This brief calls for urgent government action on inequality. The issue has always been important elsewhere, but this is even more so in the case Aceh. Growth was not spread evenly, poverty remains high and inequality has increased overtime. There are cases where the contrast between the populations is quite dramatic. For instance, highest incidence of poverty was found in resource rich districts, inter ethnic disparity in agricultural land holding increased, both inflation and wages shot up rapidly during the post tsunami era (especially in Banda Aceh ).

What raises serious concern is that the above trend is set within the fragile social, political and economic background. The consolidation of peace, democracy and development in Aceh is still in flux and therefore it cannot and should not be taken for granted. The challenge is to mitigate various forces of social division in Aceh such as between the have and the have-nots, the GAM leaders and the ex combatants, the GAM and the rest, the
Acehnese and the Javanese, the resource rich regions and the rest, those that support the sharia and those who do not, and so on.

Reducing inequality within this context is then crucial; it would sustain development by simultaneously promoting social and political stability. The case is urgent, the stake is high but opportunities are also plenty. The consequence of the special autonomy law in Aceh, later also the LOGA, is that there is a massive central government transfers to various levels of local government. The revenues will continue for a considerable period of time and the amount is relatively large and would be more than compensate the d windling oil and gas revenues.

But local government policy needs to change. Recent trend in government expenditure has not been encouraging. Most of the extra resources for Aceh were spent on public consumption and the creation of new districts and less on public goods. More public goods are needed for the Acehnese so that they are capable to participate more meaningfully in the economic, social and political processes. So is also with employment creation and poverty reduction.