THE PRESIDENT OF THE REPUBLIC OF INDONESIA
ON THE OCCASION OF
THE 67TH ANNIVERSARY OF
THE PROCLAMATION OF INDEPENDENCE OF
THE REPUBLIC OF INDONESIA
BEFORE THE JOINT SESSION OF
THE HOUSE OF REPRESENTATIVES OF
THE REPUBLIC OF INDONESIA
THE REGIONAL REPRESENTATIVES COUNCIL OF
THE REPUBLIC OF INDONESIA
Jakarta, 16 August 2012
Assalamualaikum Warahmatullahi Wabarakatuh,
May we all be bestowed with prosperity,
Honourable Speaker, Vice Speakers, and Members of the House of Representatives of the Republic of Indonesia,
Honourable Speaker, Vice Speakers, and Members of the Regional Representatives Council of the Republic of Indonesia,
Distinguished Chairman, Vice Chairmen, and Members of State Institutions,
Excellencies Ambassadors of Friendly Countries, and Heads of International Agencies and Organizations,
Distinguished Ladies and Gentlemen,
Today, it is with profound gratitude to God the Almighty, Allah SWT, within the holy month of Ramadan, that we are able to attend the Joint Session of the House of Representatives of the Republic of Indonesia (DPR-RI), and the Regional Representatives Council of the Republic of Indonesia (DPD-RI). We are convening this Session this morning on the occasion of commemorating the 67th Anniversary of the Proclamation of Independence of the Republic of Indonesia, which will be continued this evening with the presentation of the Introductory Government Statement on the Bill on the State Budget for the 2013 Fiscal Year, and its Financial Note.
On this auspicious occasion, first of all, I would like to extend my best wishes to the Muslim community who are observing the fasting act of worship throughout the homeland. May our act of worship in this Month of Ramadan enhance our belief, devotion and veneration of us all, and may we get the blessing from Allah SWT. We are equally grateful that, in the last three years, our nation has celebrated the Anniversary of the Proclamation of Independence concurrently with the holy month of Ramadan. Last year, the 17th of August 2011 coincided with the 17th of Ramadan 1432 Hegira, when the Muslim community celebrated the Nuzulul Quran (Revelation of the holy Quran). This year we shall celebrate the Proclamation of Independence in close proximity to the Eid ul-Fitr 1 Syawal 1433 Hegira.
It is therefore appropriate for me, prior to delivering this State Address, to extend my felicitations on the Eid ul-Fitr 1 Syawal 1433 Hegira to the Muslim ummah across the nation. Being a common human being, who are not deprived of any shortcomings and errors, from the bottom of my heart I would like to express my sincere apologies for any physical and spiritual mistakes and shortcomings, minal aidzin wal faidzin. Let us make the momentum of this years commemoration of the Proclamation of Independence and the Eid ul-Fitr as a day of triumph, while simultaneously turning over a new leaf to usher in a future for the nation and state that is more prosperous, just, advanced, independent, and dignified.
Ladies and Gentlemen,
Four years ago, in 2008, we commemorated the 100th anniversary of the national awakening. The spirit of the national awakening that was kindled by Budi Utomo, more than one hundred years ago, reminds us all that in the second hundred years after the national awakening, our country can emerge as an advanced country. The condition is that we must have self-reliance, competitive edge, and advanced civilization. God willing, with our unity, togetherness and hard work all of those noble ideals shall be a reality.
When this country was proclaimed 67 years ago, Bung Karno, Bung Hatta and the Founding Fathers of the Republic had set the goals for the establishment of an Indonesia which is independent, united, sovereign, just, and prosperous, namely acountry that protects all people of Indonesia and their homeland, and to advance thepublic well-being, to enlighten the nations life and to participate in the establishment of a world order based on independence, abiding peace and social justice. The Unitary State of the Republic of Indonesia is established over the foundation of Pancasila and the 1945 Constitution, and is inspired by Bhinneka Tunggal Ika ~ unity in diversity.
In a span of 67 years of Indonesias history, governments have been present and carried out responsibilities alternately. Every government, since the government of President Soekarno, President Soeharto, President Prof. B.J. Habibie, President K.H. Abdurrahman Wahid, and President Megawati Soekarnoputri, has arduously worked and determined to build this country towards a better future. My predecessors had struggled to improve the peoples welfare and the progress of our nation and homeland. We all should express our sincere appreciation for their services and devotion. At the moment, we should be grateful that our country continues to advance,while overcoming challenges and trials. As a token of our gratitude to our founding fathers and our former leaders, let us continue to remain united and work even harder.
In this 21st century, our big mission is to continue the development of the nation towards a developed and prosperous Indonesia. In 2045, at precisely the centennial anniversary of Indonesias independence, we are determined to establish a robust and just economy; a stable and qualified democracy; and to create an advanced andsuperior nations civilization.
In the last five years, we continue developing towards a more prosperous, democratic, and just country. We are building a country in a dynamic global environment. It is an environment that provides opportunities, as well as challenges. It is an environment that also demands us to participate in establishing world peace, justice and prosperityas a goal enshrined in our constitution.
