother Role in The Success of Their Children (Phenomenological Study ofSingle Women inMakassar City)Indrayanti, Jenny Ratna Suminar, Ahmad Gimmy Pratama Siswadi and Yanti Setianti

235 Optimal Lot-Sizing Algorithms on Stochastic Demand at the RetailerEdy Fradinata, Zulnila Marli Kesuma and Siti Rusdiana

243 Predict Environmental Conditions Using Groundwater Interpretation in SubdistrictHamparan Perak, Deli Serdang, North SumateraSyamsul Amien

251 Public Discovery of the Concept of Time Value of Money with Economic Value of TimeIskandar Muda and Abdul Nasser Hasibuan

259 Study on Impact Strength Against Welding Smaw on Hardening Steel AISI 1050Zulmiardi and Meriatna

265 What is the Determinant of Non-Performing Financing in Branch Sharia RegionalBank in IndonesiaDamanhur, Wahyuddin Albra, Ghazali Syamni and Muhammad Habibie

273 Spatial Stochastic Modeling of Adolescent and Under-Five Children NutritionalStatus: A Case Study fromAceh, Sumatera Island, IndonesiaSiti Rusdiana, Zurnila Marli Kesuma, Latifah Rahayu and Edy Fradinata

283 Religious Tourism: Concept of Community-Based Tourism inAceh Singkil, IndonesiaAnismar, Deddy Satria and Muhammad Ali

289 The Contribution of Revenue and Consumption Cost of Soybean Farmers in MuaraBatu Subdistrict Aceh UtaraMartina, Nurasih Shamadiyah and Riyandhi Praza

295 The Composition of Women Parliament Members Presence in Local Parliament inAceh (A Case Study at Provincial Parliament of Aceh Province During the Period of2014 to 2019)Ainol Mardhiah, Dadang Rakhmat Hidayat, Agus Rahmat and Nuryah Asri Sjafirah

303 Personal Branding Tri Rismaharini the Provision in MediaSusanne Dida, Yanti Setianti and Gadys Fatihah


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309 Analysis of Factors Affecting the Poverty Level of Farmers Post-Tsunami in AcehAdhiana, Zuriani and Eka Maida

317 Dimension of an Islamic Model Value on the Existence of SyariahWaltmartIskandar Muda and Windari

323 Batik Jambi Promotion Based on Social Media in Asean Economics CommunityDahmiri, Sigit Indrawijaya, Raja Sharah Fatricia and Anita Yasmin

331 Islamic Banks in Indonesia: Analysis of EfficiencyAnwar Puteh, Muhammad Rasyidin and Nurul Mawaddah

337 Design of Information Monitoring System Flood Based Internet of Things (IoT)Dedi Satria, Syaifuddin Yana, Rizal Munadi and Saumi Syahreza

343 Economic Development and Access to Fish Resources: A Review Sociology onFisherman’s Production Access in Kuala Langsa, AcehNirzalin, Ibrahim Chalid and Yogi Febriandi

349 Dynamics and Prospect ofWali Nanggroe Institution Post-Conflict in Aceh: Analysisof Policy and Educational DevelopmentDahlan A. Rahman and Nuriman Abdullah

355 LearningManagement of Bahasa in Senior High SchoolsJuni Ahyar and Rasyimah

361 The Difference in the Antimicrobial effect of Katuk Leaf Extract (SauropusAndrogynus (l.)Merr.) Concentration against Escherichia ColiCut Asmaul Husna, Al Muqsith and Soya Loviana Hasibuan

367 City Branding of Denpasar City as a Creative City Through the Denpasar FestivalEventYanti Setianti, Susanne Dida and Ni Putu Cynthia Uttari Putri

373 Semantics Equivalence of Cultural Terms of Meurukon Texts Translated fromAcehnese into IndonesianNurlaila, Syahron Lubis, Tengku Sylvana Sinar and Muhizar Muchtar

381 Preparation of Activated Carbon From Banana (Musa acuminate L.) peels for CarbonMonoxide AdsorptionVera Viena, Elvitriana, Muhammad Nizar, Sari Wardani and Suhendrayatna

Contents

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387 Thermal Behavior of Modified Thermoplastic Starch (TPS) Synthesized from Sago(Metroxylon Sagu) with Diphenylmethane Diisocyanate and Castor OilRozanna Dewi, Nasrun Ibrahim, Novi Sylvia, Dahlan Abdullah and Medyan Riza

