ADDRESS
OF
THE PRESIDENT OF THE REPUBLIC OF INDONESIA
ON
NATIONAL DEVELOPMENT IN REGIONAL PERSPECTIVE
BEFORE THE SPECIAL PLENARY SESSION OF
THE HOUSE OF REGIONAL REPRESENTATIVES OF
THE REPUBLIC OF INDONESIA
OF
THE PRESIDENT OF THE REPUBLIC OF INDONESIA
ON
NATIONAL DEVELOPMENT IN REGIONAL PERSPECTIVE
BEFORE THE SPECIAL PLENARY SESSION OF
THE HOUSE OF REGIONAL REPRESENTATIVES OF
THE REPUBLIC OF INDONESIA
JAKARTA, 19 AUGUST 2009
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Bismillahirrahmanirrahim,
Assalamu’alaikum warahmatullahi wabarakatuh,
Greetings to all,
Honorable Speaker, Vice Speakers and Members of the House of Regional Representatives of the Republic of Indonesia,
Distinguished Chairmen, Vice Chairmen and Members of the State Institutions,
Excellencies Ambassadors and Heads of International Agencies and Organizations,
Distinguished Governors, Regents and Mayors and Speakers of the Regional House of Representatives of the Provinces, Regencies and Municipalities,
Fellow Countrymen,
Distinguished Ladies and Gentlemen,
Let us together, once again, send our high praise and gratitude to God the Almighty, Allah SWT, because of His blessings and grace are we able to attend this Special Plenary Session of the House of Regional Representatives of the Republic of Indonesia of 2009. I would like to avail myself of this auspicious and, God willing, insya Allah, filled with grace opportunity to express my thanks to the House, which has accorded me with this chance to deliver the State Address on the National Development, primarily about Regional Development.
This is my third state address before the parliament in this month, in a series of Presidential State Addresses to the Indonesian people. On the 3rd of August 2009, I have submitted the Draft State Revenue and Expenditure (RAPBN) of Fiscal Year 2010 and its Financial Note before the Extraordinary Plenary Session of the House of Representatives (DPR), which was also attended by the Leaders and Members of the House of Regional Representatives (DPD). Therefore, I do not have to repeat what I had described in that address. Subsequently, on the 14th of August, I have delivered the State Address on the occasion of the 64th Anniversary of the Proclamation of Independence of our Country, as a reflection of the history and journey of the Indonesian nation. And, thank God, alhamdullilah, today I am able to deliver this address before the leaders and members of the House (DPD), which is also attended by the Governors, Regents and Mayors from all over Indonesia, on the aspects and dynamics of our development.
Today’s address is also my last for the 2004-2009 term of office. On next 20th of October, the government that I am leading, seconded by Vice President Muhammad Jusuf Kalla, will come to an end and a new government will start its mandate for the subsequent 5-year period. For this reason, therefore, in this address I would like to invite all of you to conduct a reflection on the journey of our development during the past 64 years as an independent Indonesia, especially during the last 5 years. Furthermore, I would like also to invite you to see the vision and forward steps of the Indonesian nation in moving towards a just, peaceful, democratic and flourishing country.
We have made substantial achievements thus far, despite the equally many challenges confronting us. On this opportune occasion, I would like to express my heartfelt thanks and highest appreciation to the leaders and members of the House (DPD), to the Governor/Vice Governor, Regent/Vice Regent, Mayor/Vice Mayor, and all ranks and files of the regions down to the villages and sub-districts, for their cooperation and cohesiveness in the management of the life as state during the last 5 years. Our highest appreciation undoubtedly goes to the whole of the Indonesian people, who have unflinchingly worked very hard with the Government, to develop the nation and country in all sectors over the entire length and breadth of the Archipelago.
Fellow Countrymen,
Touching about development, often times the question is raised, for whom is development implemented? Is it for man, or is man for development? Is it only for a certain group? To answer these questions, I have given the theme “Development for All†in today’s address. The state does not make any distinction; every citizen is equal before the law and the government. For this reason, therefore, the state must see to it that there are no groups of people who are left behind in the development process. Particularly at moments like this, when we give substance to independence and cohesiveness. Basically-speaking, the development of a nation must be inclusive in nature, it reaches and uplifts the dignity of the whole segments of the society, all over the territory of the Archipelago. We must advance and prosper collectively and not advance and prosper individually. When the strength of a nation is likened to a chain, its strength lies in its weakest link. The strategy of “Development for All†is aimed at strengthening each link of the nation’s overall chain of unity and prosperity.