Ladies and Gentlemen,
History has recorded that, in the last five decades, at the beginning of this 21st century, the condition across the globe actually provides a positive and promising picture. There have no longer been any major wars involving a number of countries such as the post First and Second World War. The majority of the international community opts for the peaceful settlement of disputes.
However, the world continues to revolve. At this moment, we are facing a world economic situation characterized by uncertainty. The crisis in Europe continues unabated and there is yet to be light at the end of the tunnel. Developed countries generally experience stagnation, even recession. The economies of developing countries also experience significant slowdown. The global economy this year is predicted to contract from 4 percent to 3.5 percent.
The world economic situation is also characterized by the uncertain political transformation process in the regions of North Africa and Middle East. Any new tensions taking place in the region could potentially cause a rise in world oil prices. Meanwhile, in various parts of the world, many countries bear the brunt of the negative impact of the climate change. Droughts and floods often pose as the worst threats that could lead to food crises and rising world food prices. The price increases of soya beans in the international market for instance, were attributed to the drastic decline in production in a number of major soya bean-producing countries. Unless it is properly managed, this condition could detetriorate the global political and economic constellation.
Ladies and Gentlemen,
In the Southeast Asia and Asia Pacific region, we are still faced with traditional challenges, such as potential conflicts due to border disputes and territorial claims. We also still face a variety of non-traditional challenges that have a direct bearing on the safety and welfare of the peoples in the region. We are aware those issues could trigger new tensions and affect the common efforts to realize the ASEAN Community and cooperation in the Asia Pacific region.
Our country is strongly committed and continuously contribute to ensure the implementation of various agreements reached by ASEAN and the East Asia Summit. We must materialize what have been agreed upon during Indonesias chairmanship in 2011.The realisation of the ASEAN Community by 2015 constitutes an important aspiration that has become our priority in the Southeast Asian region towards one vision, one identity, and one community.
As we continuously support the democratization and Nation Building in Myanmar, in particular, we pay serious attention to the settlement of the humanitarian issue of the Rohingya ethnic community in Myanmar. With good intentions, I have sent a letter to President Thein Sein and urged the issue that originated from an inter-communal conflict be settled speedily, wisely and accurately.
We also continue to promote the cohesiveness and central role of ASEAN in facing various challenges in its vicinity, including the developments related to the South China Sea. We regret that the ASEAN ministerial meeting this year did not succeed in producing a joint communiqu. However, due to our proactive and intensive diplomatic measures, the cohesiveness and central role of ASEAN, have been reaffirmed and consolidated with the agreement on the six-point principles on the South China Seasince last 20 July. Therefore, through this forum I wish to express my gratitude to the ASEAN Leaders for the support and agreement in giving priority for the conclusion of the code of conduct in the South China Sea. With the code of conduct that we discussed in ASEAN and East Asia Summit in Bali in 2011, we will be able to maintain stability, security and order in the South China Sea.
Ladies and Gentlemen,
We follow attentively the alarming political and security developments in the Middle East region. In response to the developments taking place in Palestine, Indonesia consistently and as a matter of principle, always strives for the rights of the Palestinian nation to be independent and sovereign. The apprehension and struggle of thePalestinian nation is also the apprehension and struggle of our nation.
We also pay attention to the developments in Syria. Naturally, we do not wish to see human tragedy continue unabatted. In an active act, once the UN decided to send a team of observers, Indonesia immediately deployed a number of military observers to be part of that team. On various occasions, to diffuse the tension in Syria, we haveproposed a new UN mandate under Chapter 7, or Chapter 6 plus, of the UN Charter that provides for the authority to immediately halt the conflict and loss of life without debating the issue concerning the transfer of power in Syria. Indonesia deeply regrets the absence of agreements in the UN Security Council that has sparked continuous internal conflict and violence claiming more lives in Syria.
In the context of a more dynamic geopolitics and the disruption of world peace and security Indonesia continues to pay attention and contribute to the maintenance of international peace and security. Our country has become one of the main contributing countries in UN peacekeeping missions. Presently, with the establishment of the International Peace and Security Centre in Sentul, Bogor —which serves as a modern and integrated peacekeeping operation training centre— we shall be able to contribute more to the maintenance of world peace and security.
Ladies and Gentlemen,
Such is the world situation that we face today. It is a situation that warrants our vigilance and preparedness, at home and abroad. Actually Indonesia does not remain idle in addressing the various global and regional challenges of today. On the contrary, Indonesia has and will continue to make concrete contribution to the world. We continue to take an active part in various international organizations and become part of the solution.
Furthermore, from the various initiatives and ideas that we have proposed in response to the international dynamics, praise be to God, our voice has increasingly been heard and taken into account. We are more often asked to provide our opinions; What does Indonesia think? over a number of world issues. This proves that as an independent and sovereign nation, we can stand tall in the international arena.
It is still fresh in our memory when, 14 years ago, in the midst of a stormy crisis, the IMF came and offered a loan with conditions that actually further compounded our economic situation. Presently, at a time when our countrys economy keeps growing, the IMF comes not to offer loan, but to have a consultation and exchange ideas with Indonesia on overcoming the global crisis that is currently happening.
