50 years: Progress at hand, clear targets ahead

50 years: Progress at hand, clear targets ahead

Following are excerpts from the provisional translation of
President Soeharto's State Address delivered at the plenary
session of the House of Representatives (DPR) on Aug. 16 on the
occasion of Indonesia's 50th Independence Day on Aug. 17.

JAKARTA: Let us look back to reflect for a moment on our
experience together since the Proclamation of Independence 50
years ago. And, at the same time, let us look ahead to the future
with a horizon that penetrates beyond the 21st century.

During the first 20 years after the Proclamation of
Independence, we passed through the War of Independence,
revolutions and armed rebellions.

In this 20-year period, we suffered setbacks in various
aspects of life, especially in the economic field. But the
experience gained over those 20 years has served also as a very
valuable asset for the continuation of our life as a nation. This
very valuable asset of experience has brought awareness of the
need for the unity and cohesion of the nation based on Pancasila.

As has been the case with other nations, we also have had to
pass through the period of a war for independence and revolution
before we could enter the era of development.

Indeed, we made total corrections of all of the mistakes
committed in the past when we embarked on our era of development.
But even with development, we did not cut our ties to history. We
see development as a continuation of the struggle we waged during
the periods of the War for Independence and revolution.

It is precisely through development that we want to realize
the noble ideals that have motivated our national struggle in the
past. This is the reason why we emphasize that development is the
practical application of Pancasila.

When we entered the era of development, we still felt the old
wounds inflicted by the controversies over the foundations of our
state. We are relieved that after a long national dialog, after
we have deeply reflected upon things, guided by our common will,
we finally reached a consensus that Pancasila is the sole basic
principle in our life as a society, a nation and a state.

Thus, we have closed together the door to any possible
recurrence of such very fundamental ideological issues in our
national life. The political structure at that time also showed
some weaknesses as a legacy of the past.

With full patience and common awareness, we finally succeeded
in simplifying our political structure by establishing three
socio-political forces. Simultaneously, we made use of the
presence of the Armed Forces of the Republic of Indonesia (ABRI),
with its dual-function, as stabilizer and dynamic force, with a
view to pushing through the development program which could no
longer be postponed.

We continued to promote a dynamic national stability by the
functioning of supreme and high state institutions, by
periodically holding a general election every five years. We also
continued to refresh a responsible democratic life and to
exercise human rights as mandated by our Constitution.

This is the reason we have enjoyed the longest period of
national stability and smooth development in our history since
the Proclamation of Independence.

The journey of our nation in the future will occur in the
midst of a world which changes rapidly, and which is sometimes
filled with uncertainties. Our independent and active foreign
policy, which was mandated by our predecessors from the early
years of independence, is dedicated to serving national
interests.

We are pleased that from the beginning our national interests
have been in line with the interests of a just and civilized
humanitarianism. The Preamble to our Constitution emphasizes that
the Indonesian nation should participate in the creation of a
world order based on independence, abiding peace and social
justice.

In the early years of independence, our diplomacy was carried
out hand-in-hand with the armed struggle that finally brought
about the international recognition of the independence we
proclaimed.

The long journey of our foreign policy has been marked by,
among others, the Asia-Africa Conference as the embryo of the
inception of the Non-Aligned Movement, by the struggle to return
Irian Jaya into the fold of the Republic of Indonesia, by the
establishment of ASEAN, by the struggle for the Archipelago
Principle and the recognition of the principle of an island state
in the UN Law of the Sea Convention, by the peaceful, impartial
and comprehensive solution of the Cambodian issue, by the
selection of Indonesia as the host of the APEC leaders last year
and its election as a non-permanent member of the UN Security
Council this year. Through various fora, especially in its
capacity as Chairman of the Non-Aligned Movement, Indonesia has
reactivated South-South and North-South cooperation.

After a quarter of a century of the implementation of
development, we have achieved a relatively high economic growth,
accompanied by an equitable distribution of development programs
and the results of the gains thus achieved, which are greater and
more expansive than ever before.

