Minister of National Development Planning/ Head of National Development Planning Agency (Bappenas) Welcoming Address 1

Transcription

1 Minister of National Development Planning/ Head of National Development Planning Agency (Bappenas) Welcoming Address 1 By Prof. Dr. Armida S. Alisjahbana ) Mr. Rajat M. Nag, Managing Director General of the ADB, Distinguished Speakers, Ladies and Gentlemen, A very good morning to all of you. It is my pleasure for me to welcome all of you to the Seminar on Asia 2050: Realizing the Asian Century. I thank every one of you for taking the time to be here today, to discuss the opportunities and challenges that face Indonesia s long-term development within the context of Asia We are truly delighted by your attendance. I am looking forward to having lively discussions in the Seminar and hearing your valuable insights and comments. As you may be aware, the Asian Development Bank (ADB) has launched the report on Asia 2050: Realizing the Asian Century, on May 10, 2011 at the Bank s Annual Meeting in Hanoi. At about the same time, President of the Republic of Indonesia has launched the Master Plan on Acceleration and Expansion of Indonesia Economic Development (MP3EI) on May 27, 2011 in Jakarta. The natural questions are whether there are specific 1) Welcoming Address, delivered by Minister of National Development Planning /Head of National Development Planning Agency, Prof. Dr. Armida S. Alisjahbana, at the Seminar on Asia 2050: Realizing the Asian Century, held jointly by Bappenas and ADB in Jakarta, July 12,

2 issues and policy concerns set out in that document that relate to Indonesia s long-term development vision and trajectory with the vision of Asia The ADB s report outlined that the rapid rise of Asia over the past half century has been one of the world s most successful stories of economic development. This report compares the potential outcomes for Asia under two competing scenarios: the Asian Century and the Middle Income Trap. In the first and more optimistic scenario, Asia continues its growth trajectory. Under this scenario, Asia would account for more than half (51 per cent) of global Gross Domestic Product (GDP) in Its per capita income could rise six fold to reach the global average and be similar to European levels today. Some 3 billion Asian could be moved out of poverty and deprivation and into affluence. The other scenario assumes that Asia s fast growing economies will fall into the middle income trap of slowing growth rates and stagnating income levels over the next 5 to 10 years. Furthermore, none of Asia s slow-growing economies would manage to accelerate its growth rate under this scenario. If this event occurs, Asia would account for only 32 per cent of global GDP in GDP per capita would rise to only just over half of that under the Asian Century scenario. The conclusion of the report is that Asia s current growth trajectory would not be possible with a continuation of current policies. More strategic policy actions are necessary at national, regional, and global levels. At the national level, some of the policy imperatives are: making growth more inclusive; modernizing financial sectors; managing massive urbanization; reducing radically the intensity of energy and natural resource use; harnessing the full potential of entrepreneurship, innovation and technological development, and improving governance 2

3 and transforming institutions. Regional cooperation and integration are also critical for Asia s march towards prosperity. At the global level, Asia will need to be more active in formulating the rules regarding an open trading system, stable financial system, climate change, and peace and security. These are the recommendations. Now, how about Indonesia? In terms of plan that will guide us for long-term, mid-term, and short-term, we already have the Long-Term National Development Plan (RPJPN) , the Master Plan on Acceleration and Expansion of Indonesia Economic Development (MP3EI) , and the Medium-Term National Development Plan (RPJMN) Distinguished Speakers, Ladies and gentlemen. May I draw your attention to several of our action plans drawn from the above national plans, and how they relate with the ADB s recommendations to realize the Asia 2050 Vision. Regarding inclusive development, our basic principle is Development for All and Growth with Equity which means that development is meaningless if the people become increasingly marginalized, and growth is meaningless if the gap between the rich and the poor becomes wider. Precisely, for this reason, therefore, we are carrying out an inclusive development, covering the whole segment of the society, both in the urban and rural areas. In the context of acceleration of poverty eradication, the government has implemented four poverty alleviation program clusters. In the first cluster, we provide social assistance and security to the low-income families as the targeted group. In the second cluster, we offer community-based program and budget under the National Self-Reliant 3