The paradigm of “Development for Allâ€, in Indonesia’s context, can only be carried out by adopting six fundamental development strategies. The first, an inclusive development strategy, that ensures equity and justice, that respects and maintains the Indonesian people’s diversity. The development to reach Indonesia’s aspirations of independence must not be interpreted in the narrow sense of the word, by merely aiming at a high economic growth rate, let alone being carried out and enjoyed by only a small group of economic players or by a few particular regions.
The Central and Regional Governments ought to constantly renew the common understanding and consensus in developing Indonesia. This consensus is guided by Indonesia’s medium and long-term visions. Indonesia’s long-term direction for 2005-2025 is stated in Law Number 17 of 2007 on Long Term National Development Plan. Whereas in our medium-term, we will immediately draft the second phase Medium Term National Development Plan 2009-2014. In this context, the drafting of the Medium Term National Development Plan, both at the National and respective Regional levels, must be harmonized. Thus, Indonesia’s inclusive development strategy and implementation can be carried out immediately in an effective and mutually-supporting manner.
In this inclusive development, the government has adopted various policies. Among other things, the Pro People Programs, where one of the examples is the promotion of the National Self Reliant People’s Empowerment Program (PNPM), by empowering the people directly at the sub-district and village levels. Because what we are developing is not just the urban areas, but also the people in the rural areas. With the Self Reliant PNPM, the people in the villages may decide on the development priorities of their respective regions. The various pro-people programs to help the poor and near-poor people are also parts of the framework of this inclusive development.
Second, in the framework of “Development for Allâ€, Indonesia’s development consequently must have a territorial dimension. Each province, each regency/municipality, is the country’s center of growth, that must capitalize on all the potentials of the respective regions, whether their natural resources, human resources or geographic locations. This is the reason why the Government seriously encourages the regions in the border areas to seize on the opportunities of regional development cooperation such as IMT-GT and BIMP-EAGA, as well as the border cooperation with Australia and Timor Leste. From the very outset, I have always underlined that border areas are the front porches of the Republic and not its backyards.
The development with territorial dimension also signifies that the Government continues to stimulate each region in enhancing their respective comparative and competitive advantages. However, the inter-regional balance must also be preserved, in order to avoid any possible inter-regional imbalance. There should not be any single region left too far behind the others. The principal thing is that when regions are advanced, hence, the country will also be advanced.
Ladies and Gentlemen,
After emphasizing on the development that is inclusive and has a territorial dimension, thus, the third strategy is to create an integrated national economy in the globalization era. We are not implementing national development in a vacuum. In fact, since the colonial period, Indonesia’s economy has been linked to the global economy. The difference is that at that time, the context was the exploitation of Indonesia’s economy and resources to serve the colonial economic interest. Nowadays, as an independent nation, our linkages to the global economy are based on our national interest, to be utilized for the maximum possible benefit of the Indonesian people. We have to seize on the emerging opportunities in the globalization era, while, at the same time, spare ourselves from its negative impacts. We must not continuously lament about the globalization engulfing the world; we had better prepare ourselves to face and win over it. We must be the winning and not the losing nation in this globalization era.
We must take our hat off to the Balinese people, who give the example of how to integrate with the global community, how they reap the greatest possible advantage, without losing their own identity. The Balinese people become increasingly advanced and prosperous, through the promotion of tourism with a touch of nature and culture, imbued with the value of tri hita karana, that remains as the fundamental principle of the Balinese people’s way of life. Certainly, it is not easy to preserve it and it is full with challenges. But if the Balinese people can do it, the people in other regions must also be able to emulate it. All of which remains within the framework of the Unitary State of the Republic of Indonesia (NKRI).
Similarly with the people in Minangkabau, who are facing globalization with hard work, self-confidence, while simultaneously continue to preserve the values of tungku tigo sajarangan. The elderly, the ulemas and the intellectuals escort the transformation process in West Sumatra, so the development outcome remains a part of the development of the people in West Sumatra itself.
Ladies and Gentlemen,
Congruently, the fourth strategy, which also becomes one of the keys of success of “Development for Allâ€, is the local economic development in every region, with the purpose of developing a strong domestic economy nation-wide. A strong domestic economy is the main asset for a nation in order to be glorious in the midst of globalization onslaught. The lesson we draw from the global economic crisis besetting the world today is the fact that the country which is able to withstand the negative impact of global recession is the country with a strong domestic economy. Furthermore, a strong domestic economy also ensures the nation’s self-reliance.