In the early decade of Indonesia as a nation, our knowledge
about statistics on various conditions was very limited. In fact,
that was so even when we started our development programs 25
years ago. It has been only during these last 25 years that we
have developed a reliable and modern information and statistics
system. And this was carried out in stages and with constant
improvement. Now we know, from the various existing data, just
how far have we come along on our development journey.

Between the years 1960 and 1965, the per capita income of our
people declined to an average of under 0.1 percent. During the
same period, the national economy grew by only an average of 2
percent, while the average population growth rate was 2.1 percent
annually. After the stabilization and rehabilitation efforts
carried out by the New Order Government between 1966 and 1968,
the economic growth reached an average of 6 percent. During the
First 25-Year Long-Term Development program, our economic growth
rate averaged 7 percent a year.

In 1969, precisely at the start of Repelita I (First Five-Year
Development Plan), the per-capita income was US$70. At that time,
Indonesia was classified as one of the poorest countries in the
world. Twenty-five years later, our per capita income has gone up
to almost $920.

Today, Indonesia is regarded as a middle-income country,
although still in the middle-low category. For a country with as
large a population as Indonesia's, the result of our hard work
was not a small feat. The world community regards Indonesia's
development as one of the most successful.

Such a high growth was also followed by an increasingly solid
economic stability. The average inflation rate between 1961 and
1965 reached over 250 percent. The peak came in 1966, when it
reached around 650 percent. Entering the decades of the 1980s and
1990s, the inflation rate was maintained at an average of under
10 percent.

We have succeeded in raising the per capita income as a result
of, among other things, our success in containing the population
growth. Since we launched the National Family Planning movement
nationwide, the population growth has continued to decline every
year. With the end of the first long-term program in 1994, we had
brought it down to under 1.7 percent.

Furthermore, the policies of population distribution --
through, among other things, transmigration -- and rapid
development in areas outside Java has reduced the population
growth in Java. Whereas in 1961, Java and Madura were inhabited
by 65 percent of Indonesia's population, in 1990 this figure had
dropped to 60 percent.

The economic growth has led to the creation of an enormous
employment opportunity. Between 1971 and 1994, 44.4 million new
jobs were created. The number of these newly-created jobs far
surpassed the size of the populations of many countries in the
world.

The nation's agricultural development has improved the
standard of living of farmers, while at the same time, providing
a sufficient supply of the basic needs of the Indonesian people.
In 1984, Indonesia became self-sufficient in rice. This means we
managed to reach one of the primary development objectives of the
first long-term program.

Subsequently, we have maintained that self-sufficiency in a
flexible manner. It means that, apart from developing other
foodstuff resources we, from time to time, are able to import and
export rice. Our guideline is that, on the one hand, we pay
attention to the interest of consumers by providing an adequate
supply at a controlled price and, on the other hand, we also
enhance the people's increasingly improving and evenly
distributed well being.

This is the reason why the number of poor people has declined
dramatically. In 1970, out of 100 Indonesians, 60 were poor. In
1993, this number dropped to 14 persons who were still considered
as poor out of 100 Indonesians. Because of our large population,
the number of our less-fortunate brothers and sisters is also
big, close to 26 million.

The economic growth we have attained is supported by a rapid
increase in all production sectors, especially the manufacturing
industry sector. During the first long-term program, the overall
production of the manufacturing industry sector rose by an
average of almost 12 percent annually.

With such a development pattern -- entering its 50th year of
independence -- Indonesia's economic structure has become
increasingly strong and balanced. Whereas at the start of
development the share of the manufacturing industry sector in our
economy was less that one-tenth, and the agricultural sector more
than half, at the start of 1990, the contribution of the
manufacturing industry sector to the national product was bigger
than that of the agricultural sector.

The dependence of Indonesia's economy on oil and gas has also
declined substantially. Whereas at the beginning of 1980, the
contribution of the oil/gas sector to the national production was
around one-quarter, it now contributes only one-tenth.