4 Community Empowerment Program (PNPM). In the third cluster, we empower the micro, small, and medium enterprises (UMKM), including the improvement of the business environment and the provision of Smallholder Business Credit (KUR). In the fourth cluster, poverty alleviation programs are implemented through provision of low-cost housing, lowcost public transport, drinking water, and low-cost electricity for the poors as well as improvement programs for fishermen and the urban poors. We are also planning to extend the coverage of social protection programs with emphasis on community ownership and initiative. These programs are essential to help people cope with inevitable setbacks. Against a background of population growth and rising expectations, it is necessary to provide such support without damaging the capacity to invest in education, health, and many other public goods. We will ensure that our pro-poor plans are well targeted. The bureaucratic reforms are consistently pushed, so our civil servants truly become agents of change for the creation of good governance. Through such an effort, we encourage the creation of a more responsive, transparent, and accountable government bureaucracy, including corruption eradication. It is in our common interest to stop all kinds of corruptive practices in the state bureaucracy. In addition, under the MP3EI we will amend or remove (debottlenecking) regulations that inhibit the implementation of investment. In order to accelerate infrastructure development, we then promote Public-Private Partnership (PPP) by revising regulations regarded as hampering the cooperation between the government and the private sector. Massive urbanization issues are addressed by promoting more balanced development between urban and rural areas and by developing urban infrastructure that facilitate the formation of more compact and livable 4

5 cities. For instance, the Metropolitan Priority Area (MPA) approach as part of MP3EI s main activities is adopted to promote more sustainable urban development for the Jakarta Metropolitan Area. In line with the increasing risk and impact of climate change, Indonesia s economic development has mainstreamed issue of environment climate change in its strategy and action plan of adaptation and mitigation. The strategies include among others forest, peat land, soil rehabilitation, river-basin management improvement, environment-friendly clean and renewable energy, urban mass transportation development, and waste management. The above strategies are to support our commitment to reduce green house gases (GHG) by 26 per cent from business as usual trajectory by Strengthening national human resources capacity, science and technology, as well as innovation and entrepreneurship, is one of the main strategies which is being enhanced in our Master Plan. The elements of this strategy include increasing the quality of education, increasing the level of technology competency and manpower expertise, promoting R&D activities, and developing national innovation system, including funding of innovation. In other words, the whole education system will need to be transformed. That is not just a matter of creating new places at various levels of education. Once again, quality will matter as quantity. Regarding regional and global cooperation and integration, we are aware in the 21st Century, an independent-active policy alone is not enough. We must pursue an independent, active and transformative diplomacy. We have to elevate the performance of our independentactive diplomacy, to one in which Indonesia can contribute to the solution of global and regional issues. 5

6 Indonesia has become more active in regional and international fora such in ASEAN, APEC, and the UN. Indonesia has become leader in conveying development issues, and has shared its succesful programs in poverty alleviation and climate change mitigation to other developing countries. We exchange the experience with developing countries through South- South Cooperation and the Triangular Cooperation. To conclude, I would like to remind all of us that despite the above policy actions that we hope will put Indonesia on the right long term development trajectory, there still remain several key development challenges. First, the average level of education is still low; many have education level just under Junior High School. Second, despite poverty rate has steadily declined, the poverty rate of per cent poor and 12.5 per cent near poor, a total of 25 per cent or 60 million people, are still a significant number. Third, despite efforts in bureaucratic reforms, governance is still an issue. And fourth, the nation s competitiveness has been ranked low due to low quality and insufficient provision of infrastructure. I wish you all having a very good time and fruitful discussion. Thank you. Jakarta, July 12, 2011 Armida S. Alisjahbana Minister of National Development Planning/ Head of National Development Planning Agency (Bappenas) 6