Ladies and Gentlemen,
As one of the members of the G-20, Indonesia consistently lends her support to the collective effort to achieve a global growth that is more robust, equitable, inclusive, and sustainable. We also continue to demonstrate our commitment to advancing the interests of developing countries in the G-20 forum. Consequently, we continue to encourage the coordination of the G-20 for the creation of food and energy security, infrastructure development, social protection, financial inclusion, fair trade, and job creation. All these efforts are undertaken not only to bolster our national interests in the international fora but also for the common interests of the nations of the world.
Moreover, in coping with the global economic crisis in the G-20 framework, Indonesia supports the connectivity of three arenas in the national, regional, and global spheres. In the national sphere, each country should endeavour to make its economy healthy. Inthe Eurozone region, we expect an immediate solution to be found for the economic crisis. Meanwhile, the Southeast Asia and East Asia regions are expected to be able to support the growth of the worlds economy. In the global sphere, it is obviously needed a collective cooperation, accurate policies, supported by trade and investment, and thecareful strengthening of the financial sector.
As a member of the United Nations, we are also committed to creating a sustainable global development. In order to address future post-2015 development challenges, new commitment is demanded. During the Rio+20 Summit Conference, we have submitted a post-2015 development agenda, namely sustainable growth with equity. It is an agenda of development which is sustainable and equitable. It is a development agenda that ensures the well-being and prosperity for all mankind without having to cause damage to the environment.
In order to formulate and provide recommendations on the global development agenda in the post- 2015 MDGs, the UN Secretary-General has appointed the President of the Republic of Indonesia, the Prime Minister of the United Kingdom, and the President of Liberia as Co-Chairs of the UN High-Level Panel of Eminent Persons on Post-2015 Development Agenda. Through this forum and in Indonesias capacity as one of the Co-Chairs we will contribute our thoughts and views in formulating the new global development concept and agenda which is Sustainable Development Goals (SDGs), as a continuation of the MDGs.
Ladies and Gentlemen,
Thank be to God, our country today presents itself as an emerging economy and has become the 16th world economic power. We have become a middle income country, with poverty and unemployment levels that are gradually declining successfully. We must be confident and have faith, when the time comes, God willing, we shall become a strong and developed country in Asia and held in esteem by the world.
However, today we ought to be vigilant to the fallout of the financial crisisinstigated by developments taking place in Europe. A valuable lesson learned we can draw from the crisis in the European region is that fiscal management that places emphasis on prudent principles needs to be applied. The government has taken, and will take, appropriate and calibrated measures. We have gained an indispensable experience when we managed to safely weather out the 2008 crisis.
This achievement was attributed to the collaboration and synergy between the central government, regional governments, business community, banking institutions, and other institutions, so the real sector continues to operate normally. We have provided a prudent fiscal stimulus. We exercised control to prevent any new wave of unemployment. We have also provided protection to cover, assist and alleviate the burden of the lower and middle class segment of society who were impacted by the economic downturn. It is precisely through such a combination that our economy remained solid, without any unemployment explosion, inflation was under control and other economic indicators remained in check.
Ladies and Gentlemen,
We have gone through the reform era for nearly fifteen years. It is in such a process that we have changed the tide of history by bringing to light a new order in the life of the nation and state. In a far safer situation, praise be to God, we have managed to boost economic growth even higher. However, we must remain vigilant. In the midst of an unfavourable volatile global economy, we should not miss any opportunities. The decline in exports must be offset by an increase in domestic investment. The potential of the domestic market should be capitalized on. We have continuously reduced logistic costs. Any barriers to business, investment and infrastructure development must be surmounted and removed.
We also continue to monitor closely the high price of world oil. The goal isobvious, namely to avoid the fuel oil subsidies from getting bigger and bigger and we can take anticipatory measures. We have to adopt policies that are not detrimental to the people. The government has to continue to make efforts to bring the fuel oil subsidies into a more sound basis through restrictions and austerity, so the burden to the state budget can be gradually reduced. In such a way, the fuel oil subsidies can be allocated to the intensification of infrastructure development. The Government also continues to explore, develop and utilize new and renewable energy as alternatives. Barring any dramatic changes in fuel oil prices, which is the soaring prices of fuel oil, we cannot simply raise our fuel oil prices. On the contrary we must do our best in finding the best possible solution to ensure efficient use of our fuel oil and a healthy state budget. The idea of gradually decreasing fuel subsidies is entertained solely for ensuring our countrys Energy Resilience in the future.
Apart from the dynamism of global oil prices, the international food prices have also become increasingly difficult to predict. The era of inexpensive food prices seems to be over. The high food prices are projected to take place for quite a long time. This is the reason, therefore, we have to provide adequate food supply through the optimum use of domestic resources. We have to secure the provision of staple food supply, especially rice. We must reach the rice surplus target of 10 million tons by 2014, even if it requires our hard work. We have to expand and intensify food self sufficiency.
The direction of our development is crystal clear. We have a main agenda, focused on improving the peoples welfare. As I have mentioned before, praise be to God, our economy continues to grow. We can survive the world crisis. Our economic fundamentals are getting stronger, our fiscal is relatively maintained, and poverty and unemployment levels are decreasing. This reality is truly heartening for us.
