KEYNOTE SPEECH BY Dr. SUSILO BAMBANG YUDHOYONO PRESIDENT OF THE REPUBLIC OF INDONESIA At the SIXTH ANNUAL CONFERENCE OF THE PARLIAMENTARY NETWORK ON THE WORLD BANK Helsinki, Finland, 23 October 2005 By teleconference

 10/24/2005

Bismillahi Hirrahmannirrahim

Vice President of the World Bank, Mr. Ian Goldin,
Distinguished Parliamentarians:
Ladies and Gentlemen,


First of all, let me give you the weather report from Indonesia. I don’t know what is the temperature in Helsinki, but here in Jakarta today, it is bright, and sunny, and warm, and breezy. I hope you will take this Presidential weather report into account when you consider the next venue of your annual meeting.

I am pleased to extend my warmest greetings and best wishes to the Parliamentarians from all over the world, including from Indonesia, who are assembling in Helsinki. And to those of you who are Muslims, please accept my best wishes to you and your family, in this holy month of Ramadhan.


I also extend my special greetings to the people of Finland. It was in Helsinki that the Indonesian Government signed a historic peace deal with leaders of the Free Aceh Movement (or GAM), which ended the conflict in Aceh. Many good Fins, especially former President Martti Ahtisaari, helped us to achieve that peace.

Today, the guns are silent in Aceh. GAM members have come down from the mountains, and have handed over their weapons to be destroyed, for a chance to pursue a new life of peace, prosperity and brotherhood. The people of Finland should be proud of what you have done in taking part in the promotion of peace in Aceh.

I am glad that Helsinki is now the host of a prestigious international gathering devoted to an issue that is dear to my heart: the Millennium Development Goals or the MDGs.

Let me offer several reasons why MDG is our best hope for humanity as we stepped into the 215t Century.

First, the MDG offers clear, concrete, quantifiable targets of development for the nations of the world to achieve. This means the community of nations no longer has to dwell on abstract concepts such as “world peace”, “justice for all”, “prosperity”, “freedom”, which all sounds nice but often do not give us the luxury of details.

You could argue all night long about what ‘justice” or “world peace” means, but no one can argue about the need to reduce maternal death by 75 %, or infant mortality by two-thirds. No one is against universal primary education. No one would be against reducing by 50 % the number people living on 1 dollar a day or about reversing the tide of HIV/AIDS. Once you move beyond abstract concepts into quantifiable targets, you have a much better focus on what needs to be done and how to achieve them. Take this from a military general, who would prefer clear objectives any day over vague theoretical concepts.

It is also politically pertinent that the MDG was not the brainchild of any one country or group of countries. It was not an idea imposed by any one country. The MDG was the result of a great collaboration of nations from all over the world, the condensed product of a global meeting of the minds. And it was designed to cater to the needs of all nations to eradicate poverty, regardless of political systems, cultural setting, social conditions, and historical background. The MDG therefore has universal relevance An Indonesian, an Indian, a Nigerian, a Polish, a Brazilian and an American, could all have equal ownership of the MDG without being defensive about it.

The third reason is that the MDG sends a message loud and clear that you are not alone. No matter which region you belong to and no matter the size of your economy, if you have poverty problems, you are part of a global movement that is trying to collectively rid poverty anywhere and everywhere. Poverty is everybody’s problems. Even if you don’t have pockets of poverty within your borders, one way or another, you can’t turn your back on it. We are all in this together. What a great way to start this new millennium.

The fourth point is that the targets of MUG is completely achievable but only if we are willing to spend our political capital and economic resources to achieve it. Remember: we were able to eradicate small pox several years ago with a cost of only US$ 17 billion, which was very cheap compared to the lives that were saved by it. And look at the price tag for achieving some of MDG targets. It is said, for example, that achieving universal primary education by 2015 would only cost US$ 10 billion per year, which is less than what Americans spend on ice cream per year. Making child-birth safer for mothers would cost US$ 12 billion per year, which is equal to what Americans and Europeans spend on perfume each year.

All of us, therefore, are stakeholders in the success of the MDG. If we succeed in reaching the MDG goals by 2015, which is entirely possible, it will be the single-most important achievement of our generation. And it will be an achievement that will benefit not only your neighbor, your community, your country, but our humanity.