With the decline of our dependence on oil and gas, the
structure of foreign exchange earnings has become more balanced.
The levels of our non-oil/gas exports are rising very rapidly.
Whereas in 1968, the non-oil/gas export earnings reached just
about half a billion US dollars, at the start of Repelita VI
these earnings reached almost US$32 billion. With such a growth,
the non-oil/gas commodities are playing an increasingly greater
role in our national export. Whereas, up to the end of Repelita
III, this sector accounted for only a quarter of our national
export, today it accounts for more than three-quarters. The types
of goods we are exporting have become more diversified and have
gained a wider market.

Meanwhile, the structure of our domestic revenues has also
undergone a fundamental change. The domestic non-oil/gas revenues
have risen considerably to surpass the domestic oil/gas revenues.
Entering the decade of the 1980s, domestic revenues from non-
oil/gas sources represented less than 30 percent of the total
domestic revenues. In the first year of Repelita VI, this reached
up to almost 80 percent.

The increase of the non-oil/gas exports in our national export
sector and the domestic non-oil/gas revenues in the state
earnings have reinforced the structures of the balance of
payments and the state budget. This also demonstrates the
increasingly great role played by the public and business world
in development activities.

Although investment by the state continues to increase, the
investment by the public and business world has risen much
faster. In the initial year of Repelita VI, the role of state
investment is only one-fourth of the total investment, whereas in
the past, until Repelita II, state investment still represented
more than half of the total.

The solid national economic structure is also reflected by the
increase and expansion of the network of basic infrastructure
services, such as roads, harbors, electricity, telecommunications
and so forth. The road and electricity networks have even reached
remote villages. All of this indicates very significant progress
because the availability of adequate basic infrastructure is one
of the fundamental bases for a modern and dynamic economy.

This economic progress has ushered even further the
improvement of the people's living standards and prosperity.
At the beginning of our independence, the average life-expectancy
was estimated at around 42 years. Twenty-five years later, it had
risen to 46 years. At present, it is 63 years.

The health standard of our people has also improved. This is
due not only to economic progress, but is the result of more
intensive public health services that have reached people in the
most isolated areas. This is also due to a healthier way of life,
housing and resettlement environments, as well as improved
nutrition in the diet.

In the early decades of our independence, the average per-
capita/day energy intake was estimated at 1,880 kilocalories. At
the start of the first long-term program stood at 2,035
kilocalories, and went up again in 1994 to 2,933 kilocalories
per-capita/day. The protein intake of the people during the first
25 years after independence rose from only 42 to 43 grams.
Twenty-five years later the protein intake stood at 67.1 grams
per-capita/day.

This improved nutrition is clearly manifested by Indonesia's
present day children. Whereas the people, who were born before or
around the time of the revolution for independence, are
relatively small and short, the bodies of their children and
grandchildren are stronger and fuller. And generally speaking,
our nation's newer generation is taller than their fathers and
mothers.

Various research studies have reinforced what we see every
day. The weight of our under-five-year-olds recorded between 1978
and 1992 showed an average rise of 0.5 kilogram. And the height
had expanded by 2.3 centimeters. The measurement of the height
of the thousands of children who were entering elementary schools
in various regions in 1994 showed that the average height of boys
was 114.9 centimeters and girls 114 centimeters. Compared to the
figures for 1964, the height of boys just entering elementary
schools in 1994 was up by 1.4 centimeters and girls by 1.2
centimeters.

The improved nutrition and health standards can be attributed
not only to sufficient food supply, but also to the people's
higher income and better educational standards.

The Six Year Compulsory Education Program launched in 1984
reached its target before the end of the First 25-Year Long-Term
Development Program. This was supported by the expansion of the
elementary school infrastructure through the Elementary School
Presidential Instruction (Inpres) Program.