The population of our country this year that is more than 237 million people, whichconstitutes the fourth most populous country in the world. This increasingly larger population obviously carries challenges for us to rein in the population growth rate. The government continues to make serious efforts to reinvigorate the Family Planning (KB) programme aimed at creating healthy and prosperous families. We continue to improve the peoples quality of life, whether by raising the education and health levels, poverty alleviation, job creation, as well as by the provision of facilities for public services.
In order to optimize qualified and affordable education services for the whole of the population, the education budget continues to be increased. With the increasingly large budget every year, we stimulate education reform primarily in the expansion of access and the improvement of quality in all levels of education. It is precisely through such process that we have completed the Nine-Year Compulsory Education Programme. This Programme is gradually incorporated into the Universal Secondary Education Programme as the pioneer of the Twelve-Year Compulsory Education Programme. We want children of the nation across all corners of our homeland to attend a more equitable and qualified basic and secondary education.
Apart from expanding access to basic and secondary education level, access to high-level education is also expanded. We provide Operational Aid for State Universities and Mission-Targeted Scholarships for our brothers and sisters who are academically capable but financially handicapped. We will also gradually establish the Community College in every regency and municipality.
The noble aspiration to realize the Twelve-Year Secondary Education Programme should obviously be applied by taking into consideration the fiscal potentials of the central and regional governments. The Provincial Governments should play a bigger role in supporting the funding of this programme.
We realise that the success of the education programme, both primary and secondary education, is highly dependent on the teachers availability in terms of appropriate number, distribution, and competence. In conjunction with the endeavour of improving the teachers competence and welfare, we implement policies aimed at improving teachers quality. With these efforts, there is a positive correlation between theimprovement of welfare and the amelioration of their performance. After all, education is a long-term investment. We must be optimistic that, in the next ten or twenty years, the children of the nation would be ready to welcome Golden Indonesia.
Ladies and Gentlemen,
Of equal importance to education, the provision of health services is also improved, particularly for the lower segment of the society. Public Health Insurance for the Poor and the Near Poor in the form of Jamkesmas continues to be expanded. The disadvantaged people are now able to receive free health care and treatment in Public Health Centres (Puskesmas) and Hospitals. As the follow up to the adoption of Law Number 40 of 2004 on the National Social Insurance System (SJSN), the Government and the House of Representatives (DPR) have adopted Law Number 24 of 2011 on the Social Insurance Authority Board (BPJS). This means that gradually, the five types of social insurance, namely the health insurance, work accident insurance, old age insurance, pension insurance, as well as life insurance, would be enjoyed by the people. In this relation, at the beginning of 2014 the BPJS would be established and operated to provide the health insurance system nationally. In 2019, at the latest, all Indonesian citizens shall have health protection insurance.
The fulfilment of the right to healthy living for the entire populace without exception constitutes the main objective of the implementation of the National Social Insurance System. In line with the programme, more than 2.5 million expectant mothers are insured through the Childbirth Insurance. With this programme, God willing, we shalllower the Mother Mortality Rate (AKI) in line with expediting the attainment of the MDGs. They all constitute our answers in realizing health service expansion for the people. This is the essence of health reform.
Through health reform, we change the paradigm from merely receiving free medical services into becoming healthy at no cost. This is the reason that the improvement of health services and insurance as well as the development of other health sectors must be synergized with the population growth, scientific and technological advancement, environmental conservation, including cultural promotion and the paradigm of a healthy communal life. Through the health reform, we want to build the Indonesian people, who are not only physically healthy, but also spiritually sound, so as to be able to build a strong, dependable and intelligent nation.
Apart from the National Social Insurance System, we also try to realize a secured livelihood by synergizing the programmes of the peoples empowerment; small, medium and micro enterprises promotion; and the pro-people programme. All of the poverty alleviation programmes will be transformed into programmes that are able to meet the basic needs of all the people equitably, including ensuring the creation of sustainable income generating activities. The efforts to increase income are coupled with the efforts to maintain the peoples purchasing power. We also keep the inflation rate in check at a secure level to ensure the affordability and accessibility of goods and services that are needed by the people.
Distinguished Ladies and Gentlemen,
In order to alleviate poverty, the government has launched programmes through four clusters. The first cluster is the direct aid of affordable rice for underprivileged people (Raskin), School Operational Support (BOS), and Aspiring Family Programme. The second cluster, developing the Self Supporting National Community Empowerment Programme (PNPM Mandiri). The third cluster, small, micro, and medium enterprise-based programmes through the Smallholder Business Credit (KUR) and Corporate Social Responsibility (CSR). And the fourth cluster through inexpensive houses, affordable public transportation, more equally distributed clean water and electricity, and the improvement of the livelihood of fishermen and poor urban citizens.
The Government continues to consider and endeavour in enhancing the welfare of the workers, both with regard to an increasingly adequate pay and any other forms of allowances. We wish the business community to grow and develop, and this growth also brings along an improvement to the welfare of their workers. Therefore, the tripartite integration and cooperation need to be further encouraged and invigorated.
Sustainable development for allhumans and environmenthas become our common commitment as citizens of the world. With a view to garnering global solidarity, three years ago, I have conveyed our voluntary commitment to reduce greenhouse gas emissions by 26 percent of the projected emissions of our country in 2020. As an elaboration of that commitment, the Government has adopted the National Plan of Action for the Reduction of Greenhouse Gas (RAN-GRK) that we apply to five main sectors, namely forestry and peat lands, agriculture, energy and transportation, industry, and waste. In addition, in order to enhance environmental supporting capacity, one billion trees have been planted annually.