395 Typhoid Fever Profiles at Cut Meutia Hospital, North Aceh, Indonesia, in 2016-2017Mauliza and Julia Fitriany

401 Student Radicalism Ideology Prevention Strategy: A Study at an Islamic BoardingSchool in Jabal Nur, North Aceh, IndonesiaSubhani, Ahmad Yani, Awaludin Arifin, Ti Aisyah, Kamaruddin and Teuku Alfiady

409 Implementation of Task-Based Learning for Non-English Students: A Practice inMalikussaleh UniversitySaifullah and Syamsuddin

415 Design of Wild Animal Detection and Rescue System with Passive Infrared andUltrasonic Sensor based MicrocontrollerYusman, Aidi Finawan and Rusli

423 Policy of Educational Budget Aceh RegencyNaidi Faisal, Nurhafni, Putri Murdiana and Zulhilmi

429 Foreign Direct Investment Inflow into Aceh province of Indonesia After a PeaceAgreementAzhari Yahya

437 Design ofWeb Based FireWarning System Using Ethernet Wiznet W5500Sri Safrina Dewi, Dedi Satria, Elin Yusibani and Didik Sugiyanto

443 Sari Cincau Ngrayun Equals with Modern Ready-to-Drink BeverageTiti Rapini, Umi Farida and Adi Santoso

451 The Status of Conservation of Mangroves in the Krueng Reuleng River Area,Leupung, Aceh Besar Regency, IndonesiaAfkar and Nadia Aldyza

457 Analysis of Understanding the Level of Vibration and the Wave Concept with aDemonstration Method for Students in SMAN 1 Peureulak, AcehTeuku Hasan Basri, Nuraini and Adi Bejo Suwardi

461 Screening of Volatile Organic Compounds Using Gore-Sorber Method for PredictingHydrocarbon GenerationSutrisno, Rayandra Asyhar, Wimpy Prendika, Hilda Amanda and Fachrur Razi


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467 Incorporating Peace Education into Aqidah Akhlak Subject in East AcehSuadi, Saifuddin and Fadli

473 Learning Motivation of Peripheral University Students and its Relation with theirEnglish GradesTeuku Azhari and Ema Dauyah

479 Thermal Cracking of Low Temperature Conversion on Low Density PolyethylenePlastic Waste for Liquid HydrocarbonHeriyanti, Lenny Marlinda, Rayandra Asyhar, Sutrisno and Marfizal

487 Correlation of Lead and Zinc Contents in Sediments and Faunus Ater AgainstFaunus AterDensity in Reuleung River, Leupung, Aceh BesarRahmi Agustina, M. Ali S, Ferdinan Yulianda and Suhendrayatna

497 The Correlation between Stress Level and Degree of Depression in the Elderly at aNursing Home in Lhokseumawe in the Year 2017Yuziani and Meutia Maulina

503 Effect of Palm Oil Bunches Microfiller on LDPE-recycled Composite Tensile StrengththroughMelt Blending ProcessZulnazri and Sulhatun

511 CSR and Profitability in IDX Agricultural SubsectorsGhazali Syamni, Wahyuddin, Damanhur and Ichsan

519 The Crown Witness and the Protection of Human Rights in Criminal LawVerificationZulfan

525 Design and Implementation of SCADA Wireless Communication System forMonitoring the Performance of Microhydro Power Plant Based on Protocol AX.25Salahuddin, Bakhtiar, Yusman and Fadhli

533 Production of Lipid Biomass in Locally Isolated Microalga Cultivated in Palm OilMill Effluent (POME)Elvitriana, Erman Munir, Delvian and Hesti Wahyuningsih

539 An Analysis and Design of a Virtual Collaboration Information System of the JamuSupply Chain Network Based on a Fair Adaptive ContractAster Aryati Rakhmasari and Dian Anwar

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547 Adsorption of Manganese (II) Ion in the Water Phase by Citric Acid ActivatedCarbon of Rice HuskSuhendrayatna, Muhammad Zaki, Annisa Delima Habdani Harahap and FitrianiVerantika

555 Eco-informatics: The Encouragement of Ecological Data ManagementMuhammad Arhami, Anita Desiani, Munawar and Raisah Hayati

563 Challenges in Designing ESP Course for First Year Students of Engineering Facultyat Malikussaleh UniversityRasyimah, Juni Ahyar and Dewi Kumala Sari

569 Isotherm and Kinetics of Cd(II) Adsorption by Durian (Durio zibethinus) seedImmobilized into Ca-alginateIntan Lestari