We should be thankful that we have drawn a valuable lesson from the economic crisis ten years ago, when our economy was very vulnerable, nay, even fragile in the face of the regional crisis. When during the economic crisis ten years ago, we were one of the economically hardest hit countries, today Indonesia is one of the most capable countries to withstand the economic crisis overwhelming the world at present. In the future, the economic dynamics and synergy of the people in the 33 provinces and 491 regencies/municipalities are the backbones of the national economy.
This is the reason why the reinforcement of inter-regional linkages becomes a prerequisite. To this end, the Central and Regional Governments must continue to enhance the quality and quantity of infrastructure, primarily in physical terms. During the 2004-2009 period, thank God, alhamdullilah, we have succeeded, among other things, to complete the construction of the bridge linking Java and Madura. The connection between Java-Madura shall, God willing, insya Allah, significantly boost the progress in Madura and the well-being of its inhabitants. Likewise, we are also planning to build a bridge between Java and Sumatra. When this is materialized, the distribution of development benefits that have so far been concentrated in Java, will spread better to Sumatra. We will likewise continue with the completion of the construction of Trans Kalimantan, Trans Sulawesi and Trans Papua.
Apart from raising the physical linkages, in functional terms, we must also establish the inter-regional linkages. The government continues to stimulate that the products of one region can easily be used as the basic materials in other regions, or to be used as finished products. For this purpose, we must minimize the number of trade barriers between regions, such as official levies or collections. Especially unofficial levies or collections that precisely obstruct the emergence of investment and business community in the respective regions.
Ladies and Gentlemen,
The “Development for All†paradigm demands the fifth strategy which is the harmony and balance between growth and equity, or Growth with Equity. Such a strategy is also a correction over the previous development policy, which is known as the trickle-down effect. The trickle-down effect strategy assumed the need of prioritizing economic growth over equity. In reality, in many countries, including Indonesia, this theory has failed in creating welfare for all.
Therefore, in order to simultaneously realize growth and equity, since the beginning I have laid down a triple-track strategy, namely a pro-growth, pro-job, and pro-poor strategy in the national economic development. With this triple-track strategy, national economic development strategy is adopted with a high economic growth, through the promotion of investment as well as domestic and foreign trade. The economic development is also aimed at creating employment opportunities by generating the real sectors and, at the same time, the economic development is focused on alleviating poverty through agricultural and rural revitalization policies as well as pro-people programs.
During the last few years, the Government has carried out a variety of pro-people programs designed for the people’s various capacity degrees. Some are likened to the form of “the fish†such as Direct Cash Assistance (BLT), Public Health Insurance (Jamkesmas), School Operational Support (BOS), Aspiring Family Program (PKH), subsidized rice and so forth, which are earmarked for poor and near-poor families all over the archipelago. Some are in the form of “the fishing rodâ€, such as the Self Reliant PNPM, which empowers people through the provision of funds up to Rp 3 billion per sub-district per year, the use of which is determined by the people themselves at the village level. I have seen myself the benefits of the Self Reliant PNPM for the construction of rural roads and irrigation, clean water facilities, collective catfish cultivation, banana chips promotion by housewives in the villages and so on.
There are also pro-people programs likened to the form of “the boatâ€, such as Small Holder Business Credit (KUR) which provides credit access without additional collateral for those who want to open up business. Hence, if a meatball vendor wants to obtain a business capital, then his meatball cart becomes his collateral. Until May 2009, the banking sector has disbursed Rp 14.5 trillion1 of Small Holder Business Credit (KUR) channeled to over 2 million debtors. In the future, the government will continue to promote this KUR in a constantly larger amount and wider coverage, as well as with a better format.
The essence of just and equitable “Development for All†is the sixth strategy, which is the development that emphasizes on the promotion of human quality. The Indonesian people is not merely an object but, conversely, the subject of development. The human resources become the actors as well as the focus of the development goals, so that the living quality of Indonesians could be improved. For this purpose, therefore, the “Development for All†always gives a high priority to education, health, income as well as a better living environment. Environment here is referred to not only a healthy and lasting environment, but also a social, political and security environment which is orderly, safe, pleasant, and democratic.
We are thankful that the life expectancy of Indonesians continue to rise from 68.6 years old in 2004 to 70.7 years old in 2009. The infant mortality rate also declines from 33.9 per 1000 life births in 2004 to 26.2 per 1000 life births in 2009, while the maternal mortality rate declines from 307 per 100,000 life births in 2003 to 228 per 100,000 life births in 2007. Meanwhile, the illiteracy rate (for inhabitants above 15 years old) in 2008 has dropped to 7.9 percent, compared to 9.6 percent in 2004. In general, Indonesia’s human development index has gone up from 68.7 in 2004 to 71.1 in 2008.