When we had just become independent, the number of illiterate
people between 16 and 25 years old in Java alone was estimated to
reach about 70 percent of the total population of that time. At
the beginning of the first long-term program, the number of
persons over 10 years old who were illiterate had declined to 39
percent. Through an intensive effort, we were able to lower
further the illiteracy rate to almost 16 percent in 1990. As a
whole, all levels of education, as well as the quality of that
education, have improved significantly.

The progress resulting from development has been enjoyed more
equitability, especially by women. There has been a marked
increase in the role of women in education, health and labor.

In the education sector, the illiteracy rate of the female
population over 10 years old has declined rapidly, from 50
percent in 1971 to 21 percent in 1990. This decline was faster
than the rate for the male population, which was recorded as
dropping from 28 percent to 10.5 percent. The number of female
school children -- especially in elementary schools -- was almost
equal to the number of males. At the higher educational level the
number of female students has continued to rise. In the field of
health, progress is shown by a higher life-expectancy rate for
women from 48.5 years at the beginning of the first long-term
program to 64.5 years at the start of the second long-term
program.

The role played by women in the labor sector is shown by the
level of the participation of the female labor force that
continued to rise from about 33 percent in 1980 to around 39
percent in 1990. In fact, the growth rate of the female labor
force in the 1980-1990 decade was 4.5 percent, faster than the 3
percent recorded for the male labor force.

The rural community now has a greater ability to develop their
own regions. This heightened ability is sustained by the growth
of social organizations in the fields of culture, education and
religion, non-governmental institutions, local custom
institutions, small-holders credit institutions and banks, as
well as the cooperatives. Based on the experience gained during
the implementation of the first five five-year development
programs, the quality of development and its management on the
Level I, regional, and Level II, villages, levels has steadily
improved. Thus, regional autonomy has expanded in a more
concrete, effective and dynamic manner.

The waves of global economic upheavals have seemingly hit us
repeatedly. The prices of oil and various primary commodities
have dropped drastically from time to time. And our export sector
has depended on both. A series of one recession after another and
various global monetary upheavals have adversely affected our
growing economy.

Disasters and hindrances do indeed bring about difficulties.
But they also bring blessings in terms of experience. Therefore,
we always try to find a way to avoid repeating the same
sufferings.

The drop in oil prices spurred us to intensify the development
of our non-oil/gas sectors. The world recession and the fall of
primary commodities' prices have prompted us to build highly-
competitive industries, aimed at penetrating and holding on in
the international market. We are entering the increasingly open
and free world economy with the conviction that we will be able
to seize the present and future opportunities that emerge with
the globalization of world trade.

Presently, we are in the initial stages of the Second 25-Year
Long-Term Development Program, which we started with Repelita VI.

We have already set out clear targets for the next five years,
in fact, even for the next 25 years. We have to make our utmost
effort to make sure that during the next 25 years we will
quadruple the real per capita income of the Indonesian people.
This is a greater increase than the results of our work during
the past 25 years, which was three-fold.

Our progress so far has the world acknowledging it as an
extraordinary achievement for a country with such a big
population.

We are trying to make sure we abolish absolute poverty long
before the end of the second long-term program. By the end of the
second program, all Indonesian children should have access to at
least nine years of education, eight out of 10 to high school
educations and one out of four should be pursuing higher
education. Health services and improved nutrition should extend
the life expectancy to around 71 years.

The economic growth and increasingly qualified human resources
will make Indonesia, by the end of the second program, an
advanced industrialized and strong trading nation.

We made an early start towards this direction in the first
long term program, especially during the last two five year plan
periods. And we have launched a series of economic reforms since
Repelita IV, through strict deregulation and debureucratization
policies. As a result, accompanied by prudent macro-economic
management, our economy has progressed rapidly, particularly
during Repelita V.

Our economic growth has been even faster than expected when
Repelita VI was drafted. We discovered this when we were doing a
reassessment of the figures for our national income.