575 Science, Technology, Engineering, and Mathematics (STEM) Learning on Student’sScience Process Skills and Science AttitudesSri Setiawaty, Nuraini Fatmi, Ayu Rahmi, Ratna Unaida, Fakhrah, Izkar Hadiya,Iryana Muhammad, Mursalin, Muliana, Rohantizani, Alchalil and Ratih Permana Sari

583 Effect of Perception of Facilities, Intensity of Conduct, and Satisfaction of Tax Payersto Submission of Letter by E-Filing Notice on Tax ServiceMuammar Khaddafi, Henry Aspan, Mohd. Heikal, Wahyuddin, Falahuddin andZatinHumaira

589 Aceh: Conflict Development after the Helsinki AgreementIskandar Zulkarnaen and Ella Suzanna

595 The Discretionary Accrual in the Financial Statement of a Public Company inIndonesia: A Literature ReviewMuhammad Haykal

601 Inventory and Morphological Characterization of Durian (Durio Zibethinus) inLangkahan and Sawang Sub-District of North Aceh IndonesiaRd. Selvy Handayani and Ismadi

609 Model of Sustainable Electrical Power Management: Lamp Efficacy of the NationalStreet Lighting in North Sumatera ProvinceJanter Napitupulu, Herman Mawengkang, Usman Ba’afai and Nasruddin M.N.

621 Hamming Index for Some Classes of Graphs with Respect to Edge-Vertex IncidenceMatrixWilda Sitorus, Saib Suwilo and Mardiningsih


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629 Electrical Automation of Solar Cell-Based Arduino UnoWith 16�2 LCD DisplayMohammad Irfan Fahmi, Hidayatullah, Jhonson Efendi Hutagalung and SajadinSembiring

641 Concept Designs of Patient Information Security Using e-Health Sensor ShieldPlatform on Blockchain InfrastructureSyrahril Efendi, Baihaqi Siregar and Heru Pranoto

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Article information:To cite this document: "Prelims" In Proceedings of MICoMS 2017. Published online: 11 Jul 2018; x-xi.Permanent link to this document:https://doi.org/10.1108/978-1-78756-793-1-00101

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https://doi.org/10.1108/978-1-78756-793-1-00101

Introduction

On behalf of the Organizing Committee, we are delighted to welcome all participants to theMalikussaleh International Conference on Multidisciplinary Studies (MICoMS 2017) whichtook place from November 26-28, 2017. This conference is a Multidisciplinary Studies whichwas held in Lhokseumawe, Aceh, Indonesia. With a very interesting program, this forumbecame the main medium of discussion, dissemination and research achievement in relatedfields with the theme: “Strengthening Capacity and Competency to Develop ASEANEconomic Community”.

Nearly 200 academics, researchers, practitioners and presenters from 5 countries havegathered and 154 papers have been submitted in this year's conference. Each paper wasreviewed with tight criteria from our invited and voluntary multi-national reviewers. Basedon the review results, 100 papers have been accepted, which lead to an acceptance rate of64.93%. All accepted papers were orally presented in 4 technical sessions andwas publishedin the conference proceeding.

The conference is a prestigious event that would not have been successful withoutextensive effort from many volunteers. I would like to express my sincere appreciation andthanks to all participants and supporters, especially the members of the Institute forResearch and Community Service of Malikussaleh University, and The International AffairsOffice of University of Malikussaleh. We would also like to thank for all keynote speakers,who were willing to meet the MICoMS invitation. My sincere gratitude to Rector ofUniversity of Malikussaleh, Prof. Dr.H. Apridar, SE., M.Si and Institute for Research andCommunity Service of Malikussaleh University, Mr. Yulius Dharma, S.Ag., M.Si.

I would also like to give my appreciation to many others who are involved in the successof this event, including the reviewers, student volunteers, and staff at the University ofMalikussaleh.

Lastly, on behalf of the organizing committee, I would like to welcome you to our firstinternational conference on Multidisciplinary Studies at Malikussaleh University. Our hopeis that you have an enjoyable and inspiring moment during our conference. Thank you foryour participation onMICoMS 2017.

Organizing CommitteeMICoMS 2017

Prof. Dr. HermanMawengkangDr. Khalsiah

Sajadin Sembiring, S.Si, M.Comp.Sc


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Introduction

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Article information:To cite this document: "Prelims" In Proceedings of MICoMS 2017. Published online: 11 Jul 2018;xiii-.Permanent link to this document:https://doi.org/10.1108/978-1-78756-793-1-00103


Users who downloaded this article also downloaded:(2018),"Prelims", Emerald Reach Proceedings Series, Vol. 1 pp. i-ix(2018),"Introduction", Emerald Reach Proceedings Series, Vol. 1 pp. x-xi






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Acknowledgement

We have completed the international conference, Malikussaleh International Conference onMultidisciplinary Studies 2017 (MICoMS), which was conducted as the media to share theresearch results across the disciplines of study. There were 154 papers submitted, 132 ofthemwere eligible to be presented at the conference, and only 100 papers can be published inEmerald Publisher. The papers were submitted by lecturers, students and researchers fromMalikussaleh University and various universities throughout Indonesia and 5 countries.

