Revitalizing ASEAN Development Planning Institution Cooperation :
TOWARDA STABLE, PROSPEROUS, AND HIGHLY COMPETITIVE ASEAN ECONOMIC REGION
By
Dr. Sri Mulyani Indrawati
Allow me first, on behalf of the Government of the Republic of Indonesia, to wish you a warm welcome toIndonesia, and to express my thanks for the presence of participants in this Fourth ASEAN Senior Officials Meeting on Development Planning (ASEAN SOM-DP).
Our presence in this event is an important step towards enhancing the spirit of cooperation and solidarity among fellow member nations of ASEAN. It is the sense of cooperation and solidarity that forms the background of this meeting. I can recollect that it was H.E. Fidel Ramoswho in 1993 had, for the first time, initiated the idea on the importance of increasing cooperation among the planning institutions within ASEAN, through the arrangement of effective consultation forums among the planning institutions. It is in this context that we have conducted the SOM-DP three times, on top of having other forums in this regard.
This Fourth Senior Officials Meeting on Development Planning, particularly for Indonesia, has a very important significance.After having been preoccupied with the efforts ofaddressing domestic changes in the last eight years, for overcoming the crisis as well as for putting in order the social and political institutions so as to become more democratic, we believe that the time has come to enhance cooperation with our closest neighbors, namely ASEAN member countries. We are convinced that only with close cooperation will greater opportunities be created for enhancing the welfare of each of the nations and of the region as a whole. In this regard, I think we need to update ourselves with the current development policies and the role of planning agenda in each of ASEAN member countries. This will allow us to seek the possible areas of cooperation among us. Therefore I would like to talk about Indonesia’s future reform agenda as sketched out in the government’s medium-term development strategy.
The strategy outlines the key policy priorities and direction of the new government under three agendas consistent with the President’s vision of an Indonesia that is safe, just and prosperous. The strategy is formulated after the first ever direct presidential election, which is developed and derived from the vision of the elected President and promises openly made during the presidential election campaign. The medium-term development strategy is therefore a reflection of our public accountability mechanism which is based on democratic, open and transparent system of government.
The strategy has a substantial focus on policy of strengthening and re-building institutions. It gives balanced attention between the social agenda, the political agenda,andthe economic agenda. In the past,Indonesia was focussing only on achieving high economic growth,while institutional development capacity building had beenlack behind. These approaches have led to weaknesses of our system and institution, which then made us unable to withstand the economic shock. The economic crisis in 1997/98 brought us a dramatic waves of changes and has led Indonesia into a complicated and yet relatively smooth fundamental transformation of our political, legal, and economic system. I must say that this fundamental transformation and the process of re-shaping Indonesia is still continuing, and we startenjoying the fruits as well as the challenges come from these endeavours.
Our strategy aims also to shift the boundaries of government-society relations. I also reflectthe strong demands from the community for consolidation of our political and economic reforms. The strategy aims to enhance the role of civil society in the political, policy-making process and economy through institutional changes and greater individual rights and responsibilities. For example, in conflict resolution and settlement together with the government will have to play a joint and mutual more active role in defining and maintaining the resolutions. An important cross-cutting theme in the strategy is the mainstreaming poverty and gender. This also means that implementation and monitoring progress will have to be a shared responsibility between the government and the community including, among others, regional parliaments, civil society groups, businesses, unions, and the media.
Let me now turn briefly to our policy agenda and issues that we are facing. The first agenda focuses on creating an Indonesia that is safe and peaceful. The second agenda focuses on establishing justice and democracy for all citizens. The third agenda is on improving welfare of all citizens and deals with economic and social sector policies and programs.
I would like to touch on each of these three agendas,turning first to the agenda on creating a safe and peaceful Indonesia. Increasing crime rates, including trans-national crimes, sectarian and regional conflicts and terrorism have created an insecurity and vulnerability and low trust society. The conflict hurts the economic and social fabric of the inflicted communities. At the same time the community demands an improved safety and security.Our agenda will focus on resolving these problems through a multi-sectoral approach, including improving capabilities of the security apparatus. However, improved security will not be effective unless we also deal with the root causes of crimes and conflicts, which lies on the social and economic sectors. Therefore, multi-program approachtogether with people and civil society participation in the process have been adopted to solve the problem comprehensively and sustainably.
