General statement of the Indonesian Governor at the Twenty-seventh Session of the Governing Council of IFAD; Rome, 18-19 february 2004

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

It gives me a great honor and privilege to speak on behalf of the Government of Indonesia at the Twenty-seventh Session of the Governing Council of IFAD. We also express our sincere appreciation and thanks to the President of IFAD and his staffs for their untiring efforts and excellent preparatory work for this important meeting of the Governing Council of IFAD. For the Government and the people of Italy, I also would like to thank for their hospitality and their support for the success of this meeting.

The twenty-seventh session of the Governing Council marks a crucial issue concerning increasing relevance of market and trade for the rural poor and the opportunities and challenges the new trade environment potentially creates for them, especially related to the failure of the World Trade Organization Meeting in Cancun and our effort to reach the Millennium Development Goals.

Mr. Chairman,

In addressing the Trade and Rural Development, the international community has taken numerous initiatives over the years especially on the issue of global trade on how fair trade can be built within the multilateral trading system. At the 1995 World Summit for Social Development, the international community reached a broad consensus on the goal of reducing poverty. Five years later, at the Millennium Summit, Governments committed themselves to reduce by half of the proportion of people living in extreme poverty by 2015. I believe these global commitments to fight and eradicate poverty carries the commitments of greater resources as well as global support for overall poverty reduction strategies and programs.

Mr. Chairman,

In the case of Indonesia, our Government is on the right track in restoring macroeconomic stability and restarting sustainable growth. Let me provide a few statistics to indicate our progress. In 2003, GDP grew by 3.8 percent, the Rupiah is stable and the one month Money Market Instrument rate has declined to 7.77 percent at the first week of February 2004, inflation continues to trend down below the targeted level of 8-9 percent in 2003 to just 5.06 percent.

Meanwhile, according to the 2002 data, about 44.3 percent of the labor force work in agricultural sector increase from 43.8 percent during the period of 2001. Its sector contributed 16.5% of the total of GDP in the third quarter of 2003 and during January to November 2003 contributed only 4.21% of the total export. From this point of view, we believe that the cooperation between IFAD and Indonesia in agriculture sector is very important.

Mr Chairman,

Indonesia has been IFAD’s member since 1978 and the benefits of IFAD’s projects in Indonesia are clear especially in eliminating rural hunger and poverty. Joins efforts between the Government of Indonesia and IFAD for almost 24 years also has resulted in considerable economic, social, environment, technological, and other benefits. IFAD has been providing loan to Indonesia since 1980 to present, with twelve projects in agricultural sector for the total amount of US$ 263.3 million. The Government of Indonesia realizes the importance of financial resources to achieve IFAD’s objective, and in accordance with the financial commitments pledges to IFAD, the Government of Indonesia has contributed to IFAD subsequent to the first six replenishment with amounted of US$ 41,959,000.

IFAD’s current portfolio of developments efforts in our country consist of three on going projects that have been funded with about US$ 65.7 million. Those projects are the Rural Income Generating Project (RIGP)/Proyek Peningkatan Pendapatan Petani/Nelayan Kecil, Eastern Island Smallholder Farming System Livestock Development /PUTKATI and the last IFAD funded project, the Post Crisis Program for Participatory Integrated Development in Rain Fed Areas (PIDRA). Those projects are already considered a success. Another project, namely the East Kalimantan Local Community Empowerment Program, which is still in the process of negotiation, is expected to be finalized soon.

Mr Chairman,

Today, IFAD is confronted with the new realities of the global economy and ever changing challenges, but at the same time, we know that IFAD’s role now has become even more important to help promote and implement the global campaign to eliminate hunger and poverty. We all agree that highly impoverished countries must be assisted in these efforts. Half of the world’s inhabitants live in poverty. Now more than ever, we must work together to eradicate hunger and work towards improving social conditions in rural areas they need concrete actions toward their income generating and welfare. Only then, can we achieve long lasting peace and lead to the establishment of a more just and tolerant society.

We must continue to work hard to eradicate poverty. We believe 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. We also believe that the partnership with other institution, in both multilateral and bilateral levels, should be explored and pursued to further strengthen the reach of IFAD’s goals. Partnerships and collaboration with other donors in attaining the noble and vital goal of eradicating hunger and poverty would make the task easier.

In conclusion, we have to mention that the Government of Indonesia has committed to make extra efforts to reduce the poverty in order to achieve the millennium goal development in the year 2015. In March 2004, IFAD and the Government of Indonesia will joint cooperate on conducting the National Roundtable Workshop of Country Program Evaluation (CPE)-IFAD in Yogyakarta-Indonesia. In this opportunity we would like to invite the member of the Executive Board to attend our National Roundtable Workshop of CPE held in Yogyakarta on 8-12 March 2004.

Finally, the Indonesia Delegation hopes that the 27th session of the Governing Council will gain a fruitful success in its deliberations in view of the important contribution of IFAD to national development of its poor member countries.

Thank you very much for your attention