Our common efforts to reach the targets of MDG reflect the larger challenge of development. Let me attempt to highlight several recent challenges that are pertinent to Indonesia’s experience and I believe they may also be relevant to your experiences as well.

The first challenge is something we all know too well about : the dramatic rise in the price of crude oil. This year, oil price sky rocketed from around US$ 20 up to
US$ 70 per barrel. This has placed a tremendous burden on the development budget of many countries, developed and developing.
 
This was particularly problematic for us in Indonesia, where oil price was heavily subsidized in a budget that assumed oil prices at 40 US dollars. With oil prices at around 60 dollars, we would be spending some 14 billion dollars in oil subsidies. That is almost a quarter of our national budget and that money could be better used to build schools, health care units, roads, and other programs to help the poor. That money can stimulate growth and productivity.

What’s more, the fuel subsidies were enjoyed mainly by the middle-class up, who CAN afford higher prices. Studies show that the richest 40 per cent of the population were receiving 70 per cent of the fuel subsidies. And they were consuming fuel recklessly, clogging up traffic. This was untenable.

Worse still, trans-national criminals were flourishing from the subsidies.
Smuggling of subsidized fuel last year cost our country nearly one billion dollars.
We had no choice but to rethink our energy policy and work towards a more
targeted approach of helping the poor.

The most difficult decision I have taken this year is to reduce these oil subsidies:
twice First, in March and recently early in October. It was a hard decision but it was definitely a necessary one.

The funds that we take out from the oil subsidies are used to directly help the poor. We are handing out cash assistance monthly to some 15 million poor and near poor households. This is one of the largest programs of this kind in the world. And as with any program of this size anywhere, there have been complications in its implementation but we are tackling those problems. Those who are trying to cheat the poor of their payments will be swiftly punished.

I realize that cutting the oil subsidies and increasing the fuel price is not an entirely popular policy. But I am convinced that the long-term gain outweigh the undeniable short-term pain. This subsidy reduction means that our subsidies next year will drop by more than 50 per cent to some 5.3 billion dollars. And already there are signs that Indonesians are conserving energy.

By cutting subsidies, the Government now have a new budget, which will allow us to allocate more resources to poverty reduction programs, to raise the living standard of Indonesians. We can now deliver direct cash to the poor and near poor, who are living under 1 dollar a day. We can allocate more funds to tend to the needs of the poor: their education, health, employment creation, low cost housing, the development of rural areas where 60 % of the poor reside, and the building of infrastructures in least developed regions.

In 2006, we will have a development budget that will give us greater funding resources to provide for the needs of the poor.

In health, for example, apart from aiming to meet MDG targets, we are providing free medication and health care to the poor. In education, we are aiming for free education up to grade 9, which is compulsory in Indonesia. These health and education programs are already underway this year.

Most importantly, the resources we have conserved can be used towards meeting the Millennium Development Goals. Making hard decisions enables us to focus on our long-term goals of reducing overall poverty. There are simply smarter, more targeted and less expensive ways to help the poor.

But we are not letting the poor go without a safety net. Kerosene, which is used by the poor for cooking, will at the time being remain at around 40 per cent of the market price.

Apart from the suffocating oil price, there is another global challenge that we should be aware of. For the past 5 years, we have talked extensively about this big MDG project to fight poverty on all fronts and in every region. But all our development calculations and projections would be ruined if humanity were to experience an avian flu, human influenza pandemic. This could happen if there is a mutation of the avian flu virus that can spread between humans. And this virus can mutate anywhere, in China, in Europe, in Southeast Asia.

This pandemic would be worst than the tsunami, which late last year killed hundreds of thousands but stopped after a few minutes. In a pandemic, the virus would spread after a few minutes it would kill more and more people in more and more areas. It would be our worst nightmare. The world has seen 6 pandemics in the last 3 centuries, 3 of them in the last century alone the 1918 flu, which killed between 20 to 50 million people; the Asian flu in the 1950’s killed 5 million people, and; the Hong Kong flu in 1968, which killed 1 million people.