We would like to thank all contributors to this proceeding, the keynote speakers, scientificreviewers, and the committee who have helped in the preparation and the organization of theconference, and great appreciation also goes to the publisher, Emerald.

We do hope that the proceedings can contribute to the development of science andtechnology and it is expected that there will be more conferences to be held in the future.

Yulius Dharma, S.Ag.,M.SiDean of Institute for Research and Community Service, Malikussaleh University

Acknowledgement

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Article information:To cite this document: "Prelims" In Proceedings of MICoMS 2017. Published online: 11 Jul 2018;xii-.Permanent link to this document:https://doi.org/10.1108/978-1-78756-793-1-00102


Users who downloaded this article also downloaded:(2018),"Introduction", Emerald Reach Proceedings Series, Vol. 1 pp. x-xi(2018),"Prelims", Emerald Reach Proceedings Series, Vol. 1 pp. i-ix






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Acknowledgement

Malikussaleh University, in accordance with the vision and missions in the field of researchand community services as parts of three main pillars of higher education, is expected to beable to improve the quality of education, to conduct research, and to produce high qualityresearch outcomes. Proceedings of Malikussaleh International Conference on MultidisciplinaryStudies (MICoMS 2017) is structured as a form of appreciation towards the results of researchand community service conducted by academics from various higher educational institutions.

We believe that well-planned and well-programmed research will generate outcomes thatcan make a real contribution in science and technology and enrich this knowledge in variousways. In 2019, Malikussaleh University plans to become a research-based university and tobe one of the research contributors to the scientific community. In the future, it is expectedthat there will be more proceedings to be published as we plan to conduct more conferencesfor various fields of study. Therefore, we strongly support the publication of this proceeding.

We thank Institute for Research and Community Service of Malikussaleh University asthe executor of MICoMS 2017, Indonesian Mathematics Society (IndoMS), and other partiesthat have contributed to the organization and success of this international seminar. Finally,we wish to thank the contributors to the proceedings of Malikussaleh InternationalConference onMultidisciplinary Studies (MICoMS) 2017.

Prof. Dr.H. Apridar, SE., M.SiRector of Malikussaleh University


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Article information:To cite this document: "Prelims" In Proceedings of MICoMS 2017. Published online: 11 Jul 2018;xiii-.Permanent link to this document:https://doi.org/10.1108/978-1-78756-793-1-00103


Users who downloaded this article also downloaded:(2018),"Prelims", Emerald Reach Proceedings Series, Vol. 1 pp. i-ix(2018),"Introduction", Emerald Reach Proceedings Series, Vol. 1 pp. x-xi






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https://doi.org/10.1108/978-1-78756-793-1-00103

Acknowledgement

We have completed the international conference, Malikussaleh International Conference onMultidisciplinary Studies 2017 (MICoMS), which was conducted as the media to share theresearch results across the disciplines of study. There were 154 papers submitted, 132 ofthemwere eligible to be presented at the conference, and only 100 papers can be published inEmerald Publisher. The papers were submitted by lecturers, students and researchers fromMalikussaleh University and various universities throughout Indonesia and 5 countries.

We would like to thank all contributors to this proceeding, the keynote speakers, scientificreviewers, and the committee who have helped in the preparation and the organization of theconference, and great appreciation also goes to the publisher, Emerald.

We do hope that the proceedings can contribute to the development of science andtechnology and it is expected that there will be more conferences to be held in the future.

Yulius Dharma, S.Ag.,M.SiDean of Institute for Research and Community Service, Malikussaleh University

Acknowledgement

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Proceedings of MICoMS 2017Foreign Direct Investment Inflow into Aceh province of Indonesia After Peace AgreementAzhari Yahya,

Article information:To cite this document: Azhari Yahya, "Foreign Direct Investment Inflow into Aceh province ofIndonesia After Peace Agreement" In Proceedings of MICoMS 2017. Published online: 11 Jul 2018;429-435.Permanent link to this document:https://doi.org/10.1108/978-1-78756-793-1-00067

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https://doi.org/10.1108/978-1-78756-793-1-00067

