Bismillahirrahmanirrahim,
Assalamu'alaikum warahmatullahi wabarakatuh,
May peace be upon us all.
Excellencies Ambassadors, Ministers, and Heads of
International Organization in Indonesia,
Prof. Abhijit Banerjee, Prof. Benjamin Olken, and Prof.
Rachel Glennerster, Directors of J-PAL Global,
Prof. Dr. Muhammad Anis, President of the University of
Indonesia,
Mr. Peter Baxter, Director General of AusAid,
Prof. Rema Hanna and Mr. Hector Salazar Salame, Directors
of J-PAL Southeast Asia,
Dr. TM Zakir Machmud, Director of LPEM - UI,
Distinguished Guests,
Ladies and Gentlemen,
First of all, I would like to welcome all of you to Jakarta—a vibrant city which just two days ago celebrated
its 486th anniversary. For those who visit Jakarta for the
first time, you might find and experience the city's rich
blend of traditions and modernity.
It is indeed an honour and privilege for me to present
this keynote speech at the launcing of the Southeast Asian
Office of the Abdul Latif Jameel Poverty Action Lab---or the
J-PAL Southeast Asia. I highly value the choice of Indonesia
as the home for this prestigious institution, whose main
objective is to fight poverty. I welcome the decision to
place the institution at the Institute of Economic and Social
Research within the University of Indonesia's Faculty of
Economics (LPEM - FEUI).
I have full confidence that the regional office will help
governments in the region, through research and evaluation
activities, to identify and implement which development
programs are truly effective. I have personally benefitted
from the assistance and insights of Prof. Abhijit Banerjee
during my co-chairmanship of the UN High-Level Panel of
Eminent Persons on the Post-2015 Development Agenda. I
believe that we will all benefit from the J-PAL team in our
efforts to eradicate poverty and to achieve sustained
prosperity.
Indonesia thanks Australia for its support in the
establishment of the J-PAL SEA in Indonesia. This support
marks yet another manifestation of robust trilateral
cooperation between our two countries with the third party.
I will focus my speech on the reflection on various
paradigms and approaches in development, which is aimed
to achieve growth and combat poverty. I will also share with
you Indonesia's experiences in its development and poverty
alleviation efforts, in particular in the past ten years. Then, I
will touch on the critical importance of MDGs as well as the
Post-2015 Development Agenda in attaining global
prosperity and realizing the freedom from want.
Excellencies,Ladies and Gentlemen,
Poverty is as old as human civilizations. In every
civilization, there have always been those who are
privileged, and those who are underprivileged. Within
civilizations, stratification of wealth, power, and status
evolves—either by design or not.
In modern time, in particular in the era of colonialism,
the prosperity of the colonial powers were dependent on the
labor and resources of their colonial territories. This
situation had created a similar stratification at the global
level, which then perpetuate poverty in the colonial
territories.
The end of the Second World War marked a new
beginning in the endeavor by most countries to achieve
economic progress and social development. For newly
independent states, this venture was generally coupled with
the pursuit of national consolidation through nationbuilding efforts.
Along with the emergence of the Cold War, countries
took different paths in development. As a student of
economic development myself, I have had the opportunity to
study a wide range of development's models.
We know too well that during the Cold War era, the
capitalist model of development was competing with the
socialist model. At the same time, many countries had also
been inspired to transform from one stage of growth to
another stage. In Rostow's model of development, countries
were expected to change in a linear way through five
stages. From traditional society to a high mass
consumption society. I also noted that the Keynesian model
of economic development had inspired many developed
countries during the post-war economic expansion era.
Indeed, each model presents its strengths and
weaknesses. It had given a certain level of economic
stability to the countries which used it. But one thing is very clear that during six decades after the Second World War,
poverty was notable in what were called as developing
countries. The number of people who lived below 1.25 dollar
in those countries was generally high. On the contrary,
developed countries were attaining economic progress that
allowed them to elevate their prosperity. Needless to say,
pockets of poverty also exist in those countries, and they
are becoming more obvious with the unfolding financial and
economic crises in the present day.
Unfortunately, for many years, this situation had
created a North-South divide. It had led to the agglomeration
of rich countries in the North and poor countries in the
South. That is why, the struggle for the new world economic
order during this period had become high in the agenda of
the Group 77 and the Non-Aligned Movement.
I am glad that the divide was not widening. At the end
of the twentieth century, poverty rates began to decrease. It
was mainly because many developing countries achieved
fast economic growth. Many developing countries were
transforming into emerging market economies, including
China, India, and Indonesia. Some countries in the
Sub-Saharan Africa also enjoy remarkable economic
growth. Between 1990 and 2008, the global poverty rate
dropped from 47 percent to 24 percent, despite increase in
the number of world population.
As I transformed myself from a student of economic
development into a decision-maker and practitioner of
development, I learned a number of lessons from the
existing development's models. Let me share with you a
few of those lessons.
First, I believe that whatever model we utilize for
development, it must help improve the living standard of
the people.
Second, it must help end poverty and help empower
people to fight poverty.
Third, it must advance political, social, and economic
stability.
Fourth, it must help countries to go beyond economic
growth. It must help create an environ-ment in which people
are able to develop their full potentials and live productive
and creative lives in accordance with their needs and
interests.
Fifth, it must be inclusive. It allows and facilitates
participation of the people in the develop-ment process. It
provides the people with access to all basic needs.
Sixth, development does not end with growth.
Therefore, in my view, it must be sustainable. And
sustainable development is aimed to ensure an optimal
balance between economic growth, social equity and
justice, and environmental protection. This is what I call
"sustainable growth with equity."