The strategy will combine civil society initiatives, a national reconciliation process, and implement mechanisms to identify and prevent potential conflictsfrom erupting. The strategy will also coordinate programs designed to improve community’s awareness and respect for civil society, and protection of human rights and minority groups.
Turning to our second agenda on consolidation of political and legal reforms, I would like to highlight that the focus is on building modern institutions based on good governance.I would like to focus on three key elements of this agenda – legal reform, improving delivery of public services, and resolving implementation weaknesses in decentralization.
The government will continue with the legal reform agenda. In particular, to correct regulations and laws that are contrary to the prinsiples of justice, legal certainty and nondiscrimination. The enforcement of laws is deemed as selective and non-transparent,which undermines the people trust in the government. A key priority is to establish mechanisms for the review and reform of these laws, regulations and to implement programs to improve transparency in legal enforcement.
A second priority is to improve the delivery of public services ranging from the delivery of education and health to the issuance of business licenses and permits. Weak administrative capacity, poor civil service incentives, and endemic corruption in the bureaucracy are the primary causes of poor service delivery. Thus, our medium strategy will focus on civil service reforms.In addition to improving salaries and insentives, the program will include improvementin transparency, openness, as well as accountability of the civil service. To do this we intend to strengthen the internal and external audit agencies, introduce a code of public service ethics and increase our efforts to eradicate corruption in government.
Finally, the regional autonomy agenda will focus on strengthening government and legislative institutions in the regions as well as further clarifying division of roles and responsibilities between the center and regions in the areas of budgetary expenditures, management of infrastructure assets, economic and social policy implementation, and administrative capacity of local governments. Priorities also include enhancing public participation in the political process such as introducing free elections of local official heads, enhancing capacity for mobilizing financial resources in the regions, and ensuring free internal trade between regions.
I would like to turn to our final agenda on improving the welfare of Indonesians. As I mentioned earlier, while the economic agenda is the key to welfare improvements, the social agenda matters as well. In the medium-term development strategy, there is a set of policies and programs in the social sector that focus on improving the access, equity, and the quality of basic social services including education, health and family planning and community services for the poor and the vulnerable. Other areas touched in the strategy include improving access of the poor to resources, regional and village development programs, youth policies, and activities directed at the empowerment and protection of vulnerable groups. We believe this approach is consistent with our commitment to achieving the Millennium Development Goals and the programs in the poverty reduction strategy.
An important focus will be to improve the rate of economic growth and its quality in the sense of creating more and better jobs, sustainable reduction in poverty and less vulnerability to poverty. Our growth rate has not created the number of qualified jobs we would expect from a 4-5% growth rate or significantly reduced Indonesian’s vulnerability to falling into poverty, or addressed other dimensions of poverty. In other words, we need quality growth that creates good jobs for the almost two million new job seekers each year, let alone the millions of workers crowded into the more insecure informal sector.
We believe that a combination between social sector program, an economic growth rate averaging 6-7% per annum over the medium term would support our employment and poverty reduction targets. The government has identified five key priority areas to achieve this growth and these priorities will be familiar to every one here today. The first is maintaining macro-economic stability through low inflation, fiscal sustainability and financial sector reforms. The second priority area is accelerating investment, exports, and tourism through reforms to create a healthy business climate and flexible markets. The third priority area is to improve human resources through our social sector programs to better prepare persons for the labor market and for greater participation in the economy.
The fourth priority area is infrastructure development. Due to our financial constraints, the key objective here is to improve the efficiency of existing infrastructure and utilities and open up sectors to greater private sector participation. These include rehabilitating rail transportation, increasing national road networks across the country, and investment in rural roads. In telecommunications, the government will proceed with regulatory reforms to encourage private investment. In water resources, the priority will be water resource conservation, improving efficiency of existing water resources and increasing access of the poor to quality drinking water. In the energy sector, the medium-term priorities will be to improve the regulatory environment to encourage investment in the energy sector with private sector involvement.