From what I have conveyed earlier, obviously the success of the development weaspire for, could be gauged by whether we are able to enhance the quality and level of the peoples living standards in a more just and equitably distributed manner. We must provide the opportunities for the increasing numbers of our people who have permanent jobs with adequate income for themselves and their families. The people should be able to have access to electricity, clean water, and comfortable, safe, and healthy housing. Our children and our youth could grow into healthy and intelligent beings. Our environment should always be serene and everlasting. That is precisely the Indonesia we want to build. That is the Indonesia we want to bequeath to our children, grandchildren.
Distinguished Ladies and Gentlemen,
The development framework and the Pro-People programmes I have launched since the beginning, remain based on four main pillars: pro-growth, pro-job, pro-poor, and pro-environment. It is in this basic framework that the equitable distribution of development benefits to accelerate the creation of social justice and poverty alleviation continues to be a main priority.
We have brought about significant changes and progress to this country. Our country is regarded as a country with a bright future. Despite the numerous shared progress that we have achieved, we obviously cannot turn a blind eye to the problems and challenges that we are still facing.
The challenge to the Indonesia of today and of the future is how our nation is able to adapt to the changing times. How we should expand infrastructure. We must ensure that the investment climate and legal certainty do not become obstacles. We also still have to lower the levels of poverty and unemployment. The equitable distribution of development should continuously be carried out. These are the challenges we must address ahead.
Distinguished Ladies and Gentlemen,
At the moment, political stability is relatively kept under control. Democracy and respect to human rights are highly upheld. Ever since centuries ago, the great house of our country has been decorated with diversity. The diversity provides a characteristic colour in the portrait of Indonesian-ness. We respect and appreciate this diversity by allowing elbow-room for movement under the aegis of decentralization and regional autonomy.
The Government applies an asymmetrical decentralization to our brothers and sisters in Yogyakarta, Aceh, Papua, and West Papua. The on-going decentralization processactually has not undergone any principal changes. What the government has carried out was just a better and effective reordering with the purpose of improving the peoples well-being.
We also continue to consolidate democracy and development in the Veranda of Mecca, Aceh merits to be considered as a model of peace, diplomacy and democracy. Aceh has turned into a portrait of history that clearly depicts that conflicts could be solved by the mechanisms of diplomacy and democracy.
In the Eastern Part of Indonesia (KTI), we are attaching greater attention to accelerate development there. We want to carry out development for all. A just and equitable development. We should never tire of stimulating a just and inclusive development. By taking into account the various characteristics of different regions, the Governmnet continues to intensify a regional-oriented development with a view to distributing growth and justice all over the country. Such endeavour can be realized with the support of the local governments in utilizing the budget optimally, without the tendency to increase personnel expenditure unproportionally. There should be an increase in the composition of the local budget utilization that is more oriented to the enhancement of the regional production capacity.
Ladies and Gentlemen,
Development gaps, either between groups in the society or between regions that are relatively still wide, continue to be narrowed. One of the efforts to lower unemployment is, among others, carried out by creating formal jobs, that are primarily supported by the industrial development in the framework of the Master Plan for the Acceleration and Expansion of Indonesias Economic Development (MP3EI). The MP3EI also bolsters economic growth that is innovation-generated. The asset of knowledge should be generated through the consolidation and application of knowledge and technology. Herein lies the importance of the synergy between universities and research institutions with regard to industrial development as offshoots of the MP3EI. In this manner, the utilization of natural resources with added values can continue to be intensified.
Since the MP3EI was launched on 27 May 2011 until end of July 2012, it has achieved substantial results during its implementation. 135 infrastructure development projects and a real sector with an investment value of more than Rp 490 trillion have had ground-breakings. The strategy of the acceleration and expansion of infrastructure development is a breakthrough to avoid the middle income trap. It is precisely through this method that we shall stay clear of the development stagnation often suffered by middle income countries.
Likewise, we must overcome together the gap between regions, between cities and between sectors. In the Eastern Part of Indonesia, we try to overcome high prices, to improve the peoples access of obtaining decent education and health services, to consoslidate fishing and marine sector, and to develop tourism and creative economy, based on local traditions and culture. Not to be overlooked, we try to improve the living standards of the Isolated Traditional Communities (KAT) in numerous hinterland areas. As I said earlier, through the MP3EI, we stimulate the development of the corridors in Kalimantan, Sulawesi, Papua and the Moluccas, as well as in Nusa Tenggara Islands.
Our brothers and sisters in Papua are always close to our hearts. The Government realizes the complexity of the issues that require specific, fundamental and comprehensive measures. We close our ranks to accelerate development for the Papuan people. For this reason, therefore, the Special Autonomy for Papua and West Papua becomes our basic framework in managing public services, development and local government. The government has applied an integrated approach to accelerate development in the land of Papua. To develop the land of Papua under the agis of the Unitary State of the Republic of Indonesia (NKRI) is the collective duty of all the nations sons and daughters.