And seventh, it must generate collaboration and
partnership. Through this, we can ensure finan-cing which
is much needed to support policies and strategies
implementation towards the eradication of poverty.
Excellencies,
Ladies and Gentlemen,
Let me now say a few words about Indonesia's
development and our efforts to end poverty.
Since its independence, Indonesia has implemented
various approaches and models of development. From
nationalistic and guided model of development to liberal,
and balanced models. I have carefully studied all these
models—their strengths and weaknesses, and drawn a
number of lessons.
Learning from the past experiences, and tapping into
the new context of Indonesian develop-ment, I have initiated
and implemented a "pro-growth, pro-job, pro-poor, and pro-environment" strategy of development for Indonesia.
And I call this strategy as "4 Track Strategy".
The strategy that produces growth to create jobs and
economic opportunities.
The strategy that stimulates growth to reduce inequity
and minimize poverty, and thus develop its people from low
to middle-class.
And the strategy that generates growth to safeguard
the environment and sustain it for the future.
This strategy has been translated into two main
approaches: one is through macro-economic policies, and
the other is through affirmative policies.
As part of the macro-economic policies, we take
measures that could create an environment conducive for
sustainable economic growth. These steps include efforts
in stabilizing the domestic economy, strengthenening
domestic consumption, increasing investment climate,
improving infra-structures, curbing inflation as well as
supporting the growth of small-medium enterprises.
We also aim to create an atmosphere conducive for
domestic and foreign investments. These include ensuring
political stability and legal certainty, continued bureaucratic
reforms, the promotion of good governance, and fight
against corruption.
And to boost investments, the Indonesian Government
has introduced the Master Plan for the Acceleration and
Expansion of Indonesia's Economic Development (MP3EI) in
2012. The MP3EI focuses on the acceleration of economic
growth with a value-added approach. It encourages
innovation, integrates sectoral and regional approaches,
and facilitates the rate of increase in private investment.
I am pleased to share with you all that since its launching, investment projects completed under the MP3EI
have reached 623.91 trillion rupiahs, allotted across 184
projects. The majority of investments came from the private
sector (44 percent), state-owned companies (19.5 percent),
the government through the state budget (19 percent), and
the rest from the combination of private and state-owned
enterprises.
As for the affirmative approach, we are reducing our
poverty rate through an inclusive program that we have
designed into four clusters.
The first cluster is on social protection. This includes
projects aimed at providing relief on poor households
through subsidy on rice, scholarships, health insurance,
and cash advances through the Cash Assistance Program
to ensure that they have access to sufficient food.
The second cluster is on community empowerment. It
is aimed at allowing the poor to develop projects based on
their own priorities, and to decide on how they can be lifted
out of poverty.
The third cluster is on enterpreneurship through small
and medium enterprises. This can serve as an important
foundation for further growth and development. This
includes improving credit access so that small enterprises
can develop and grow.
And the fourth cluster is on programs that focus on
assisting communities, especially the poor and
marginalized groups, including fishermen, in urban areas
and less-developed regions. It is aimed to reduce their
costs of living through the provision of affordable housing,
transportation, clean water, and electricity.
We are cautiously optimistic about eradicating poverty
through these policies and strategies. I am pleased that
Indonesia's poverty has decreased from 16.58 percentin
2007 to 11.66 percent in 2012. This means that we have
lifted up around 9 million people out of poverty in a period of 5 years. We are committed to keep this progress. We are
even aiming for further cut in poverty rate to between 8-10
percent by 2014.
In this connection, I would certainly like to invite the
J-PAL to help strengthen our efforts to combat poverty,
especialy through rigorous studies and impact evaluations
of our poverty eradication policies. I would like to obtain
insights from J-PAL's findings in order to enhance and
improve the ways of how to fight poverty in Indonesia.
Excellencies,
Ladies and Gentlemen,
Before I conclude, let me briefly shed some lights on
MDGs and the Post-2015 Development Agenda—the agenda
which I was personally involved in its preparation and
adoption, in my capacity as one of the Co-Chairs of the
High-Level Panel.
I must admit that MDGs have played a critical role in
reducing global poverty in the past thirteen years. Since the
inception of the goals in 2000, we have seen the fastest
reduction in poverty in human history: there are half a
billion fewer people living below an international poverty
line of 1.25 dollars a day. Child death rates have fallen by
more than 30 percent, with about three million children's
lives saved each year compared to 2000. Deaths from
malaria have fallen by one quarter.
This unprecedented progress has been driven by a
combination of economic growth, better policies, and the
global commitment to the MDGs
In two years, the target timeframe for the realization of
the MDGs will end. In this connection, I do hope that the
recent completion of the report on the Post-2015
Development Agenda will help countries to have a sense of
readiness and direction in defining and implementing their
national development agenda after 2015. Similar to MDGs. I also hope that the new development agenda will become an
effective tool for countries to track progress towards
ending poverty. And, it will help countries to build policy
roadmap for achieving the goals of the new development
agenda.
With this in mind, once again I welcome and
congratulate the J-PAL on the opening of its Southeast Asia
Office in Jakarta, partnering with the LPEM, University of
Indonesia. Let us join hands in ending poverty, and in
creating the region and the world which is free from want.
Thank you.
Wassalamu'alaikum warahmatullahi wabarakatuh,
Jakarta, 25 June 2013
PRESIDENT OF THE REPUBLIC OF INDONESIA
DR. H. SUSILO BAMBANG YUDHOYONO
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