Fellow Countrymen,
Distinguished Ladies and Gentlemen,
These six development strategies for the realization of the “Development for All†paradigm cannot be applied in the context of power and state finances centralization. In this respect, growth is only concerted on the centers of power and the ruling elites. The imbalance between central and regional governments becomes the logical consequence of a centralistic system. The expression of “in Jakarta there are many bridges without rivers, while in the rural areas, there are many rivers without bridges†is a fact as the result of decades of power and state finances centralization in Indonesia. Reforms which prioritize democracy and decentralization must alter such a reality.
Thank God, Alhamdulillah, since the start of reformasi, we have laid down the appropriate and increasingly solid foundation in developing the order of the national and state life. With the systems of democracy and decentralization, we are able to establish a regional autonomy as the foundation for the implementation of a just, equitable and inclusive development strategy. We have initiated the regional autonomy policy since the beginning of reformasi ten years ago and it was mandated by Law Number 22 of 1999 and improved by Law Number 32 of 2004 on Regional Government. The transfer of most Government authorities to Regional Governments, has placed the Regional Governments as the spearheads of national development, in realizing the people’s just and equitably distributed prosperity.
The appropriate execution of regional autonomy will produce a positive effect in the form of a more equitably distributed regional economic growth, as well as declining poverty and unemployment rates. We are thankful, that during the last five years, there are seven provinces which have consistently succeeded in recording a higher economic growth rate above the national level. The seven Provinces are West Papua, Southeast Sulawesi, Jambi, Central Sulawesi, West Sumatera, North Sumatera, and Jakarta Capital Special Territory (DKI).
We are also thankful, that during the last five years, all provinces have succeeded in lowering the poverty level. The provinces with the percentage of poor people under 10 percent are: West Sumatera, Riau, Jambi, Bangka Belitung, Riau Islands, DKI Jakarta, Banten, Bali, West Kalimantan, South Kalimantan, Central Kalimantan, East Kalimantan and North Sulawesi. Then the provinces with percentage of decline above 4 percent are: Aceh, East Nusa Tenggara, West Kalimantan, Gorontalo, West Sulawesi and West Papua.
During the same period, we were also able to evenly lower the unemployment rate in almost all provinces. The provinces with the lower unemployment rate of above 3 percent are: West Sumatera, Riau, South Sulawesi, Southeast Sulawesi, Gorontalo, Papua and West Papua. On this auspicious occasion, I would like to convey my heartfelt thanks and highest appreciation to the Heads of Regions who have managed to raise the economic growth, lower the levels of poverty and unemployment.
Ladies and Gentlemen,
In carrying out a just and equitable regional development, the consistent and accountable implementation of fiscal decentralization assumes a great importance. State finances decentralization is designed to adopt budget principles that must be in conformity with the function and responsibility delegated to the regions (money follows function). The policy of budget transfer to regions is intended to narrow the fiscal gap between the Central and Regional Governments, as well as the inter-regional gap. The budget transfer to regions is also aimed at improving public service in the regions and closing the gap in inter-regional public service.
The improvement of transfer to regions disbursement pattern has produced positive impacts on the management of regional budget. This is reflected in the form of the expedited completion of the Regional Regulation on APBD. In 2007, there were only 25 regions that have completed their Perda APBD on schedule. In 2009, the number of regions that have successfully completed the Perda APBD on schedule has risen dramatically to 118 regions.
The Government has presented awards to 12 (twelve) regions which have completed their Perda APBD during three consecutive years before December 31st. These 12 regions are: the Provinces of Central Kalimantan and North Sulawesi, the Regencies of Sula Islands, Purbalingga, Cilacap, Minahasa, Sidenreng Rappang, Sintang, and Luwu, as well as the Municipalities of Binjai, Palu and Palopo. I certainly hope that in the not-too-distant future, all regions must be able to complete the Perda APBD on time. To this end, it requires a good synergy between the executive and legislative branches in the management of regional government. Please bear in mind, ladies and gentlemen, do not put the interest of the people as hostage of the interest of political elites among the leaders in the regions.
Distinguished Ladies and Gentlemen,
To sustain the execution of fiscal decentralization, the Government plans to allocate transfer to regions fund in 2010 amounting to Rp 309.8 trillion. From the total amount of transfer to regions fund, the Equalization Fund is envisaged to reach Rp 293.0 trillion or an increase by Rp 7.7 trillion, compared to its projected realization in 2009. The budget is planned to be allocated in the form of Shared Fund (DBH) totaling Rp 76.6 trillion, Public Allocation Fund (DAU) to the tune of Rp 195.8 trillion, and Special Allocation Fund (DAK) amounting to Rp 20.6 trillion.