The rapid changes in the economic activities of the people
have required a reassessment of the indicators used in measuring
the economic growth. In such measurement, the base year of the
national income has been changed from 1983 to 1993, which was the
last year of the first long-term program. The scope of the
national income measurement also has been expanded to cover
economic activities which were not previously recorded. The
methodology of measurement is also improved. With this up-dating,
the increase in the national income has become more evident. The
base year used to make the measurement before 1983 was 1973,
Indeed, at least every 10 years we have to make adjustments.

During Repelita V, according to the calculation based on
constant 1993 prices, our economy grew by an average of 8.3
percent a year. This figure is far higher than the calculation
based on constant 1983 prices, namely 6.9 percent. During 1994,
our economic growth was 7.3 percent.

The industrialization process has also proceeded more rapidly
than we expected. In 1994 -- the first year of the first long-
term program -- the manufacturing industry sector represented
23.9 percent, whereas the agricultural sector had shrunk to 17.4
percent. This change shows that improvement of our economic
structure is taking place faster than we anticipated previously.
According to the projections, the manufacturing sector was not to
reach a level of 24.1 percent until the end of Repelita VI, with
the role of the agricultural sector declining to 17.6 percent.

These changes certainly do not alter what we have to face
every day. However, they undoubtedly show that our economic
structure is becoming even better. This has compelled us to
review the various targets of development set for Repelita VI.
For instance, Indonesia's per capita income by the end of
Repelita VI is targeted at US$1,020. We have to review this.
Because, in 1994 our per capita income had already reached
US$919. In the next one or two years, the target set for the
whole of Repelita VI, will most probably be surpassed.

With an economic growth in Repelita V that reached an average
of 8.3 percent and 7.3 percent alone in 1994, the target of
growth set for Repelita VI, which is 6.2 percent, seems to be too
low. Such a low target may make us complacent and probably will
not stimulate us to work harder, nor encourage us to work more
efficiently and productively. We do not intend to slacken our
effort. On the contrary, such an improved situation should prompt
us to make even more rapid progress in the future.

This review must be done, however, without changing Repelita
VI itself, because basically speaking the policies and programs
set out for Repelita VI are already well formulated. Also they
have been the subject of wide-ranging discussion, and, in fact,
the contents have been approved by the House of Representatives.
Yet, there is still enough leeway to allow for the slight raising
of the targets we want to reach in Repelita VI. Perhaps this
could be said to constitute adding additional targets.

Now, with hard work and serious efforts, we hope that the
economic growth will reach an average of 7.1 percent annually in
Repelita VI. With such a growth, the nominal per capita income by
the end of Repelita VI may reach around US$1,280. By that time,
God willing, we will have become one of the newly industrializing
countries.

Obviously, a greater amount of investment is required than
previously anticipated. To attain such growth, investment of Rp
815 trillion will be needed during Repelita VI, compared to Rp 66
trillion in the previous plan. The role of the public --
including both the domestic and foreign private sectors -- will
hopefully remain at around 77 percent. It is not impossible to
reach such a huge investment level. That for Repelita V was much
higher than our earlier expectation. Moreover, the investment in
the first year of Repelita VI was higher than predicted.

The growth rate of 7.1 percent is lower than the average
growth during Repelita V. However, this is quite a high target
and we may not reach it easily. Because, at the same time, we
must curb the inflation rate and maintain a constantly sound and
safe balance of payments. With the same high level of spirit we
demonstrated during the first long term program, we will do our
utmost to reach the goals thus set out.

In such a rapidly growing economy, the industrial sector must
continue to contribute, but with a greater share -- of up to more
than 25 percent -- of the national income by the end of Repelita
VI.

The industrial sector will be the mover of our economic wheels
in the future. For this reason, I would like to elaborate more
about this industrial development.

Industrialization is a process of change from an agrarian to
an industrial society. The industrial sector will continue to
play an important role, both in national production and in
absorbing jobs. The industrial sector has the power to create
higher added value by using resources more economically. In
addition, at the same time, it will be expected to provide a
strong impetus to the growth of other sectors.