For this reason, the government has taken initiatives to accelerate development in the land of Papua, with the required agenda and budget support. To ensure the development in Papua and West Papua is carried out in accordance with the plan and policy, both by the central and regional government, the government established the UP4B (Unit for the Acceleration of Development in Papua and West Papua), whose task is to ensure synergy, synchronization and coordination of all actors of development. In this manner, we can systematically accelerate the improvement of the peoples welfare in the Provinces of Papua and West Papua.
Ladies and Gentlemen,
Our nation is a great nation with a vast territory. In order to preserve its sovereignty, we need an Indonesian National Defence Force (TNI) that is tough, reliable, and professional with the support of a modern main defence weapon system (alutsista). Over the past few years, taking into consideration the increasingly improved growth of the national economy, the development of the defence sector has become one of our main priorities in catching up with our retardation. The increasing additional budget foralutsista expenditure is aimed at improving the readiness and reliability of the TNI in safeguarding the territorial sovereignty of the state, in executing defensive tasks of the state during peace time, and in participating in the maintenance of world peace.Today, the TNI has turned into the states defence force that is increasingly more modern and professional. This is the successful result of TNIs Reform that has been carried out.
The TNI presently appears with the posture of a more modern state defence force. The power and ability of the navy, army and air forces shall be enhanced in order to project a deterring effect, particularly in border areas and outermost islands. In todays situation of peace, the TNI plays an active role in non-war military operations, especially in natural disaster mitigation and peace operations abroad. Along with the improvement of the weaponry quality, we shall also enhance the soldiers professionalism and well-being.
Indonesia continues to raise her vigilance in addressing issues related to terrorism, land disputes, horizontal violence, narcotics and illegal drugs. With respect to terrorism, I would like to extend my appreciation and gratitude to our National Police that has concretely been able to prevent and erradicate terrorism. Together with the people, we must work shoulder to shoulder to prevent terrorist acts, which will adversely impact on domestic stability, the loss of innocent casualties, and harm Indonesias image in the international setting.
Regarding land disputes, the government has created an integrated team consisting of the National Land Agency (BPN), the National Police and related offices. I have tasked the team to find the best possible solution, so as to ensure that the people acquire their rights to their land while still preserving and enforcing the rule of law. In any case, the settlement of land disputes must combine the legal approach with the socio-cultural solution, so that the sense of justice can be better served. We certainly do not wish land disputesto degenerate into violence and acts of taking the law in their own hands.
Ladies and Gentlemen,
For the last one year, I noted that there have been a number of issues that have drawn the attention of the public. It becomes our homework to overcome and manage those issues. In facing the issues that I am going to mention after this, the government will continue to work hard in order to fulfill its duties and obligations.
There are six important and actual issues that I am going to explain in this occasion. The six issues are, namely, Corruption Eradication; Bureaucratic Reform and Good Governance; Violence and Social Clash; Investment Climate and Law Certainty; Infrastructure Development; and Fiscal Policy in facing the global economic crisis.
The first issue is Corruption Eradication. Corruption is an extraordinary crime that haveundermined the foundation of the development. Education, health, and infrastructure that are supposed to improve significantly and could benefit the society, face some obstacles because of this unsavory practice. In an unequivocal and explicit language, I have once said there should no longer be any connivance between the government, the House of Representatives, law enforcement officers, and the business community in draining the states coffers, both in the State Budget and the Regional Budget. I have to admit there remain a large number of perpetrators of the criminal act of corruption, whether from the ranks of the government, regional governments, the House of Representatives (DPR) and the Regional Representatives Council (DPRD), up to the law enforcement officers.
We must also admit, the domination of these corruptive practices tend to spread and swell to the regions, from the recruitment of civil servants in the bureaucracy, in the procurement of goods and services, until in several public services. The modus operandi are also diverse, starting from a simple bribery and gratification, until the most complex that leads to the criminal act of money laundering.
This is the reason why we must continue to eradicate corruption. The National Police of the Republic of Indonesia, the Attorney Generals Office, and the Corruption Eradication Commission (KPK) as the law enforcement institutions must truly be mutually supportive and reinforcing. In addressing this issue, my position is clear and firm: law must be enforced indiscriminately, unselective and give a deterrent effect, as well as guarantee justice and impartiality before the law.
In every occasion, I have asked BPK, KPK, Polri, Attorney General, and BPKP to completely prevent corruption that misapropriate the APBN and APBDs funds. Our country works hard to increase economic growth and the state revenue, so that we have bigger budget to finance the development. Imagine if the fund provided in the APBN and APBD, that we get through hard work, were corrupted.
The war drum against corruption should not slacken. We must eradicate corruption. Eradicating corruption as an extraordinary crime should be carried out with extraordinary measures as well. There should not be intervention to the law enforcing institutions in the fight against corruption. Such intervention, in fact, will trigger a sense of injustice. Let the law work with its own mechanism and way in finding justice.
My position is crystal clear, there must be a joint cooperation between the law enforcement agencies, instead of competing in an unhealthy manner and undermining each other. Upholding the law indiscriminately is the key. Should there be any divergence of views, the legal due process should take its normal course, in compliance with the prevailing legislations. For this reason, therefore, law enforcement lies in the impartiality of revealing any improprieties, instead of concealing them.