In the meantime, the Special Autonomy Fund (Otsus) allocated for the Provinces of Aceh, Papua and West Papua is projected to reach Rp 8.9 trillion. I hope that this Special Autonomy Fund can be spent optimally, in order to be extricated from being disadvantaged in providing services in health, education and infrastructure. However, I also request that a more effective monitoring on the use of Otsus Fund is applied.
Starting in 2010, changes will be made to the allotment of Shared Fund (DBH) from Excise of Tobacco Products, by including regions producing excise of tobacco and those producing tobacco. Moreover, the Government will also allocate the Geothermal DBH as a part of the Natural Resources Shared Fund (DBH SDA). From the experience during the last four years, the prices of oil and gas, as well as coal, are expected to be subjected to persistent fluctuation, resulting in the frequent changes of state revenue from the Natural Resource sector. I should remind the regions relying on their DBH SDA, to improve the anticipative ability as well as to manage the fluctuating prices of natural resources and the region’s revenue.  Â
To assist the regions in funding the development of facilities and infrastructure as basic public services, the Government has allocated Special Allocation Fund (DAK). In 2010, the policy of DAK will be prioritized to generate the public service achievement in line with the Minimum Services Standard, acceleration of welfare improvement of the poor, improvement of human resources quality as well as consolidation of bureaucracy and legal reforms.
Ladies and Gentlemen,
Indeed, the delegation of a greater role, authority and responsibility to the Regional Governments is aimed at providing better, easier, faster and cheaper services for the people. If in the business community the principle of “customer is king†prevails, then in governance the principle of “everything is for the people†applies. For this purpose, it is imperative to improve the capacity and competence of the Regional Government in the amelioration of public services. To provide prime public services, a bureaucracy reform program is required in order to establish good governance, compatible with the principles of good governance and clean government.
Bureaucratic reform is a sustainable and comprehensive process, because it involves attitude and behaviorial changes of all ranks and files of government apparatus from the highest to the executor level. These changes do not only cover the organizational structure but also the working procedure, discipline and commitment to performance, as well as formulated incentive and punishment system which is just and impartial. The Government has conducted, and is still conducting a gradual bureaucratic reform program, so as to be completed that will cover all Ministries and Institutions in 2011. Simultaneously, and in a gradual fashion, reform of the regional government must also be initiated in a planned, organized and sustainable manner.
Ladies and Gentlemen,
With a more consistent and competent execution of decentralization, the regions will have greater ability to create a favorable and attractive business climate for the growth of productive economic activities. The quality of regional policy and regulation will be highly decisive to attract investment. The presence of regional regulation which causes a high cost economy will obviously hamper investment. In compliance with our common commitment to create a favorable investment climate in the regions, then the Government has abolished, is abolishing, and will continue to abolish various regional levies, which are inconsistent with regulations.
Until the middle of August 2009, there are 3,455 Regional Regulations on Regional Tax and Levies (PDRD) recommended by the Government to be revoked and revised, or 36 percent of the number of Regional Regulations on PDRD that have been evaluated. In addition, there are 1,727 Drafts on PDRD that are recommended to be rejected or revised. The revoked Regional Regulations on PDRD and Draft Regional Regulations on PDRD to be rejected or revised are mainly levies on the sectors of transportation, industry & trade and agriculture.
To improve the investment climate in the regions and in order to minimize the issuance of problem-prone Regional Regulations on regional tax and levies, the Government and the House of Representatives (DPR) has completed their deliberations on the Bill on Regional Tax and Regional Levies. Thank God, alhamdulillah, the Bill has been approved and enacted. This Law stipulates the type of tax and levies is considered as a closed list, which means that the types of regional tax and regional levies will only be permitted when it is in compliance with the Law on Regional Tax and Regional Levies.
In line with the spirit of regional autonomy and fiscal decentralization, the regions have local taxing power to raise regional capability in funding their expenditure. The reinforcement of local taxing power and the increase of Locally Generated Revenue (PAD), still refers to the principle of keeping the harmony with the authority in the provision of services and management of regional government. The regions will obtain the expansion of basis and add the types of regional tax and levies, as well as the discretion of applying tax tariff on certain level. I instruct the Regions to capitalize on the Law on Regional Tax and Regional Levies, in compliance with the existing corridors, so that it will not impose excessive burden on the economic players.