Foreign Direct Investment Inflowinto Aceh province of Indonesia

After Peace AgreementAzhari Yahya

Faculty of Law, Syiah Kuala University, Banda Aceh, Indonesia

AbstractPurpose – This study aims to explain current condition of investment inflow into Aceh Province ofIndonesia after peace agreement between Free Aceh Movement and the Government of Indonesia wasresolved. This peace agreement was achieved after both parties were involved in political conflict for threedecadesMethodology – This study applies qualitative methods by using descriptive approach. Data required forthis study were obtained from library research by analyzing primary and secondary resources. Primaryresources were collected by analyzing current literature. Secondary resources were obtained by reviewingsome previous research report, government report and other institution report which are related to this study.All collected data were analyzed by using qualitative analysis.Findings – The results indicate that investment inflows into Aceh Province after a peace agreement havesignificantly increased. This condition is caused by better investment condition after Free Aceh Movementand the Government of Indonesia agree to seek a peaceful resolution through a peace agreement. It has beennoted that political conflict in Aceh had occurred from 4th December 1976 until 15th August 2005. Prior to15th August 2005 most investors were reluctant to invest in Aceh because unsecure conditions were rampanteverywhere.Better investment inflow into Aceh after peace agreement is also motivated by the enactment ofLaw Number 11 of 2006 on the Governance of Aceh. By having this law the Government of Aceh has morepower to manage and attract new investment to be invested in Aceh Province. This law provides more spacesfor the Government of Aceh to provide adequate incentives and interesting facilities for certain sectors ofinvestment to attract more inward FDI. Therefore, it is suggested that the Government of Aceh shouldmaintain stable political condition to attract more investment inflows into Aceh in the future.

Keywords Investment, Peace Agreement, Aceh Province

All papers within this proceedings volume have been peer reviewed by the scientific committee of theMalikussaleh International Conference on Multidisciplinary Studies (MICoMS 2017).

1. IntroductionForeign direct investment (FDI) is one of the important elements for economic developmenteither for developed or developing countries. It also plays an important role in developingeconomic growth in both countries, namely the ‘home country’ (FDI provider) and ‘hostcountry’ (FDI recipient). Spin-off benefits emerge in this line of thinking. From the hostcountry’s perspective, FDI is considered as a means of acquiring technologies, skills and

© Azhari Yahya. Published in the Emerald Reach Proceedings Series. Published by EmeraldPublishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0)licence. Anyone may reproduce, distribute, translate and create derivative works of this article (forboth commercial and non-commercial purposes), subject to full attribution to the original publicationand authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

Foreign DirectInvestment

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Emerald Reach Proceedings SeriesVol. 1

pp. 429–435EmeraldPublishingLimited

2516-2853DOI 10.1108/978-1-78756-793-1-00067

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access to international markets as well as a means of entering into a dynamic foreign tradeand production system (Yahya, 2016). FDI may strengthen economic development in thehost country through various means such as capital flows, employment creation, technologytransfer andmultiple spill over impacts.

FDI inflow has steadily increased since 1980s due to conducive investment atmosphereoccurs around the world. UNCTAD (2016) reported that the aggregate FDI inflow over thelast two decades have grown remarkably. Among FDI inflows around the world, majority ofthem flow to developed countries and the rest flow to developing countries. It is proofed thathigher FDI inflow into developed countries are associated with better location determinantsowned by these countries. The amount of FDI inflow into the host countries depend on thelocation advantages owned by these countries. Therefore, it is not surprising Indonesia as adeveloping country receives less inward FDI compared to other countries such as China,India and Japan because location determinants owned by these countries are much bettercompared to Indonesia.

Similarly, in national scope Aceh Province which is located in the far western part ofIndonesia receives less inward FDI compared to other provinces in Indonesia such as NorthSumatera, DKI Jakarta, West Java, East Java and South Selawesi Province. This condition iscaused by better location determinants owned by these provinces compared tolocationdeterminants owned by Aceh (Yahya, 2007). According to Dunning FDI Theory (1993), oneof location determinants that may determine FDI inflow from the home country to the hostcountry is political stability or political conflict in the host country. Aceh as the hostprovince for FDI inflow into Indonesia had suffered a long period of political conflictbetween Gerakan Aceh Merdeka (the Aceh Free Movement – hereinafter called GAM) andIndonesian Government from 1976 to 2005 (George, 2010).

