Sambutan Acara Forum Bisnis dengan Pengusaha Australia

SPEECH BY
DR. H. SUSILO BAMBANG YUDHOYONO
PRESIDENT OF THE REPUBLIC OF INDONESIA

AT A BUSINESS FORUM
HELD IN SYDNEY, AUSTRALIA

SHANGRI-LA HOTEL, SYDNEY
11 MARCH 2010



Excellencies,
Ladies and Gentlemen,
Dear Friends of Indonesia,
I wish to thank the Australia-Indonesia Business Council for organizing this event and inviting me to speak here today.

Back in April 2005, soon after I began my first term as President of Indonesia, I addressed this very same audience in this same beautiful city. I am glad to be here again.

Last night I met the Indonesian community here in Sydney and I could see very well that they are happy being here. Thank you for receiving them well and making them feel that they belong. Thank you for making them a part of your great city and I hope that they will contribute something to its prosperity and to the colourful fabric of its culture.

And yesterday I had the honour of addressing the Australian Parliament. This privilege is rarely given to a foreign leader. It was therefore a historic moment for me and I was humbled by the graciousness with which the representatives of the great Australian people received my message. It was a message of friendship and confidence in our partnership.

I met with the Leader of the Opposition, too. And I understood his position on issues. There is a great deal of the bipartisan spirit prevailing in Australia today. That is good for Australia. It is also good for Indonesia.

My meeting with Prime Minister Kevin Rudd was particularly fruitful. We agreed to intensify the Indonesia-Australia Leaders’ Dialogue: we are going to have an annual bilateral summit. We are going to enhance our people-to-people contacts. We will wage a fierce battle against people smuggling, to enhance our border management, and the attendant legal processes, including consular arrangements.

We decided to increase cooperation in research and tertiary education. We even agreed on regular sports exchanges and friendly games. Maybe we will learn the secret of Australia’s success in sports.

Above all, we agreed to enlarge and strengthen our business and economic linkages. And that is where you come in.

Governments make policies, and we certainly strive to make wise policies that encourage entrepreneurship and good corporate governance. And Governments facilitate. But without you who are in investment, business, trade and industry—there is nothing to facilitate.

At the end of the day, you are the ones who make Government policy work. You are the ones who create real wealth.

Let me therefore give you an idea of how the Government in Indonesia will help you create wealth. I refer to the policy directions that Indonesia has taken in order to achieve our national development goals. The first thing that you may want to know is that we faithfully adhere to our Five Year Economic Development Plan, which stands on three main pillars: social welfare, democracy and justice. In advancing these three pillars, we put emphasis on food security, energy security and infrastructure.

That Plan has been elaborated into policy-specific steps that guided the first 100 days of my second tenure as President. These include:
1. the establishment of a one-stop-shop to service investors;
the creation of a national single window for export and import procedures in all major ports;
2. the establishment of special economic zones;
3. creation of industrial clusters for better organized facilitation;
4. further value creation through down-streaming of certain sectors as to create jobs;
5. an initiative to finalize a reduced and clearer negative list, relating to such sectors as health care, agriculture, education,
logistics, creative industry and telecommunication;
6. an initiative to finalize spatial planning spearheaded by the Ministry of Forestry in coordination with other government
agencies, including regional governments;
7. an initiative to reform of the land acquisition and labour laws in preparation for infrastructures building;

At the same time we are enhancing transparency and certainty in public-private partnership projects, which involve mainly infrastructure building.

We are not only striving for economic growth. We want no less than exclusive growth—in which all people will benefit. Hence, we are scaling up our microfinancing scheme guaranteed by the Government. Our financing of medium and small loans will reach the equivalent of US$ 2 billion per year or US$ 10 billion during my second tenure as President.

We are carrying out better-targeted subsidies and building more effective social safety nets. We are bringing direct benefits to those normally marginalized—the poor and our farmers. This policy will have the effect of boosting our agricultural production.

Still in the spirit of equitable growth, Prime Minister Kevin Rudd and I have agreed that in our bilateral development cooperation, the emphasis will be on six provinces in the eastern part of Indonesia, with focus on food security, energy security and infrastructure building.

As to our bilateral trade, the trend is steady growth: from 2004 to 2008, it grew at an annual average of 17.95 percent, with a 21.87 growth in exports and 14.32 percent growth in imports. While we are pleased at the positive trend, this hardly reflects our full potential as trading partners. We in Indonesia are open-minded about possible new ways of enlarging and intensifying our bilateral trade.

With regard to our tourism relations, we only know that Indonesia is one of the top ten tourist destinations of Australia—in spite of your Government’s advice against your citizens traveling to Indonesia. On the other hand, Indonesian tourist arrivals in Australia are increasing: last year, over 100,000 Indonesian tourists visited Australia, the first time it happened since the Asian crisis of 1997.