The higher income of the people of Indonesia, which has such a
big population, can be expected to create extraordinarily great
demand for industrial products. Our national income by the end of
Repelita VI will be expected to reach around US$ 260 billion.
Such an economy has a great incentive as a market for industrial
products.

This is the reason, therefore, we have to secure that this
market does not slip from our hands. We should use our market as
a stimulus for further industrialization processes.

This is to be achieved not by limiting imports through
regulations. But, by encouraging the zeal and awareness of the
people to give priority to our domestic products. Thus, we are
not opposing the trend towards an open world economy, which we
really cannot avoid. On the contrary, we must make use of it.
Because we have taken the initiative for such an open economy,
whether through the WTO, APEC and AFTA.

However, the world market and the opportunities open in the
world economy are much larger than those in our own domestic
market. To date, and also for the future, exports will have to be
the movers of our industrial growth. In order to increase
exports, we must have a competitive edge, we must work
efficiently, with high productivity. There is no other
alternative.

First, the must be strategic industries to meet the domestic
demands. For example, transportation means industrial related
activities on the land, the sea and in the air. The vast
territory of our country as an archipelago and its geographical
characteristics certainly require extensive transportation means.
Also agricultural sector supporting industries, such as
fertilizer plants and agricultural implements, and industries
that meet the demands of the majority of the people and of the
economy in general, such as industries for foodstuffs, cement,
fertilizer, paper, basic materials for clothing, and so on.

Second, the export industry, an industry which has a good
export market, or has the potential to grow further, is required.
Fortunately we have an advantage, or, at the very least, the
potential for such an advantage, which can still be enhanced. We
have to maintain the export industry that has been developed so
far and make sure it has a competitive edge by raising the value
added of our products. We also must continue to expand and deepen
our export commodities and expand their marketing potentials.

Third, industry that uses our national resources, namely
natural resources such as exist in our agricultural sector, and
in the broader terms of mining, as well as human resources, must
be encouraged. We have to process and use our abundant natural
and human resources, so as to produce the highest possible value
added. Natural resources must be used sparingly and we must
ensure the preservation of the environment. Industry that employs
a great number of Indonesian workers must be encouraged, while at
the same time, their skills must be upgraded, in order to raise
productivity and improve the workers' well-being.

Fourth, industry that has a strategic value in technological
development and mastery that will have an impact on the
development of other industries is imperative. Industries such as
engineering, machinery and components are important and must be
seriously developed. Also industry that uses biotechnology in
various fields. In the framework of developing high-tech
industry, we already have the means, namely strategic industries
which cover land, sea and air transportation, meaning steel,
electronics and other industries.

Our strategic industries have progressed rapidly. We are
encouraged, we have greater self-confidence and we feel proud. In
less than two decades, we are able to make different types of
aircraft, ships and rolling-stock. And these are all the result
of the work of Indonesian men and women.

Fifth, industry that stimulates economic activities in the
regions outside Java, especially in the eastern part of
Indonesia. Because of the limited infrastructure, these regions
have less incentive compared to other areas, which are more
advanced in the provision of human resources and infrastructure
network. Therefore, the development of industry in the least
developed areas and especially in the eastern part of Indonesia,
must get greater attention and special treatment.

It is impossible to carry out industrial development with one
industrial sector alone. All sectors must have the support of all
of our other activities: sectors that produce raw materials and
infrastructure, trade, services, institutions and funding,
education and training, as well as scientific and technological
development.

Industrialization is a cultural process. Therefore, we must
build a society, which has the characteristics of an industrial
society. Our people must become increasingly hard-working,
thrifty, thorough, responsible, disciplined, time conscious and
must be instilled with the determination to produce the best.

Presently, the world is moving towards an era of a fully
global free trade. This means that, in due time, goods, services,
capital, technology, information and manpower will be able to
move freely from one country or one part of the world to another.

At that time, we must have a truly efficient industry with a
technological basis that we have truly mastered. Thus, economic
growth and expansion of employment opportunities will really
depend on industry and an increasingly equitable and expanded
income for the people.