During this political conflict period the amount FDI inflow into Aceh was totally low dueto unsecured political condition that occurred in this province. In foreign investor’sperspective unsecured political condition in the host country becomes one of the mostimportant determinants that might be taken into account before investment decision ismade. Therefore, it is quite reasonable if there were very few foreign investors invested theircapital in Aceh Province during political conflict took place. Fortunately this conflict wasresolved after both parties GAM and Indonesian Government agreed to sign a peaceagreement in Helsinki on 15th August 2005 to end all political battle between them.According to FDI theory this peaceful condition may influence the amount of FDI inflowinto Aceh Province. Therefore, this study is aimed to explain the current condition of FDIinflow into Aceh Province after a peace agreement between GAM and IndonesianGovernment was signed.

2. MethodsThis study applies qualitative methods by using descriptive approach. Data required forthis study were obtained from library research by analyzing primary and secondaryresources. Primary resources were collected by analyzing current literature. Secondaryresources were obtained by reviewing some previous research report, government reportand other institution report which are related to this study. All collected data were analyzedby using qualitative analysis.

3. Finding and discussionAceh is known as a province which has enormous natural resources. With huge resourcewealth makes Aceh becomes one of Indonesia’s most favourable FDI destinations, especiallyfor foreign investors. Among the natural resources to be found in the province are oil, gas,


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limestone, timber, iron, and gold. In the agricultural sector, this province also has rice, coffee,cocoa, coconut, corn, pepper, sugar cane and tobacco. The first three have been the largestcommercial sectors in Aceh economy since the colonial period (Yahya, 2014). Moreover, thisprovince also owns extensive marine resourcesconsisting of territorial water and exclusiveeconomic zone. All these resources mean that Aceh has been able to supply enormouswealth to the central government of Indonesia through various FDI projects spread aroundthe province. Even though this province is rich in resources, it remains one of the poorestparts of Indonesia. Around 85% of the total Acehnese population work in agriculture, whilethe rest look to various sectors such as trading, industry and paid labour for their mainlivelihoods (Yahya, 2014).

Aceh was given special power through Law Number 11 of 2006 to manage its own FDIregime. This law was the response of Indonesian central government to a long historicalconflict with the separatist movement known as GAM. As a result of this change, thegovernment of Aceh is able to run the government affairs in all sectors except for monetary,fiscal policies, foreign affairs, judiciary and religious affairs. These powers are kept by thecentral government ensure that Aceh remains as an integral part of the Indonesian state.Despite these residual powers held by Jakarta, the government of Aceh now has more powerto create its own policies in any sector including FDI. As a result, provincial FDI policiesbegan to reflect local conditions. In other words, the Acehnese government has been givenfull authority to create local policies to attract more inward FDI to enhance provincialdevelopment and administer the development of these policies. Now Aceh has power todecide which projects to be approved when issuing investment licences either to domestic orforeign interests, and any conditions attached to investment in the region.

The law more generally reflects a highly significant change in the distribution of powerbetween Aceh and Jakarta. Amongst other things, the government of Aceh could now createincentives to attract foreign investors using various instruments including lower tax rates,tax holidays and joint-venture agreements between the foreign company and localgovernment of Aceh. Few years after the introduction of Law Number 11 of 2006, thegovernment of Aceh enacted a local government regulation (using the Arabic nomenclatureQanun) Number 4 of 2013. This Qanun requires district governments in Aceh to treat allinvestors, whether domestic or foreign, in the samemanner.

Referred to the Law Number 25 of 2007 on Investment, the most significant additionscreated by the government to facilitate investment are in the following forms: (a) taxreductions, (b) free import fees, (c) tax free status to all imported goods which are related toinvestment in Aceh as well as freedom from export taxes to all finished goods produced inAceh, (d) infrastructure facilities to support investment as well as immigration services forforeign investors and their staff, and (e) various fiscal facilities. All these measuresdemonstrate the degree to which the government of Aceh is placing its hopes on FDI toenhance provincial development. The result has shown that the government of Aceh hasbeen highly committed to facilitate FDI activities. The increase in incoming FDI suggeststhat the provincial government has been successful in this regard.

Aceh has been open to FDI since 1967, when the government of Indonesia passed theLaw Number 1 of 1967 on Foreign Direct Investment and now this law has been replaced bythe Law Number 25 of 2007 on Investment. Since then many foreign investors have come toexplore the natural resources in Aceh. After quick exploration, some foreign companiesbegan to invest their capital in this province especially in oil, gas, timber and agriculturalsectors. Table 1 shows the total FDI inflow into Aceh Province since 1968.

