Mr. Chairperson,
Mr.President,
Excellencies, Fellow Governors,
Distinguish delegates,
Ladies and Gentleman,

First of all, let me start by thanking the Government of Italy and the Secretariat of IFAD for hosting this important session of the Governing Council of IFAD in Rome. At this juncture, I would also like, on behalf of the Government of Indonesia and my delegation, to acknowledge an impressive leadership and hard efforts demonstrated by Mr. Lennard Bage during his eight years of Presidency, which has placed IFAD in the front line as an organization promoting innovative ways to eradicate poverty through development in agriculture and rural areas.

Distinguished Board of Governors
In the past few years, the world has witnessed an array of unprecedented crisis, such as food, energy, climate change and the ongoing financial crisis.

As a result, all efforts to achieve MDGs, especially through poverty eradication, have suffered significant slowdown in developing countries such as Indonesia. Even as a middle-income country, our country still face classic problems, such as the high unemployment and poverty rate, discrepancy in growth rates among regions, and inadequate infrastructure.

In view of these problems, all efforts to maximize IFAD performance have become more important than ever. IFAD may consider devising a scheme to provide more financing to agriculture amid the lack of liquidity in the international financial markets. In this context, Indonesia hopes that IFAD Lending Policies and criteria adopted by the Governing Council shall not only be based on the gross national income per capita and lending terms thresholds, but also consider the poverty rate and geographical disparity of a country.

Distinguished Board of Governors,

Before the crisis, Indonesia was well on its way to achieving the first MDGs goal in eradicating poverty and hunger by 2015.

However, the impact of the crisis have exacerbate the situation, in particular in the micro level, where we still see the issue of poverty as a major concern due to its nature of being overwhelmingly clustered and concentrated in rural remote areas. Therefore, we view that IFAD’s new approach of focusing on funding for agriculture to eradicating poverty in rural areas may serve to strengthen country ownership and are within Indonesia best interest.

For the last 29 years IFAD has shown real results in assisting efforts to revitalize agriculture and rural development in Indonesia, particularly in the eastern region of Indonesia. Up to April 2008, IFAD has extended loans worth of a total amount of US$ 333.06 million for 13 projects on highly-concessional terms in Indonesia, with 10 projects completed and 3 still ongoing. In addition, the fund has mobilized essential co-financing within the country for approximately USD 384.3 million. This makes the total funding of the program in Indonesia to be around USD 717.36 million.

Two examples of IFAD funded projects that have been successfully implemented in Indonesia are: the Income Generating Project for Marginal and Landless Farmers (P4K) and Participatory Integrated Development in Rain-fed Areas (PIDRA). The development approach of these projects has been widely recognized and adopted as an excellent concept for rural community empowerment and agricultural development.

At the national level, the concept has been adopted as a model for developing National Program for Community Empowerment (PNPM), which is an umbrella for Indonesia’s national poverty reduction program.

Distinguished Board of Governors,

The afore-mentioned benefits received from IFAD programs, have convince our Government to continue supporting future IFAD programs, especially through the COSOP framework by 2009-2013. Therefore Indonesia is pleased to maintain our pledge at US$ 5 million for the Eighth replenishment.

In order to improve ownership on IFAD development program and strategies, we hope that under the leadership of the new president of IFAD, there will be an increase in the proportion of employees from developing countries. Furthermore, we hope that IFAD would continue to commit to the principles of geographic diversity and gender empowerment, which still deserve greater attention.

Mr. Chairperson,
Distinguished Board of Governors,

In concluding, taking into account IFAD comparative advantages and its mandate to overcome poverty, our government hopes that IFAD will play a counter cyclical role by fast-tracking new assistance and making the existing instruments more flexible to address the global financial crisis. In order to achieve this goal, we can point out two issues that we believe IFAD should consider. First, IFAD should take into account each member states national priorities, which has been partially addressed through the implementation of COSOP. This is crucial to ensure programs are delivered effectively at the national level. Second, all efforts must be as efficient and effective as possible.

Therefore, IFAD program should avoid overlapping among development partners and should synergize the available sources. To this end, IFAD can strengthen partnership with other development partners, which is in line with the decision of the G-20 Leaders Meeting in Washington, November 2008.

Thank you.