It is my privilege and honor to address the 31st Annual Meeting of The Governing Council. I would like to begin by expressing my sincere appreciation to the President of IFAD and his team for their excellent work in preparing this important meeting. My gratitude also goes to the Government and people of Italy for their warm welcome, which has contributed positively to the atmosphere here today.

I would like to thank the Governor of the United Kingdom as well as the Governors of Qatar and Bangladesh as the outgoing Chair and Vice Chairs of the 30th Governing Council respectively, for their effective chairing of the sessions. At the same time, I would also like to congratulate The Governor of Nigeria and the Governors of Equador and Switzerland for your election as the new Chair the Vice Chairs of the 31st Council.

Before addressing more substantial issues, kindly allow me to update you briefly on Indonesian current economic situation. Our economic growth rate in 2007 is 6.3%, ahead of the 5.5% recorded in 2006. Agriculture is still a vital sector where around 43% workforce engaged in this sector. The growth of agricultural sector in 2007 is about 4.3 %, relatively better than that of the previous period.

The government committed to continuously prioritize the agricultural sector, where around 60% of our people engaging with.  The government of Indonesia has adopted the so-called Triple Tract Strategy.  This covers promoting growth through export and investment, promoting employment by stimulating the real sector, and reducing poverty by promoting agriculture and rural development.

Food security is not identical with sufficient food availability, as it must it also covers other aspects such as accessibility and independency on supply from other parties.  The problem of food security has been an important agenda and called for serious and consistent actions.  In our case, food stock, particularly rice is maintained to keep up with the increasing trend of population.  Import is still needed but just for the stabilization of its national food stock.  In terms of production, we have successfully achieved our set target, but not yet in terms of distribution and accessibility. 

Mr. Chairman,
Ladies and Gentlemen,

Indonesia has placed IFAD as an important partner to support the development of its agricultural sector.

This is in line with IFAD’s characteristics that cover rural development and agricultural development through empowerment of marginalized farmers.

Since 1980, IFAD has generously extended US$ 227.19 million to Indonesia for 12 projects. We have completed ten of these projects, and two are ongoing. In this opportunity, I would like to assure you that IFAD projects have directly benefited thousands of Indonesian rural people through self-generating activities.

Therefore, this kind of IFAD projects have not only made them stronger economically, but also empowered them to play more important part in their community.

We are all aware that during the recent years, the world is facing a threat on global warming that triggers a change on climate worldwide.  Climate change causes flood and drought that could jeopardize food security. As following up the result of High Level Event on Climate Change Finance Minister Meeting in Bali last December 2007, Indonesia is committed to adapt Climate Change in her fiscal policy.

We believe that the 31st Session will be timely and well focused on mitigation, slowing the pace of climate change, and adaptation, in order to enable people cope with its effects.

The seriousness of the threat must not be underestimated. Millions of extra people will be at risk of hunger in the years to come.  Therefore, it is crucial for IFAD to response the growing magnitude of climate change.

Mr. Chairman,
Ladies and Gentlemen,

Taking into account the seriousness of climate change, we strongly urges IFAD to take more responsive actions in overcoming various effects of climate change.   One of the most vulnerable sectors is agriculture.  It cannot be denied that when we are talking about agriculture, it is always linked to food security. 

In order ensure food security, productivity is becoming a critical factor, which needs a significant support from the results of research and development programs.

Mr. Chairman, I am pleased to inform you that for Asia and the Pacific region, there is a Center for alleviation of poverty through the development of secondary crops, namely UN-ESCAP-CAPSA located in Bogor, Indonesia.  The CAPSA Center needs to be empowered in taking its more significant roles by producing various farming system adaptable to climate change, besides generating high-yield varieties that resistant to the effects of climate change. 

Let me take this good opportunity to convey to you, Mr. Chairman, our government’s strong expectation that IFAD would also provide financing support to such regional center like CAPSA as it was similarly the case with other regional centers.

Let me draw your attention on the soaring global demand for energy and the depletion of natural resources that have forced every country to renew its strategy on the production and utilization of new and renewable energy resources.  Indeed, there might be conflict between growing crops for food versus biofuels. Large-scale biofuels development could be increasing threats to food security. In this respect, we urge IFAD to expand its attention on the rural-based development of bio-fuels.

Indonesia is following the trend toward bio-fuel as can be seen in Presidential Regulation in 2006 concerning National Energy Policy and Utilization of Bio-fuel as an Alternative Fuel Source.  The government plans to introduce the utilization of bio-fuels— bio-ethanol and bio-diesel—at a rate of 2% of total fuel consumption nationally by 2010, with the rate of bio-fuel utilization increasing to 5% by 2025.

Indonesia has started exploring and developing high-yielding agro-based sources of raw materials for bio-fuels, such as from Jatropha Curcas, Palm Oil and Cassava. We welcome the exchange of experiences with all member countries and invite IFAD to extend its investment in that program.

Mr. Chairman,
Ladies and Gentlemen,

Indonesia fully supports any efforts to improve the effectiveness and efficiency of various development assistances in developing countries.

This effort has been initiated by the collaboration of three Rome-based UN Agencies, namely IFAD, FAO, and WFP.  Again, Indonesia would like to re-emphasize that the important aspect of their collaboration is not the “collaboration itself” but more on the results and impacts of the collaboration.

On the Global Mechanism of the UN Convention to Combat Desertification, we again applaud the joint IFAD, FAO and ADB initiatives in Southeast Asia directed at tackling desertification and its associated complications.

Indonesia considers the importance of the Convention and hopes IFAD could increase the number of activities and partnerships in this area to prevent further land degradation, which is also of our country’s concerns.  

Mr. Chairman,
Ladies and Gentlemen,

Before concluding, allow me, on this opportunity, on behalf of the Government and the people of the Republic of Indonesia, to extend our congratulation to IFAD for its 31st Anniversary. We believe under the President-ship of Mr. Lennart Bage, IFAD will be better performed.  In carrying out its mandate, IFAD has indicated its readiness to improve development effectiveness and in line with the more focused strategic framework for 2007-2010.

Thank you.