Table 1 shows that FDI inflows into Aceh have fluctuated dramatically between 1968and 2011. Significant inflows were followed by years when there was no foreign investment


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at all. One of the main factors behind these fluctuations was the tragic political conflictbetween GAM and Indonesian government. The GAM insurgency was the definingcharacteristic of Aceh from 1967 to 2005. The first flow of FDI into Aceh stimulated theinsurgency and included investment by the US oil company Exxon Mobil, which exploredfor oil and gas in the northern part of Aceh. Problem arose because of unequal profit-sharingarrangement between the region and the central government. At that time, under theSoeharto regime, the profit-sharing system from such natural resources exploitationspecified that all profits should go to Jakarta first. In a second step, the central governmentwould then redistribute these profits to all provinces equally based on population amount(Jaya, 2007).

As a result, Aceh which has a very low population, only received a very small portionfrom the ‘big oil cake’ when compared with the portion received by the provinces in JavaIsland, a more densely populated region. This condition created a sense of locality-basedinjustice amongst the Acehnese people. As they saw it, resources from the region were beingsold for the benefit of people elsewhere in Indonesia. This condition shows that how FDI

Table 1.FDI Inflow Into AcehProvince

Years Amount (US $)

1968 23,161,0001969–1979 N/A1980 200,088,0001981 18,386,4801982–1985 N/A1986 5,900,7121987–1988 N/A1989 200,000,0001990 373,000,0001991–1992 N/A1993 257,003,0001994 3,656,0751995 30,217,2501996 141,303,7101997 355,299,5001998 4,054,7561999 5,699,1602000 535,613,5142001–2003 N/A2004 5,0002005 3,000,0002006 N/A2007 17,359,7192008 N/A2009 359,0002010 40,990,0002011 367,049,0002012 235,198,0002013 153,444,0002014 331,189,0002015 697,874,0002016 8,963,362,000

Source: Aceh Investment Board 2017


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project caused protests to arise in Aceh. Event took a tragic turn when the protests turnedinto an ethnic separatist movement.

Subsequently, in 1976 a number of Acehnese, under the leadership of MuhammadHasanTiro, established the GAM separatist movement. After a long negotiation process thisconflict ended through a peace agreement process known as the Helsinki Accord, which wassigned between the Indonesian government and the GAM in Helsinki on 15 August 2005(Barron and Burke 2008, Aspinall, 2009; Ziegenhain 2010; Kingsbury 2010; George 2010).The conflict had been a long and bloody one (perhaps up to 15,000 people were killed), andhas left many traces in contemporary Aceh. The civil strife had a significant negativeimpact on inward flow of FDI into Aceh. The data above showed that after 1968, the year inwhich FDI first came to Aceh, was no more foreign investment in that province until 1979.From 1979, foreign investors remained uncertain about the security of their investments,with the result that years of large inflows oscillated with years of small or no inflow.

When FDI inflow increased, they were frequently in response to government incentives.For example, in 1980–1981 some FDI returned to Aceh after the governor of Acehguaranteed the security of foreign companies. Despite the sporadic violence caused by thepolitical conflict, FDI inflows into Aceh started to rise in 1989 as a response to bettereconomic growth in Aceh as a whole. This condition also confirms the study conducted byAjide (2017) showing that higher economic growth in the host country may attract moreinward FDI from overseas. As Table 1 shows, FDI then again collapsed in the early 1990sbut then intermittently recovered, only to collapse again right up to 2011. In that period, theglobal financial crisis severely hit the economy of Aceh, resulting in less inward FDIinvestment in 1998 and 1999. After that FDI inflow steadily increases until 2017.

In short, it is undeniable that FDI represents many key arguments in favour of capitalmobility. Seen from a macroeconomic point of view, it would be hard to deny that FDIprojects have brought some significant benefits for economic development such asincreasing national revenues, increasing per capita Gross Domestic Product and bettereconomic growth in the recipient countries. However, this kind of development is highlycontested by other actors, especially those touched by the local effects of FDI projects. InAceh Province, the right to exploit natural resources had a role in the long political conflictbetween the Indonesian Government and GAM by which this conflict had caused enormouslost. Upon the thawing of that conflict, the central government of Indonesia gave specialautonomy to the government of Aceh to deal directly with foreign investors.

These effects frequently lead to tensions that cause social conflict between the foreigncompany (representative of FDI) and local communities who are living in the area where thecompany operates. This tension pits local interests against national ones: extractiveindustries such as oil, gas and mining promise great financial benefits that registerpositively on the national balance sheet. Yet these industries frequently cause trouble suchas environmental degradation, land disputes and social conflict. Even though theseactivities might increase government revenues at the national level, at the local level thisextraction can result in massive social resistance from local communities.

