IFAD Asset Request Portlet

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Statement by Indonesia at the 24th Session of the Governing Council

Mr. Chairman,
Distinguished Governors,
Distinguished Delegates,

Ladies and Gentlemen,

1. Allow me first of all, on behalf of the Government of Indonesia to express our gratitude to the government and people of Italy for their warm welcome and hospitality. I would also like to thank to President and his associates for their untiring efforts and for the preparatory work they have accomplished to ensure the success of the 24th Session of the Governing Council of the Internatiuonal Fund for Agricultural Development.

2. One of the major challenges that IFAD faces today is that of making this organization more responsive to the new realities of the global economy. The winds of globalization are sweeping around the world, bringing unprecedented changes and challenges as well as new opportunities to every nation of the world. In this respect, we would like to see IFAD carrying out the important task of assisting member states in their efforts to cary out reform for development their economies in a way that is both sustainable and environmentally balanced, while contributing to the elimination of poverty and of conditions increase disadvantages.

3. Today’s meeting is of crucial importance. Among other tasks, the Governing Council must review the progress accomplished by previous IFAD programmes before planning for new and future initiatives. This review will provide a valuable opportunity to examine the organizations past achievements and will help chart a new course for the future direction of IFAD’s efforts.

4. I would also like to underline the importance of ensuring that an adequate level of resources are made available to IFAD if its to go forward with its objectives. The tasks ahead of us are vital if sustainable growth is to be acchived in Asia. It this, therefore, a matter of great concern to all the member states of the organization. The lack of adequate funding in the past has certainly affected the ability of IFAD to implement its previous programmes and to carry out its mandates satisfactorily. In this respect, the Government of Indonesia realises the importance of not following the same unfortunate pattern. Despite the economic problems of our country, the Government of Indonesia has, once again, pledged its original contribution of US$10 million to cover fifth replenishment of the organization. We would therefore, like to appeal to all other member states to renew their commitments to support IFAD. These funds are important if the organization is to increase its effectiveness and efficiency. In addition, it should avoided, as must as possible, that the organization’s funds be used for any activity or programme 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.

5. Severe droughts have lately severely affected some Asian countries all ready menaced by desertification. A recurrence of such drought conditions could threaten to the livelihood and well being of the region’s population. They would diminish natural resources this causing a further deterioration of the sosio-economic conditions, a depletion of food stocks and the loss of bio-diversity. Moreover, the problem of land degradation in the region, both through physical and human factors, has also reached an alarming scale in the whole are. We need to urgently address those problems to prevent further deterioration and to facilitate the rehabilitation and recovery of those production capabilities. The Indonesian delegation is of the view that forthcoming projects financed by IFAD in the developing nations should be heplful in fighting against desertification and land degradation as well as in mitigating the effects of any future droughts.

6. Let me now briefly turn to Indonesia’s agricultural development policy. Indonesia considers agriculture and agricultural commodities as the backbone of its economy. Even during the economic crisis, the agricultural sector proved reasonably resilient to external shocks. In 1998, at they height of the financial crisis, while the overall Indonesian economy contracted by more than 13%, the agricultural sector enjoyed a 22% growth rate. Learning from past experiences, our Government is determined to place a special emphasis on agricultural and rural development in an effort to overcome our current economic difficulties and as a way to implement poverty alleviation projects.

7. This provides me with the opportunity to discuss Indonesia’s agricultural policies. Based on a nation-wide strategy, the Indonesian agricultural programme for the period of 2001 through 2004 covers the two following guidelines:

- A development programme for expanding the agricultural business (agribusiness) system. This programme takes into account the existing characteristics of Indonesia’s agricultural sector, which is generally associated with small-scale enterprises and focused locally on specific agricultural commodities. The programme’s ultimate goal is the establishment of productive and efficient agribusiness that can produce agricultural products competitive on both national and international markets.

- A development programme for the creation of food security. This programme aims at improving food security, as defined by availability, accessibility, and stability, at both a national and household level.

8. Nevertheless, before these two programmes can be fully implemented, there are two major challenges to be met for the future development of an agribusiness in Indonesia. First, the implementation of international trade liberalization policies leading to the establishment of free trade competition; and second, the implementation of regional autonomy law started in January 2001.

9. Let me now take a moment to express to Mr. Fawzi H. Al-Sultan our deepest appreciation for his efficient and energetic leadership during his two consecutive periods as President of IFAD. This present occasion happens to be Mr. Fawzi’s last meeting in that capacity. Under his able guidance, IFAD has performed well depite uncertain and often difficult external conditions. Our delegation also wishes to reiterate is support to exciting procedures for appointing a new president, which we believe, will effectively maintain good will amongst the member countries.

10. The Indonesian delegation would also like to express its gratitude to IFAD for having provided both financial and technical assistance to several on-going projects in Indonesia: (i) Income Generating Project for Marginal Farmers and Landless, (ii) Eastern Island Smallholder Cashew Development Project, and (iii) Eastern Islands Farming System and Livestock Development Project, and (iv) Program for Integrated Development in Rainfed Areas/PIDRA.

11. I am sure that IFAD will continue to play a most useful role in encouraging the improvement of agriculture in developing countries, thus ensuring that these countries do not remain marginalised and can become the equal partners of more advanced countries in reaping the benefits of globalization. I shall conclude by re-affirming my delegation’s full support to IFAD, and organization that is one of Indonesia’s closest partners for the development of the country’s most strategic area.

Thank you.

Secretary General, MoF

The Governor of IFAD for Indonesia