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Country statement by the Indonesian Governor for IFAD to the 30th Session of IFAD's Governing Council

Mr. Chairman,
Mr. President,
Fellow Governors,
Distinguished Delegates,
Ladies and Gentlemen,

It is a great honor and privilege for my delegation and I to be here today. On behalf of the Government and people of the Republic of Indonesia, 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. I would also like to express my gratitude to the Government and the people of Italy for their warm welcome, which has contributed positively to the atmosphere here today.

Mr. Chairman, under your auspice leadership, there is no doubt that this meeting will surely be a great success. We believe the 30th Session, with its focus on rural employment and livelihoods, marks a crucial time for addressing the new realities and challenges of an ever-changing global economy. It is also crucial at this time for the Fund to continue its good works on the global campaign to alleviate hunger and poverty.

Distinguished Board of Governors,

Since 1980, IFAD has generously extended US$ 278 million worth of loan to Indonesia for 12 projects. We have completed nine of these projects, and three are still ongoing. In this opportunity, I would like to assure you that IFAD projects have directly benefited thousands, and indirectly millions, of Indonesian rural people. IFAD projects have not only made them stronger economically, but also empowered them to play more important part in their community.

Indonesia is pleased that a new project which will benefit the Papuan people has now passed the inception and formulation stages. It is our fervent hope that the Papuan Project will be approved by the Executive Board Meeting this year.

With regard to the economic situation of Indonesia, we are pleased with our economic growth rate in 2006 of 5.5%. Agriculture is a vital sector for Indonesia, contributing 7% of non-oil exports and 15% of GDP. These figures portray a vast improvement from the economic crisis of 1997-1998. We will build on this momentum, and we will expect economic growth of around 5.7% — 6.3% in 2007, which is supported by increased private consumption, government spending and better investment performance.

Distinguished Board of Governors,

Indonesia has a strong commitment to eradicate poverty. In line with our national poverty alleviation program, Indonesia considers IFAD as one of its most important strategic partners.  IFAD is the only significant international funding agency that focuses on the marginalized and landless farmers. IFAD's loans, with their generous terms and conditions, are of immense importance to the poor farmers of Indonesia.

Being an agriculture country with more than sixty million people in the agriculture sector, IFAD's continuous support to develop rural communities and agriculture sector will undoubtedly give further thrust to the Indonesia's national programs in the development of rural community and agricultural sector. Indonesia welcomes the new ‘country ownership' approach in the development of country strategies, and we are looking forward to work together with IFAD in drawing up the IFAD Indonesia country strategy, which shall commence in mid-2007.

We also welcome the deliverables of IFAD's action plan to improve development effectiveness and the revised strategic framework for 2007-2010. Indonesia believes the implementation of these deliverables will promote more focused IFAD projects and activities. In supporting one of the deliverables of the strategic framework, Indonesia is organizing an outreach program in Indonesia which will involve the three Rome-based UN agencies, planned to be held later this year. The initiative is aimed at not only providing opportunity for scholars as well as think thank and research institutions to learn more about the three agencies, but also to get inputs from them on the needs of rural and agriculture communities which then could be addressed by FAO, WFP and IFAD within their own comparative advantages.

On the Global Mechanism of the UN Convention to Combat Desertification, we applaud the joint IFAD, FAO and ADB initiatives in Southeast Asia directed at tackling desertification and its associated complications. Indonesia believes IFAD should increase the number of activities and partnerships in this area to prevent further land degradation and desertification. IFAD and others should mobilize financial support to affected countries to help address not only desertification and land degradation but also development issues in general.

Distinguished Boards of Governors,

As part of the greater effort to enhance IFAD's capacity and the design of programs to overcome shared challenges, we are honored to have this opportunity to share our ideas with fellow IFAD members. The increasing demands and needs for alternative energy is one such challenge. 

Indonesia views that IFAD should expand its attention on the rural-based development of bio-fuels.  Soaring global demand for energy and the depletion of natural resources have forced every country to renew its strategy on the production and utilization of energy.  There is no doubt that the development of the bio-fuels sub-sector can make a solid contribution to find a solution to various problems in rural areas.

The development of environmentally friendly renewable sources of energy would have added benefits. The sector would provide employment and income generation opportunities, making a positive contribution to poverty alleviation — especially in rural areas.
Indonesia's Ministry of Agriculture 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 invest in that program. We also extend our invitation to IFAD to participate in the Bio-fuels Seminar in Indonesia in the second half of 2007, which will be hosted by the Indonesian Bio-fuels Community.

To this end, one of Indonesia's highest priorities is to tackle the outbreak of Avian Influenza. We would like to urge IFAD to also play role in this alarming global issue. Should the virus mutate resulting in human-to-human transmission it could portend a global pandemic that we have not seen since the Spanish flu.  As the very first direct victims should the pandemic occur is the rural community, IFAD shall not exclude itself from participating actively in the global efforts in combating Avian Influenza.

In this regards, Indonesia gratefully welcomes any measures, such as technical assistance, special grant, or a combination of measures that includes provision of a soft loan specifically allocated to tackle avian influenza.

With regard to poverty eradication, Indonesia recalls the main outcome of the Regional Ministerial Meeting on Millennium Development Goals (MDG) in Asia and the Pacific held in Jakarta, 3-5 August 2005.  The Declaration articulated the common strategy adopted by regional countries to achieve their MDGs — the eradication of poverty by developing agricultural and rural communities.  The outcome is embodied in the Jakarta Declaration on MDGs in Asia and the Pacific, the way forward 2015. Moreover, the 2005 report of the High Level Plenary Meeting of the United Nations also took it into account. We continue to support initiatives in this area.

Distinguished Board of Governors,

We welcome the newly appointed Vice President and three new Assistant-Presidents of IFAD. We believe the new team will allow IFAD to deliver more effectively and efficiently its development programs and activities. Indonesia has concerns, nonetheless, that the composition of the staff in IFAD has not yet reflected a balanced geographical distribution. Indonesia urges that this issue be addressed appropriately. We suggest that one small step to address this imbalance could be the recruitment of a greater number of IFAD staff from developing countries.

We believe further that the Ad Hoc Committee to review Member States' voting rights and the role, effectiveness and membership of the Executive Board has yet to determine an optimal outcome. Indeed, the results of the committee meetings so far have not met our expectations, especially the issues of seat in EB and voting rights. We urge the Executive Board to reconvene the Committee. On the issues of the imbalance in the system of members' voting rights and the composition of seats in Executive Board, we would hope to see recommendations that are more palatable to all of those affected by the proposed changes.


Distinguished Board of Governors,

In conclusion, it is my delegation's hopes that this meeting will be able to not only address the issues, which I have raised today but to continue to address collectively and constructively the issues raised by other member states. It is important that IFAD continue to work as a team in order to achieve our common goals on helping member states to promote agricultural development and alleviate poverty in rural areas. Before this auspice occasion, I would like to re-affirm Indonesia's full commitment and support to the Fund — technically, morally and financially.

Before I conclude, I would like to invite all of you to the formal inauguration and reception for the exhibition on the 2 years commemoration of tsunami tragedy, which will be conducted following the conclusion of my speech.

Thank you.