Moreover, in some cases, this social hostility could cause massive grass-roots politicalmovements that might contest the supremacy of central government in the host country. Acelebrated example was the unequal distribution of oil revenues which became a source ofconflict between the government of Sudan and the Sudanese People’s Liberation Army/Movement (SPLA/M). In this case, the main cause underpinning the conflict was unequalprofit sharing received by local people living in the province where the oil was extracted(Patey, 2006). The disagreement stirred up regional and centre tension. A similar situationalso emerged in Aceh.


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There are also many other countries that have experienced similar conflict situations as aresult of the operation of foreign companies within their borders such as Columbia, Angola,the Democratic Republic of Congo, the Caucasus, Myanmar, Bolivia, and Mexico. In thesecountries, foreign companies have been identified as factors behind many social conflictsand even civil wars. In these cases, FDI may exacerbate an existing tense relationshipbetween national governments and local people in regions where natural resources such asoil, gas, timber, diamonds and precious metals are extracted (Patey, 2006).

In short, it can be highlighted that countries which are dependent on oil and mineralwealth face a much higher danger of social conflict and even civil war than the countrieswhich are poor in resources. In other words, countries which are heavily dependent on theexport of oil and minerals extracted by foreign companies face a high risk of social conflictor civil war. This civil war was caused by the unequal sharing of profits from naturalresource extraction between central government and local communities. These conditionsalso frequently happen in Aceh after foreign investors come to invest in this province.

4. ConclusionIt can be concluded that FDI has played an important role in strengthening economicdevelopment in Aceh Province as the host province of FDI destination. Aceh has receivedFDI inflow since 1968 and continues to receive the same FDI scheme until now. The numberof FDI inflow into Aceh has fluctuated all the times due to unsecured political condition thatoccurs all the times in this province. During political conflict period the total amount of FDIinflow into Aceh Province was very low. In this period of time GAM wanted Aceh to beindependence from Indonesia so that Aceh can manage its own natural resources freely.However, Indonesian government totally disagree with this idea so that political conflictbetween both parties cannot be avoided. The impact of this conflict was that very fewforeign investors invested their capital into this province so that economic developmentduring this period was very slow. Fortunately FDI has been recovered after thepeaceagreement has been achieved by both parties. Since then FDI starts to flow fromvarious countries to Aceh Province with various sectors of investment. As a result economicdevelopment has grown significantly and more new jobs have been created. This fact showsthat political stability as one of FDI determinants play significant role in attracting inwardFDI into Aceh Province. It means that FDI inflow into Aceh returns to normal after a peaceagreement has been achieved. By then investment inflow into Aceh Province after a peaceagreement has significantly increased. This condition is caused by better political stabilitythat occurs after a peace agreement has been achieved. Finally, it is suggested that theGovernment of Aceh should maintain stable political condition to attract more investmentinflows into Aceh in the future.

ReferencesAjide, FM (2017), “Firm-specific and institutional determinants of corporate investments in Nigeria”,

Future Business Journal, Vol. 3, pp. 107–118.Aspinall, E 2009, Islam and Nation: Separatist Rebellion in Aceh, Indonesia, Stanford University Press,

Stanford USA.Barron, P and Burke, A (2008), Supporting peace in Aceh: Development agencies and international

involvement, East-West Center, Washington DC

Dunning, J (1993), Multinational enterprises and the global economy, Addison-Wesley, Wokingham,England.


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George, K M 2010, “Picturing Aceh: Violence, religion and painter's tales” in Arndt Graf, SusanneSchroter & Edwin Wieringa (eds), Aceh: History, Politics and Culture, ISEAS Publishing,Singapore, pp. 243–264.

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Yahya, A (2007), “The location determinants and provincial distribution of Foreign direct investment inIndonesia”, Research Report, School of Economics and Governance, Australian NationalUnivesity.

Yahya, A (2014), “Foreign Direct Investment and locality: A case study of French Multinational inAceh, Indonesia”, PhD Thesis, Monash University, Australia.

Yahya, A (2016), “Location determinants of foreign direct investment in Indonesia”, Proceeding ofInternational Conference on Economics and Business, Gajahmada University, YogyakartaIndonesia Vol. 4 (1), pp. 322–345.

Ziegenhain, P (2010), “The Aceh conflict during the new order and the following democraticzationprocess” in in Arndt Graf, Susanne Schroter, Edwin Wieringa (eds), Aceh: History, Politics andCulture, ISEAS Publishing, Singapore, pp.120–134.

Corresponding authorAzhari can be contacted at [email protected]


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