Mr. Chairman,
Honorable Governors,
Distinguished Delegates,
Ladies and Gentlemen,

Rome, 19 – 20 February 2003

It is a great honor and privilege for me to speak on behalf of the Government of Indonesia, to express our sincere appreciation and thanks to the President of IFAD and his staff for their untiring efforts and excellent preparatory work to ensure the success of this important meeting of the Governing Council of IFAD. I also would like to thank the Government and the people of Italy for their hospitality and their support for the success of this meeting.

On behalf of the Government and people of Indonesia, I extend my warm welcome to the Democratic Republic of Timor-Leste on her accession to membership of IFAD. My delegation looks forward to working closely with the delegation of Timor-Leste.

The Twenty-Sixth Session of the Governing Council marks the official opening of the one-year anniversary period, to commemorate the 25th anniversary of IFAD’s Governing Council. We observe the 25th Anniversary at a crucial time in the history of humankind. I am sure that, we can all agree that eradication of poverty is the most crucial development challenge of the 21st century. It is also true that the very persistence of such poverty, amidst a world of abundance, greatly heightens the perception in many developing countries that they are largely shut out and marginalized from the benefits of globalization.

In addressing the issue of poverty, the international community has taken numerous initiatives over the years, including through the United Nations global conferences of the 1990’s, particularly that of the World Summit for Social Development in Copenhagen in 1995. Within the context of the Bretton Woods Institutions, significant initiatives have been made, including the formulation of the Poverty Reduction Strategy Paper (PRSP), which we believe complements the efforts of achieving the goal to halve the number of people living in poverty by 2015 as stipulated at the Declaration of the UN Millennium Summit. In this vein, IFAD announced in February 2001 that poor countries would fail to reach the target mainly due to the fact that most attention had been focused on the poverty of mega-cities to the neglect of rural poverty where 75 per cent of the world’s poor actually live.

Furthermore, we strongly believe that the international community should give top priority to the provision of additional financing resources for development particularly in the form of Official Development Assistance (ODA) as well as the provision of faster, deeper and broader debt relief for Heavily Indebted Poor Countries (HIPCs). In this regard, we see the Monterrey Consensus on Financing for Development as an excellent basis for our effort to mitigate the consequences of depressed export revenues of countries that still depend heavily on commodity exports. Within this framework, IFAD should actively engage in the process with a broad spectrum of stakeholders including the United Nations, the Bretton Woods Institutions as well as many other relevant entities at the global, regional and domestic levels, including the private sector and civil society.

Mr. Chairman,

Let me now briefly turn to the relationship between Indonesia and IFAD. IFAD has extended to the Republic of Indonesia 12 loans, for a total amount of US$ 263.3 million, with the last proposed being the East Kalimantan Local Empowerment project. The Fund’s current portfolio of development efforts in the country consists of three on going projects that have been funded with about US$ 65.7 million. One of these projects, already considered a huge success, is the Rural Income Generating Project (RIGP)/Proyek Peningkatan Pendapatan Petani/Nelayan Kecil (P4K). The RIGP is working to alleviate poverty in rural areas by focusing on the development of the agribusiness sector. This particular project aims at strengthening household finances and increasing purchasing power by providing assistance in agribusiness activities. The last IFAD funded project, the Post Crisis Program for Participatory Integrated Development in Rain fed Areas (PIDRA), is based on a very innovative partnership between the Government and NGOs. PIDRA, signed in 2000, has so far been implemented with promising results in terms of increased cost-effectiveness and its impact on poverty alleviation. The Executive Board in its meeting in December 2002 approved the East Kalimantan Local Communities Empowerment Program, which should become effective in the coming months.

Mr. Chairman,

This meeting of the Governing Council is very important as we embark on a review of the resources available to the Fund and examine the adequacy of these resources to achieve IFAD’s goals. We reached the consensus for the Sixth Replenishment of IFAD’s resources during 2002, and this meeting is quite timely as it will provide member countries with sufficient information and time to consider the multi-dimensional effects of their contributions to IFAD. We also would like to underline the importance of ensuring that an adequate level of resources are made available to IFAD if it is to go forward with its objectives. The lack of adequate funding in the past has certainly affected the ability of IFAD to implement its previous programs and to carry out satisfactorily its mandate.

The Government of Indonesia realizes the importance of resources to achieve IFAD’s objectives, and in accordance with the financial commitments pledged to IFAD, has made two payment installments of US$ 3.5 million each of the total commitment of US$ 10 million for the Fifth Replenishment, and the rest will be paid off in 2003. As to the Sixth Replenishment, the Government of Indonesia pledges US$5 million. This is merely due to our budget constraint. Nevertheless, the Government of Indonesia will review its contribution when the economic condition is improved. In this regard, we would like to appeal to all other member states to renew their commitments to support IFAD and to increase its effectiveness and efficiency. In addition, the organization’s funds should not be used for any activity or program that does not contribute directly to the implementation of IFAD’s mandated activities. Moreover, our delegation would like to reiterate its hope that IFAD will continue to seek support from other financial institutions to increase its pool of funds.
We believe that partnership with other institutions, both multilateral and bilateral levels, should be explored and pursued to further strengthen the reach of IFAD’s goals. These partnerships and collaboration with other donors in attaining the noble and vital goal of eradicating hunger and poverty would make the task easier. Indonesia, for instance, has worked together with the World Bank in several development efforts and in poverty eradication programs. It is encouraging to note that the World Bank, FAO and IFAD are all committed to support agricultural development especially rural development and poverty alleviation in developing countries.

Despite improved global nutrition, food insecurity will remain a serious problem in 2020. Millions of people will suffer from hunger and its debilitating consequences. In order to address this situation, efforts should be made to develop post harvest technology, biotechnology and product development that will benefit the poor and food-insecure households in developing countries; to renew investments in factors triggering agricultural growth such as agricultural research, human research, human resource development and rural infrastructure; to harness the political will to adopt sound policies for eradicating poverty, fostering food security and protecting natural resources; and to alter behavior and priorities to assure sustainable development.
It is generally known that sufficient food availability is necessary but does not guarantee sufficient food security. Some people may suffer from hunger or famine because they don’t have sufficient access to food supply. “The tragedy of hunger in the midst of plenty” can occur. Both food availability and accessibility are highly vulnerable to various risks, such as production, trade, price, income, political, and social risks; therefore, a social security system or a social safety net system are also necessary components of sustainable food security.

In conclusion, the Indonesian Delegation hopes that the 25th anniversary session of the Governing Council will gain fruitful success in its deliberations in view of the important contribution of IFAD to national development of its developing member countries.

Thank you very much for your kind attention.