In this regard, the role of the Corruption Eradication Committee is extremely important.We truly thank the Committee for its firm acts and hard work. Certainly, we also encourage the Police Force, the District Attorney, and the Supreme Court of Justice to do the same.
Ladies and Gentlemen,
The second issue on bureaucracy reform and good governance has become essential, considering that to govern this great and vast country we need serious efforts from all governmental apparatus from the centre to the regions. We all share roles and responsibilities. The success of what we have decided in Jakarta is also determined by the governments in the regions.
The regional governments, starting from the province, regency, municipality, district, up to the village and sub-district, have become the spearheads of public service in all corners of the country. Those who provide services morning and noon, day and night, they are the development heroes who devote themselves unselfishly.
In managing the government, I have always emphasized all bureaucratic ranks must be able to improve their roles and functions more optimally and maximally. Public service must become one of the fundamental parts in bureaucratic reform. The acceleration of bureaucratic reform is non-negotiable. The acceleration of the bureaucratic reform is crucial in creating a reliable, professional, and clean government apparatus, based on the principles of good governance and clean government.
We must complete the management of government by the expansion of public participation, starting from the participation of development until opening up public access in order to participate in the control of government management. This is an essential part of the government involving public participation. This is the essence of open government.
Even though we continue to intensify the bureaucratic reform we still find bureaucratic ranks that have yet to be responsive, tend to be negligence, and even hinder the course of development. These attitudes and behaviours should be changed andterminated.
The third issue is regarding social harmony and social clashes. This issue becomes a serious problem. We have to prevent ourselves from horizontal violence, whether it is triggered by land dispute, the excess of regional election, or the difference in views and believes. We have to prevent ourselves from selfish acts and to impose ones will on others. Our country should indeed become the window of harmony and tolerance, not conflict and horizontal violence.
Actually these acts of violence and the communal conflicts could be prevented when all parties care, are responsible and constantly secure harmony and tranquility of the life of our society. When all parties concerned care and continue to work, starting from the regents or mayors and its apparatus, the police and the TNI territorial command, community and religious prominent leaders, certainly these violent acts would not have taken place, nor the taking the laws into their own hands as well as communal conflicts.
However, when the violent acts have taken place, including horizontal conflicts, the state police must immediately take a quick, firm and appropriate action. Delays and incomplete tasks cannot be tolerated. Nor do we tolerate any impression that the police has turned a blind eye. What is important is to avoid and prevent any fatalities from any party. A tranquil environment is essential for the serene life of the community. Including the serenity and tranquility of the religious community to practice their respective religious rites.
Ladies and Gentlemen,
The fourth issue is related to the investment climate and legal certainty. We realize thatwe still experience a number of obstacles in the investment climate and legal certainty, which are complained by many parties. Those two aspects have the potential forcreating uncertainty, high-cost economy, and the loss of opportunity to achieve a higher and more qualified growth. There are also complaints when the matters on the central government level have been taken care of, the obstacles eventually come from the regions. We need to work hard to reduce the high-cost economy. We have and are in the process of evaluating 13,520 Regional Regulations, and annulled 824 Regional Regulations.
Moreover, in order to boost the flow of investment, both Foreign Investment (PMA) andDomestic Investment (PMDN), we need to balance it with the speed and ease of getting business licences. We have pressed and accelerated the issuance of business licences from 60 days to 17 days. Of equal importance, law enforcement efforts are crucial in instilling a greater sense of security and stability in investment.
The fifth issue on infrastructure building, which is closely related to the fourth issue I mentioned previously. Because when investment climate is considered conducive and legal certainty is in appropriate place, there will be great opportunities for us to build more infrastructures all across the country. The potentials and wide open opportunities in our country will certainly attract investors to invest. This is the golden opportunity that we cannot afford to miss.
In order to further optimize upon the golden opportunity, the availability and quality of the infrastructure is a necessary condition. We need to support the national effort in accelerating the development of infrastructure in order to guarantee the sustainability of growth and equity of economic development, expansion of job opportunities, andthe creation of new business sectors.
The biggest challenge in building infrastructure today is the high demands from all across Indonesia, while our state budget is relatively limited. Although in the last few years we have increased our capital expenditure and infrastructure building budget, our state budget remains limited. Therefore, I asked regional governments to also allocate its regional budget for capital expenditure instead of spending it on personnel expenditure and routine expenditure. God willing, in 2013, the financial transfer to the regions will account for more than Rp. 500 trillion. I also call for the participation of state owned enterprises and private sector to cooperate with the government to accelerate and expand infrastructure building. Otherwise,Indonesias economy with 6 percent average growth today and a great investment opportunity, will not reach the highest possible rate.
Finally, the sixth issue is on fiscal health. In the midst of the uncertainty surroundingthe global economic environment, we have become more challenged to be able to maintain fiscal health. Striking a better balance between a fiscal policy that is able to provide a development stimulus while also prioritize the spirit of prudence needs to be conducted.
The ratio of budget deficit to the total amount of GDP needs to be maintained at a safelevel. Moreover, the efforts to improve the quality of state expenditure continue to be carried out, both by creating efficiency, guaranteeing the fluidity of budget absorption, or eradicating the sources of budget leaks.