Fellow Countrymen,
The success of “Development for All†paradigm requires a number of requirements. First, the improvement of the people’s equitable welfare and quality of life is also greatly determined by the availability and the construction of a number of basic infrastructures. In this regard, the government has accorded a great attention to the development of infrastructure all over the homeland, be it in the forms of highways, irrigation, sea ports, airports, clean water provision, telecommunication, and energy and power infrastructures. Particularly for telecommunication, it is expected that in 2010, all villages and sub-districts will be connected to informatics infrastructure, namely telephone and internet. For broadcasting purposes, God willing, insya Allah, in 2010 all border areas in homeland are expected to be able to receive TVRI and RRI broadcasts.
The infrastructure development throughout the homeland is the concrete manifestation of our collective determination to build Indonesia’s cohesion. The improvement of infrastructure quality is carried out in the dense areas such as Java, particularly Jakarta, by the execution of the Jakarta Mass Rapid Transit System Project, to ease traffic congestion. The development of national transportation is also systematically integrated with sustainable regional development. Similarly, the Government will continue to expedite the territorial enhancement through the development of infrastructure, in order to open the isolation of remote areas.
In order to speed up the supply of drinking water, the Government also adopts a strategic policy by providing collateral and interest subsidy to the Regional Water Company (PDAM). The program is introduced as one of the efforts to realize the millennium development goals (MDGs) in the form of lowering a half proportion of the population who have no access to drinking water supply in 2015. Potable water is one of the people’s basic needs that should always be available in a quite equitable quantity and with a good quality.
Meanwhile, Indonesia’s high economic growth during the last few years has resulted in greater electric power demands. Whereas, in fact, our power supply did not substantially increase since the end of the new order era, namely around 25 thousands mega watts. Consequently, the government has adopted the development of power generation program with a capacity of 10 thousands mega watts. We started to notice the result of the output of some new power stations in various regions. However, in anticipating the growingly high economic growth, the Government has launched the second 10 thousands mega watts power generation program. Even though it is realized that, when the time comes, the additional 20 thousands mega watts will not meet the endless demand for electricity, in line with Indonesia’s continuing high economic growth. Therefore, the construction of power generation will continue to be executed. In this light, there should be continuous innovation to diversify power generation sources, including and especially, by utilizing renewable energy sources, such as solar energy, wind, wave, geothermal and biofuel.
Ladies and Gentlemen,
The second requirement is to remove the impediments blocking development process and programs (debottlenecking). I realize that one of the most often-heard complaints is the prevailing numerous delays, barriers and obstacles as a result of development activities in the regions, due to the unsynchronized and unclear land licensing and spatial allocation. It is about time that we should comprehensively evaluate the land and spatial issues, whether at the national, major islands, provincial and regency/municipality levels. Many overlapping regulations, and the still weak system and infrastructure to provide clarification and certification of land, and various abuses of power as well as the issuance of license on land and spatial issue, should immediately be put in order and corrected. I am giving the instruction that matters related to land and spatial arrangement must become the priority of all government apparatus, both at central and regional levels, to be solved together in order to eliminate obstacles to national development.
Fellow Countrymen,
Indeed, our journey to develop Indonesia has always been replete with challenges, but thank God, alhamdullilah, we have always succeeded well to emerge from the crisis, as a matter of fact, we became even stronger and solid. Ten years after we were subjected to the most severe monetary crisis in Asia, Indonesia has reawakened. We have reawakened and now stand strong not only in terms of the economy, but in the social and political sectors too. If nine years ago there was an international columnist who branded Indonesia as a “messy stateâ€, now the Time magazine actually considers us as a “political success storyâ€, and many also find Indonesia as an “emerging economy†and a “model democracyâ€. In addition, Indonesia can confidently play a role in the international economic arena, particularly due to its new weight, as the largest economy with the highest growth in Southeast Asia.
More than simply recovering, we have also built the foundation in our life as a nation and managed Indonesia’s stronger and more just economy. The reformasi has offered us all the opportunity to build democracy and well-implemented decentralization. Reformasi has also produced the principles of cleaner, more responsive, more transparent and more accountable state administration. With increasingly strong foundation of the state administration and economic management, we have jointly been able to overcome new crises originated from both domestic and foreign sources.
Nowadays, we face the most recent challenge, namely the global financial crisis which has shaken the global economy, including Indonesia. Although we managed to maintain our national economic growth at around 4 percent, however, the investment activities as well as export and import trade have suffered a sharp decline. I urge all heads of provinces, regencies and municipalities to continuously anticipate and be alert to the impact of this global crisis on the economy of their respective regions. The economic policy direction in each region is still to recover the economy suffering from the global crisis while, at the same time, to sustain the people’s welfare, by continuously implementing pro-people programs, primarily in the fields of education, health and provision of basic infrastructure. We must also create employment opportunities and reduce unemployment, lower inflation, encourage investment and trade activities to persist and even intensified, as well as maintain food and energy security. In this fashion, we can continue to enhance the people’s welfare in all parts of the country and our people will really experience the true meaning of the independence of the Republic of Indonesia.
