Aceh
Aceh: Indonesia's only Sharia law province received $7.9B+ in autonomy funds since 2005 but remains Sumatra's poorest—expires 2027.
Aceh is Indonesia's laboratory for Sharia economics—the only province where Islamic law is officially implemented. Following the 2005 Helsinki peace accord that ended a thirty-year separatist conflict, Aceh received special autonomy status and twenty years of central government funding (2008-2027), totaling over $7.9 billion. Yet despite this investment, Aceh remains the poorest province in Sumatra, with economic growth consistently lagging the island's average.
The province's 5.55 million residents (2024) have witnessed fundamental economic restructuring. Oil and gas, once the economy's engine, have declined substantially. Agriculture, fisheries (27% of GRDP), and transportation now dominate. The 2018 Qanun on Shariah Financial Institutions requires all financial operations to follow Islamic principles—a regulatory experiment unique in Indonesia. Research shows this framework has triggered consistent investment growth, with West Aceh seeing 143% investment increase in 2024 and Saudi consortiums showing interest in 2025.
Digital Sharia finance is expanding: QRIS adoption in Islamic transactions, Sharia-based mobile banking, and e-commerce integration. Poverty declined by approximately 100,000 people from March 2024 to March 2025. Yet the fundamental paradox persists: massive funding hasn't translated into development parity. The special autonomy funds expire in 2027, creating an impending fiscal cliff. Aceh's experiment tests whether religious-economic frameworks can drive development or whether institutional challenges overwhelm policy innovation.