The fifth priority is to revitalize agriculture, regional and village development initiatives, as well as sustainable resource and environmental management in order to achieve more equitable and sustainable development. In this regard, we also develop social sector programs through, among others, improving access and quality of health and education services, in particular for the poor.
Our medium-term plan as laid out before is in line with the Vientiane Action Plan(VAP), which constitutes ASEAN’s work plan for the 2004-2010 period in realizing the three pillars of ASEAN, namely political and security cooperation, economic cooperation and socio-cultural cooperation. However, as for the detailedaction plan, we still need to work out further in our annual development plan. Experience has taught us that such a work plan will be less effective unless followed up by a detailed action plan that has a clearer schedule of implementation. We also share the awareness that for its effective implementation, it is necessary to have the active participation in cooperation among the planning agencies of ASEAN inintegrating regional plans into national plans.
In view of the importance of this cooperation, we had, in the Third SOM-DP in 1997, initiated steps for enhancing cooperation among planning institutions within ASEAN. The economic crisis, however, has made us be preoccupied with our internal problems, resulting in the somewhat tardy progress of implementing the cooperation plan. Nevertheless, the intention to increase cooperation in development planning has remained strong and relevant. This intention had been manifested among others in the Seventh ASEAN Summit, that at that time was conveyed by the Thai Prime Minister. Such intention has again been reaffirmedat the forum of theASEAN Economic Ministers (AEM) in July 2002. At this forum, the AEM had recommended ASEAN to convene a meeting among planning institutions, wherein the Secretariat General of ASEAN is entrusted with the task of facilitating the meeting.
On that basis, I think that it is time to revitalize the cooperation among development planning agencies. It is high time for us to revitalize the closer cooperation among the planning institutions, after having been suspended by the preoccupation to overcome the economic crisis. The same view to revitalize the cooperation was also forwarded in the meeting of the ASEAN Standing Committee in Jakarta in May 2005, that has basically agreed to reconvene the ASEAN SOM-DP.
In the context to revitalize the cooperation, I think there are, at least, two agendas that we have to pursue together. First, to facilitate the concrete form of cooperation among ASEAN countries by making the national development plan or strategies of the respective nations in conformity with the VAP. Therefore, I would like to suggest that the development plans of each of the countries be presented for identifying the opportunities for cooperation and modalities for implementing the work plan. Second, to formulate the form of institutional cooperation among the planning institutions, as a form of capacity building of the planning and strategic development institutions, and simultaneously to form and subsequently to establish a closer networking among the planning institutions.
I believe that the two agendas will be applied gradually in the years ahead. Nevertheless, I hope that the initial step will be taken in this meeting, by identifying the areas for cooperation and the modalities for their implementation. The constructive discussions that we will engage in will substantially facilitate such formulation. So as to become more effective, it is necessary that the discussion bypass the effort to start from the beginning. In the third SOM-DP,we have already agreed that the cooperation that we will establish is aimed at creating sustainable development in ASEAN, accelerate the convergence of ASEAN regional development, and enhance our social and economic integration. In that respect, the strategy that we have opted,comprises the capacity building of planning institutions, sharing of experience and information, conducting cooperation in research studies regarding various development issues encompassing the development sectors.These are the points that I believe we need to follow up in a more concrete manner. I also hope that in this meeting we can reach a common perception on the importance of establishing a stronger and increasingly synergic cooperation. I am convinced that such common perception is the key for ensuring our effective contribution, as planning institutions, to realizing the 2020 vision of ASEAN.
Finally, with the spirit of togetherness among all of us, I officially open this Fourth Senior Officials Meeting on Development Planning. Thank you.▀
Denpasar,Bali, 14 July 2005
Dr. Sri Mulyani Indrawati
Minister of State for National Development Planning/
Chairperson of National Development Planning Agency
1
Keynote Speech, delivered at the Fourth ASEAN Senior Official Meeting on Development Planning (SOM-DP), held in Bali on 14-15 July 2005.
Minister of State for National Development Planning/Chairperson of National Development Planning Agency.