During the last four years, national development has growingly been equitably distributed to all regions, as indicated by the Equity Index of the Gross Regional Domestic Products (PDRB). The Equity Index that was 0.61 in 2005 has gone down to 0.55 in 2008. This means that the inter-regional economic activities have grown even more balanced. The Island of Java has the most equitably distributed economic activities due to a more evenly dispersed and advanced infrastructure development in comparison to other islands. Therefore, the Government is resolved to accelerate and to give priority to the execution of infrastructure development in all provinces and islands outside Java.
Ladies and Gentlemen,
Since the beginning of reformasi, transparency and accountability have been the extremely important principles to be upheld in governance, including the administration of state and regional finances. We have to uphold transparency and accountability in order to create good and clean governance. For the first time in the history of the Republic, we have succeeded in putting into order 39,477 government accounts worth Rp 35.9 trillion, US $ 238 million, and Euro 2.9 million. We continue to finalize the rearrangement, the documentation, and the assessment of all state assets, both in the central and the regional levels.
I am pleased that the quality of the Government financial report, through a variety of endeavors, has shown some improvements. The number of Financial Reports of State Ministry/Institution that earned the highest opinion as Proper Without Exception (WTP) has rapidly risen from 7 in 2006 to 35 in 2008. Meanwhile, the number that earned disclaimer status sharply declined from 35 in 2006 to 18 in 2008. I hope that the Regional Governments will not be outperformed by the Central Government in terms of the improvement of these financial reports.
Ladies and Gentlemen,
We must still pursue the journey to develop the Indonesian nation in materializing the ideals of independence in an earnest, spirited and sustainable manner. We must become more capable to seize the various opportunities and respond to every challenge through appropriate, intelligent and effective development programs. We have chosen the appropriate economic development strategy during this five-year period, by focusing on agriculture revitalization, food and energy security establishment, and basic and strategic infrastructure development.
The main focus of the continuity of this strategy is on the effort to solve the problem and debottlenecking, regarding the laws, bureaucracy and governance. Overlapping regulations ought to be rearranged, the coordination both in the central and regional governments have to be enhanced, while conflicts of interest must be eliminated. The Government will also continue to overcome the obstacle of budget availability, both in Central and Regional Governments, so that infrastructure development and agricultural and energy revitalization programs will be satisfactorily carried out.
For the 2009-2014 period, Indonesia must have the ability to respond to the growingly great and complicated development challenges. We must still have to improve Indonesia’s human resources quality. The investment in education sector with a sufficient budget that is in compliance with the constitution mandate must be continued. The betterment of education quality and teacher’s welfare is still being continued by concrete measures, designed to monitor the improvement of performance and education outcome.
The improvement in health sector continues to be the main focus in the coming five years. We do not only wish to lower infant and maternal mortality rates, but also to improve nutrition, immunization and health service quality in general. Health program will be concentrated on systematic and consistent preventive measures by all ranks and files of government, in accordance with the division of designated authority. The welfare of the medical personnel also needs improvement in a just manner.
In addition to human resources development, in the next five-year period, we must pay serious attention to the development of manufacturing industry, whether in the form of revitalization program of the existing industry or the construction of new manufacturing industry. The revitalization of fertilizer, sugar and cement industries is highly necessary for the next development stage. Similarly, we greatly need to develop manufacturing industry based on its comparative advantage, such as palm oil, forest products, and other estates products. The development of manufacturing industry not only provides added value to the national economy that creates an economic self-reliance, but also even greater employment opportunities.
The Government also continues to support, with accurate policy and budget, the development of strategic industry, as well as industry based on the development of science and technology, and other creative industries which have very great potentials for the creation of economic value-added and new opportunities. Hence, these industries could grow in a competitive and sustainable fashion, and at the end, will truly be the pride of the Indonesian nation.