Australia is Indonesia''s 12th largest investor, excluding oil and gas.  Last year, Australian investments in Indonesia reached US$79 million. Considering our proximity to each other, this is a statistic that we can improve. Japan, Korea, and Taiwan, as well as our ASEAN neighbors, play a more prominent role in the flows of foreign direct investments to Indonesia.  And they have been well rewarded for being so venturesome.

There are vast investment fields that are waiting for you with a promise of tremendous returns.

Let''s start with energy sources. We have Asia Pacific region''s largest proven natural gas reserves.  We have one of the world''s largest thermal coal resources. And we are addressing our immediate need for power generation: the first accelerated 10,000 megawatt projects are in progress and the next 10,000 will soon be launched. Some 40 to 50 percent of the power to be generated will be clean energy, such as geothermal energy.

Let''s move on to agribusiness. We are the world''s largest exporter of cocoa and palm oil. We are blessed with fertile volcanic soil suitable for intensive agriculture.

Australian agribusiness leaders and food manufacturers, take note: the Indonesian food processing industry alone has grown an average of 15 per cent per annum in recent years.

Then there is our population of 235 million people. Because of our immense domestic market and the certified fact that the Indonesian consumer is the most confident in the world, the Indonesian economy came out as Asia’s third best performer, after China and India, in the midst of the global crisis last year.

Some 50 per cent of our $550 billion economy is driven by consumption.  Our national retail sales are expected to top $74 billion US dollars by the year 2013. 

Financial houses around the world are betting on Indonesia. Morgan Stanley predicts that our economic growth may accelerate to seven per cent in 2011. The Fitch Rating Agency just upgraded the country''s credit rating to BB+, one notch under investment grade, with a positive outlook.

We are giving full attention to infrastructure building—especially our maritime infrastructures. The Government is investing heavily in this, but we are confident private investors will partner with us in completing this massive endeavour.

This will happen because we are earning the trust of investors. We are making our investment climate irresistible to them. Registration and licensing procedures have been revamped.  Regulations, particularly those on labor contracts and wages are being reviewed. We have cut red tape and reduced administrative costs at the tax and customs offices. We are rationalizing the overlapping regulations that have resulted from decentralization.

All these cannot be completed instantly. We may have a few democratic elections under our belt now, but we are still very much in the midst of reform. It takes time for reform to take roots.

Remarkably, instead of destabilizing, reform has brought about greater political stability. The Balkanization of Indonesia as predicted by doomsayers never took place. Since reformasi, we have never suffered a major political upheaval despite the challenges confronting us. We have a stable democracy that has succeeded in decentralization and in professionalizing its military.

Reform has also brought about economic dynamism. In 1998, just before reformasi, Indonesia was an economic and financial basket case, and that is an understatement.  We suffered a 14 percent negative growth and our inflation rate went through the roof.

Today, the Indonesian economy ranks fourth globally in terms of GDP growth. It runs on a regime of tight fiscal discipline.  We adopted an economic policy that is strongly pro-business, pro-job creation and pro-poor. And it works. Debt reduction has been considerable, with our government debt representing less than 30 per cent of our GDP -- the lowest among ASEAN countries, with the exception of Singapore. 

At a time when most governments and their private business sectors are in the throes of a financial hemorrhage, Indonesia has US$70 billion in foreign exchange reserves.  Our economy is not only in good health, it is also in a good position to help restore the health of the global financial system. This shows that we have achieved both fiscal sustainability and monetary stability. It is all the more reason Australia and Indonesia can work very well together.

I see no reason why in the years ahead that partnership will not grow even stronger as both our countries reap its rewards.

So I join you here this morning with a great sense of confidence and some specific hopes. I hope that you will welcome Indonesian businesses in the same friendly and caring way that you have welcomed young Indonesian students all over Australia. I hope the entrepreneurs of both countries find ways of complementing each other and strike up partnerships that benefit us all. I hope business forums such as this one will link up Australian and Indonesian innovators.

And in this gathering I trust you will talk business with one another and emerge from it brimming with ideas that lead to lucrative ventures.

You can see that we have a lot of work to do. You can also see that investment opportunities are all over this economic programme. I am inviting you to take active part in this massive and rewarding enterprise.

You will have as your partner a Government that has brought about steady growth in the middle of this decade and more recently a safe harbour from the global economic and financial crisis. A Government committed to and capable of good and wise governance.

I urge you to engage us in this great venture of nation-building. A venture that will lift the masses of Indonesia to a better life, and justly reward all those who participate in it. And I mean all of you who are our economic partners.

I thank you.