I would like to emphazise the importance for us to have a sound fiscal policy. The ongoing crises befelling many developed countries were primarily caused by their unhealthy fiscal state. The high defict, as well as the debt ratio vis-a-vis GDP. Let us see to it that our fiscal state does not become unhealthy and vulnerable like experienced by many countries.
The problem on subsidies rate that is too high also reduces our fiscal space. Let us with full awareness and responsibility recalculate the amount of subsidies to make our economy in better condition that at the end the subsidies are correctly targeted and allocated.
At the final part of this State Address, I would like to express that our nation todayemerges as a nation not only enjoying an extremely great freedom, but also a nation endowed with a more democratic state institutional system. Some of the most important are, that our country has changed in a very fundamental manner; from an authoritarian and centralistic government to a government which respects the freedom of expression, of association and of assembly and of union, and adopts decentralization and regional autonomy.
We have made a major breakthrough in terms of the relationship between the centre and the regions. The world sees the decentralization and the regional autonomy as a big bang and even as a quiet revolution. It is precisely in this relationship between the centre and the regions that we shall continue to consolidate authority and provide the increasingly large financial resources to the regions. Whatever is the case, advanced and prosperous regions are important foundations to creating national competitiveness. We are therefore continuing to encourage the synergy between the central and regional governments.
The regional institutional capacities must also be enhanced. Should there be any negative excesses in the execution of decentralization and regional autonomy, let us put it in order again properly. We put in order problematic Regional Regulations, business permits in contradiction to the rules of the game and the optimum role of the Governor as representative of the central government in the region. For this purpose, therefore, let us give a meaningful substance to the relationship between the centre and the regions as a harmonization of interest aimed at reinforcing the bonds of NKRI (Unitary State of the Republic of Indonesia), by maintaining the sound democratic atmosphere and the special and unique diversity of the regions.
Ladies and Gentlemen,
We have chosen democracy as the means towards prosperity. It is a process of democracy that gives priority to cleanliness in its execution and the impartial legal certainty when a dispute occurs. It would be impossible for us to reduce democracy that will separate us from unity, cohesion and integrity as a nation. Neither can we afford to downgrade democracy that would conversely lead us away from the peoples interest and well-being.
Democracy should be devoid of evil traits. We believe democracy without freedom will turn into a tyranny, but an excessive democracy and not supplemented with a responsibility in making expression, will turn into anarchy. A number of excessive elections of the regional heads in several placeswhich ignore sound and mature democratic principlesquite often become anarchist in nature. This is the reason why we have to minimize the impact of such improper democracy.
We must have a firm belief that we are accelerating the consolidation of democracy. Without a strong democracy –which is sustained by the upholding of law and justice– morality and political ethics will be destroyed. When the law is not upheld and our democracy is fragile, politics will instead take a divergent road. Consequently, in democracy we have to enhance the values of tolerance, diversity, and mutual respect. This is the essence of the principle of coexistence in diversity, and the principle of freedom within the frame of tolerance. That is the essence of the motto Bhinneka Tunggal Ika (Unity in Diversity). Patience, tolerance, and mutual respect are the potentials that do not only serve as pillars for the life of a multicultural nation, but they also become tangible materialization of ourselves as a nation that is civilized. That is the face of our blooming democracy.
Ladies and Gentlemen,
It is time for us to prepare for a new role in the 21st century. The challenges we face in this century are not lighter. However, if we keep on working and continue working, we shall overcome them. We need to organize our perspective in managing change and development. Should we join hands together in all seriousness and make correctionsand improvements, we could achieve even greater achievements.
We can learn from experiences, errors, past mistakes, so that they are not repeated. We also have a conception about the things that we need to make right, today and in the future. What we may still possibly need is self confidence that we ourselves are the ones who shall determine our own future that we will create. We are the ones who will determine the future that we wish to realize.
Honourable Speaker, Vice Speakers, and Members of the House of the Representatives of the Republic of Indonesia,
Honourable Speaker, Vice Speakers, and Members of the Regional Representative Council of the Republic of Indonesia,
Distinguished Ladies and Gentlemen,
In concluding this address, I would like to appeal to all components of the nation all over the country, let us make the commemoration of the 67th Anniversary of the Independence Proclamation as an inspiration of a superior and advanced country amongst nations in the world.
As Head of State and Government, I would like to express my heartfelt appreciation and gratitude to all the Indonesian people wherever they may be, for their participation, patience and support in the development that we are carrying out together. I would also like to convey my sincere gratitude for the good cooperation that has been established this far between the government and the House of Representatives, the Regional Representative Council, and other State Institutions.
To our brothers and sisters who have dedicated your services in all corners of the Archipelago, in the outermost islands, in the hinterlands, at the foot of far away hills and distant places, I shall not forget your struggle and dedication in the midst of all that quietness. Some of them are present with us today. Those who are at the upper balcony are exemplary citizens and sons and daughters of the nation with high achievements intheir respective dedicated services. I am so proud of their achievements, work ethos and exemplary spirit of all of you.
Finally, in this full of grace month of Ramadan, may God Almighty, Allah SWT, constantly bestow His blessings on our endeavours to build our just, prosperous, safe, peaceful and thriving nation and state.
Long Live the Republic of Indonesia!