Fellow Countrymen,
Distinguished Ladies and Gentlemen,
The success of “Development for All†could only be accomplished by the mastery and availability of five keys of success. First, an inclusive, evenly distributed and just strategy and program could only be materialized by the presence of effective and responsible leadership, both in central and regional governments. There are no opportunities that could be seized by regions whose leaders work leisurely, deprived of any spirit and determination to give their best. There will be no development that will succeed, without capable leadership with integrity and hard work to improve the welfare of the people. Namely, leadership that completely dedicates the heart, soul, energy and mind to improve the welfare of its people. This is the pro-people leadership, that neither keeps a distance nor even has conflicts, with the interest of the people under the leadership
The second key of success is the positive cohesion and synergy amongst all components of the nation. The mustering of the concerted strength of the government, state institutions, business community, universities and civil society is a prerequisite for the success of development. It is impossible to achieve the success of development if the Government’s element works alone without the positive support from the business community or elements of the civil society. Therefore, development must be a wide open room for the participation of all children of the nation, irrespective of their positions and wherever they may be.
The third key of success of development is the broad support of the society. The broad contribution and support of the society are social capital which must not be neglected in all sectors of development. The society will be actively involved in the development process, when they feel they have an interest in it, and have a sense of belonging (in Javanese melu handarbeni). On the contrary, people who enjoy the best possible public service will, in turn, be called upon to secure the successful completion of development in their respective regions.
In short, “Development for All†must empower people as active agents in the liberated development process. Free from poverty, ignorance, and backwardness. Moving towards an Indonesia that continues to be united, awakened and advanced, with a view to reaching a baldatun thayyibatun wa Rabbun ghafur, which is a peaceful, prosperous, morally and physically sound country under the aegis of God the Almighty, Allah SWT.
The fourth key of success requires integrity and the ethics of professionalism of the leaders and agents of development. Therefore, I never cease to invite and stress on all government ranks and files as agents of development to always highly uphold the mentality, integrity and professionalism ethics. Never even consider, let alone be tempted to compromise our integrity, particularly abusing authority for personal benefit, not to mention committing corruption.
Power is indeed vested with temptation, let us, therefore, exercise it with sincere devotion. During these five years, not a few regional government officials were brought to justice because of corruption. This is possible, because the on-going decentralization and regional autonomy offer regional leaders and government officials great authority and power. Hence, unless they firmly adhere to the mandate and do not deviate from the prevailing regulations, legal indictment for corruption can be imposed at anytime.
The guarantee of development without corruption, both in the Central and Regional Governments, will be better materialized by the consistent execution of the integrity pact and performance contract. One of the yardsticks to gauge the success of the integrity pact is through the measured realization of performance contract by all government ranks and files. The Central and Regional Governments which failed to maintain the working integrity and professionalism, which is in line with the development plan and target, must stand ready to accept either failure or lose the trust of their constituents.
Finally, the fifth key of success of development is a conducive domestic situation. Development will only proceed smoothly when the political stability is secured, the security and order are not compromised, and the social harmony is not torn apart. On the contrary, development will continue to encounter obstacles and proceed unsteadily, when the political situation remains volatile. We must continue manage the political dynamics so that its lively spirit continues to be pursuant to the objective and effort of development, certainly without curtailing our privilege in enjoying the freedom of democracy. Namely a democracy fenced in by impartial and constitutional rules of the game. Democracy which is not anarchist, and still operates within the corridor of law and social order.
Finally, the development in the realm of democracy still requires also a perpetual social harmony. It is unlikely that development will proceed effectively, when the people are always subjected to social conflicts, that undermine the basic foundations of social life. We have etched in dark ink, how the conflicts in Ambon, Poso, Sampit, and other areas which have led to the setback in the process of development. In our beloved country, various types of conflicts that jeopardize our social harmony in our life as a nation and state must be avoided at all cost.
Fellow Countrymen,
Distinguished Ladies and Gentlemen,
God the Almighty has destined the Indonesian Nation to come into being with the purpose of unifying the groups of islands in the Archipelago, with diverse ethnicity and cultures. We have seized the independence, we have crossed the golden bridge. However, whether or not the life of the Indonesian Nation will be more advanced and prosperous, entirely lies on our own hands. God the Almighty would not change the destiny of a nation, unless the nation itself makes a serious endeavor to change it. Let us ensure collectively that in the next 10 years, 50 years, 100 years or even 1000 years, the Indonesian Nation will continue to be glorious on the face of this earth. Neither cracked by heat, nor mildewed by rain. And as a Malayan proverb that goes, “Indonesia will not vanish from the earth!â€
Long Live the Republic of Indonesia!
Thank you.
Wassalamu’alaikum Warahmatullahi Wabarakatuh.
Jakarta, 19 August 2009
PRESIDENT OF THE REPUBLIC OF INDONESIA,
Sgd.
DR. H. SUSILO BAMBANG YUDHOYONO