The impact of a new pandemic on the economies of the world would be totally disastrous. Tourism would be hurt, as would be transportation, trade, manufacturing, agriculture, investment, consumer confidence. Just remember SARS, which killed several hundred, brought economic costs to the tune of US$ 30 billion. The economic costs of a new avian flu or human influenza pandemic would be beyond calculation.

A pandemic would be a huge setback to the global community to reach MDGs by
2015. That is why we must all be on the high alert. We must develop a
contingency plan if such a mutated deadly virus ever comes to form.

These cross-boundaries problems urgently require considerable aid, as expressed during the United Nations World Summit this September. We should not repeat past mistakes of not doing enough for global ills. More than 11 million children die each year from preventable diseases. Yet the Global Fund to Fight AIDS, Tuberculosis and Malaria has received only a little more than half of its operating needs, disabling any new projects over the next two years. This cannot stand. We must do more to help initiatives that address all our families.

Ladies and gentlemen,

Ultimately, the challenge of development is the challenge of governance. International cooperation is critical to achieving the MDG targets. But international cooperation is only half of the equation; the other half being good governance.

Every Government must ensure sound policies, responsive to the needs of its people. Every government must plan its own development strategy to reach MDG targets. Every Government must fight corruption. Every Government must develop a favorable investment climate. And most importantly, every Government must invest in its own people.

I am pleased to see that my Government’s efforts to combat corruption, building good governance, and making our economy more efficient, have begun to show tangible results both in terms of reaching the MDG targets and in promoting sustainable development for our country.

The employment of good governance is the shortest route towards reaching, even exceeding, the MDG targets. We in Indonesia have learned a lesson from our past. We must build a climate, which ensures growth as well as greater investment but we must also do so in ways, which will empower the poor in that growth. We cannot let growth lead to the neglect or marginalization of the poor. If we do not manage growth carefully, we will see greater gap between a sector of a population driven by progress and another sector stuck in poverty.

The total sum of our development strategy must be to allow the poor to have access to capital, health, education. They say that democracy is about equality of citizens. I say that development is about providing equal opportunity to all, especially for the poor.

There is another challenge of development: and that is the challenge of tolerance-building.

Development means different things to different people. Development also has many dimensions. But development these days is more than just the absence of poverty or the protection of the environment.

We now live in a world with rising ethnic and religious conflicts. In such a world, economic growth alone would not do. We cannot have development if hatred thrives, if bigotry and prejudice rule, if ignorance prevails, if conflicts flare. Communities who are constantly bickering with one another, whether about religion or ethnic differences, do not thrive: they stagnate under the weight of prejudice and ignorance.

That is why we have to start defining development also as tolerance building. Our development strategy must be geared to promote respect for diversity and to inculcate the values of tolerance and harmony in our homes in our schools, and in our communities.

A truly sustainable development strategy is one that considers not just society’s material needs, but also its heart and soul.

Ladies and gentlemen,

Let me close with one final thought. Last year, President Lula Da Silva of Brazil, in his address to this very forum, called for a bridge to be built between the two worlds of the rich and the poor.

Since then, something extraordinary has happened. When the horrible tsunami struck in December last year, we witnessed remarkable acts of sympathy and solidarity on a global scale that was truly unprecedented. Governments, corporations, and private citizens the world over got into the act of caring and contributing. We also see this during the hurricane Katrina, and more recently with the earthquake in Pakistan.

Global action, global compassion, global solidarity. These are not just empty words.

When I addressed the UN Leaders Summit in September this year, I stressed that “We must form a global partnership for development. Financing for development must flow. Exports of developing countries must gain access to markets in a rules-based international trading system. The developing countries must achieve good governance, fight corruption, make efficient use of their limited resources, and plan and carry out appropriate development strategies. The developed countries must fulfill their commitment to a genuine and mutually beneficial global partnership for development.”

Ladies and gentlemen,

We must continue to nurture this spirit of global solidarity and compassion. In that same spirit of generosity, we welcome the recent G-8 proposal to cancel 100 percent of the debts of 38 poorest countries in Africa and around the world. It is a good example of thinking outside the box and a good display of the kind of global cooperation and solidarity that we need in the years ahead.

And this gives us high hopes, as we discuss and plan, to reach the goals of
Millennium Development Goals.

Good luck with your deliberations, and thank you very much. (ENDS)