Our industrial structure must be strong and balanced between
the upstream and downstream sector, between one sector and
another, between one region and another, between big, medium and
small industries and between the industrial and other sectors.
The mainstay of raw materials for our industry is the natural
resources that we manage in a sustainable manner.

Our manpower situation is dependent on the availability of a
work force that has strong determination and a high level of
productivity. We have to continue to preserve the quality of the
environment, so as to enable our nation to continue its
development at all times. This should be possible with
technological mastery becoming an asset of the national
industrial strength in the exploitation of all of the potentials
at our disposal.

At the time when we are commemorating half a century of our
National Independence, at a time when we are at the initial
stages of take-off today, our nation's sons and daughters have
started to master sophisticated technology.

This technological mastery is the result of hard work and the
diligence of thousands of young Indonesian men and women. We
feel the technological mastery of Indonesia's younger generation
is a blessing bestowed upon us by the Most Compassionate God. We
express our humble gratitude for His blessings.

Six days ago, the Indonesian nation witnessed the first flight
of the N-250 aircraft Gatotkaca. This aircraft was designed and
built by Indonesian men and women. It is full of instruments with
the latest technology. We will continue to develop the aircraft
which at present is capable of carrying 50 passengers so that
later on it can carry 70 passengers. Today, our young experts are
studying and designing the construction of a jet aircraft that
can carry 130 passengers. Apart from meeting our own domestic
demands, various types of this aircraft will hopefully be
exported to meet international market demands.

During the war for independence and revolution, our young
people were the pioneers who regained, upheld and defended our
Republic of proclamation. They are the 1945 Generation, the
Liberation Generation.

Today, 50 years later, in the era of material and spiritual
development, at the time when our nation is just embarking on the
stage of take-off in development, Indonesia's young people have
become the pioneers in obtaining and mastering sophisticated
technology. They are the Succeeding Generation. In a time of
peace and development, the members of our younger generation have
become pioneers and heroes. The present generation, the
Succeeding Generation, are the pioneers, fighters and heroes of
development!

We, the Liberation Generation, the 1945 Generation, that took
part in the birth and defense of the Republic of proclamation,
who witnessed our fellow freedom fighters lose their lives as
sacrifices in the struggle toward independence, are now enjoying
a very serene piece of mind. We are convinced that the future of
our nation lies in the hands of the capable and responsible
Succeeding Generation.

Regardless of the development we are implementing, its
ultimate goal is social justice for the whole of the Indonesian
people, the maximum prosperity of all of the people.

Therefore, we have to be cautious that the economic
development process which relies on large-scale development of
industries will not create a wider gap. Conversely, it must
provide the people with greater opportunities to participate in
development. Only with people-based development will we succeed
in improving the well-being of the whole populace.

Therefore, in our industrial development it is indispensable
that we develop small-scale and medium-sized businesses. They
have a very strategic nature because they involve the
participation of the public at large. Thus, we are applying
democratic principles in development. Furthermore, small and
medium sized industries absorb a great number of workers. Because
of their small scale, these industries are more flexible and find
it easier to adjust to changes. With strong small-scale and
medium-sized industries, the industrial structure will become
even stronger too.

So far, we have developed such small and medium-scale
businesses. We must continue and intensify the effort to give
them guidance, as we have done to date, through, among other
things, education and vocational training, management and
entrepreneurship, as well as the mastery of appropriate
technology, financial assistance like credit lines and venture
capital, as well as marketing. Equally important is the promotion
of the partnership of these small and medium-sized industries
with big businesses, based on a pattern of mutual help and mutual
benefit.

We also must continue to generate the cooperatives. Indeed, we
have made encouraging process in the development of cooperatives,
but what we have achieved is still far from the mandate of the
1945 Constitution. Therefore, in the future, we should pay
greater attention to the reinforcement of cooperatives, so they
will become a truly effective economic forum for the people.