JP/5/MEG3

JP/5/MEG3

To operate a modern economic system without the support of a
reliable national banking system is surely impossible. We must
learn much from our bitter experience in managing the banking
sector; especially after economic liberalization in 1983. We have
violated so many conservative norms in banking management, which
have been established over a long period. We really need to learn
from this experience, to prevent us from becoming like the old
man who lost his cane twice.

Like it or not, today we are part of a new world, which has
become global in the field of politics, economics, and social and
cultural issues. What happens in another country also influences
our nation and vice versa. In pursuing economic interests, we
have ventured into formal commitments with other countries, both
bilateral and multilateral.

In general these commitments are designed in the spirit of
mutual benefit. It has to be admitted that some of them have now
become quite burdensome. Therefore, the opinion that has emerged
among us to request adjustment to such burdensome commitments is
not entirely wrong. Notwithstanding the reasons and without any
less appreciation for the good intentions behind such thoughts, a
commitment is a commitment. An agreement is an agreement, whether
national or international.

We must do our utmost to honor the obligations contained in
these commitments. Nonetheless, we would certainly be deeply
grateful if friendly countries and related creditors could give
us some room and breathing space, to enable us to restore our
national life in this difficult transition period.

We are also facing a short-term challenge which we must
respond to with hard work, namely our participation in the ASEAN
Free Trade Agreement and the World Trade Organization. Indeed, I
believe it requires great strength to maintain our national
competitiveness in an increasingly open and competitive
international trade, when our economy is at its lowest bargaining
position.

Allow me now to touch upon the issues of recovery and efforts
to maintain the stability of our national security and defense.
There is not much that we can do without security, or if the
borders of our territory are trespassed in the absence of any the
capability on our part to prevent or counter such violations.

We need an effective, highly disciplined security system and
personnel under government control, yet who have the spirit of
the people.

Along with national reform aimed at creating a more democratic
Indonesian society, the Indonesian Military (TNI) has pledged its
commitment to continue its internal reform through concrete
measures, to become a professional and functional instrument of
state defense, and to uphold democracy and to abide by the law
and to respect human rights.

We have consistently also started to separate the National
Police from the TNI, although in certain cases the police need
military support. Yet the TNI must focus on defending national
territorial integrity, while the police must concentrate more on
creating and maintaining security and a feeling of safety among
the people.

Therefore along with the need to enhance the professional
capacity of the TNI and the National Police, it is the state's
duty to ensure the availability of equipment and minimum backup
for the task entrusted to them of maintaining security and
defense. It would be unfair if we gave the TNI a demanding task
but did not provide them with proper equipment and logistical
support in terms of the appropriate quantity and high quality.

There is therefore a compelling need for an agenda and clear
schedule to pursue on the national policy on TNI and the National
Police. There are many regulations to be amended, basic doctrines
and their implementation need to be revised and education and
training programs to be conducted.

I understand that there are issues inherited from the past
with regards to the repositioning of the TNI and the National
Police, specifically severe violations of human rights in armed
conflict areas. We learned of some of the violations from the
international media right after they took place, but some came to
the fore only recently.

It must be admitted that many such reports have cornered us.
Yet our stance remains clear. Should there be convincing evidence
of severe violations of human rights outside the battleground,
those found guilty should be held responsible and legal action
must be taken against them, according to the law. We will not
entertain any impression of covering up such severe abuses.
For it is clear that Indonesia is a state based on law. No single
person is beyond the reach of law, not even a president.

In preparing ourselves to embark upon a better future, allow
me to dwell on the three questions from the past that need a
comprehensive solution. They are the questions of East Timor,
Aceh and Irian Jaya.

Right from the outset, the issue of East Timor has had an
international dimension, especially in the framework of
decolonization. There was no specific design of the Republic of
Indonesia in that region.

Our involvement in the region was unintentional, for it was
the stance adopted by the state's founding fathers that the
territory of the Republic of Indonesia was the ex-territory of
the Dutch Indies. No more, no less.

Without delving again into the causes, we have now
fundamentally settled the question of East Timor in 1999 and have
openly respected the choice of our brothers and sisters in the
region to have their own state.

Yet some lingering issues remain, such as the solution to the
problem of a considerable number of refugees in the province of
East Nusa Tenggara and assistance for our East Timorese brethren
who feel more comfortable to remain in our territory or who have
become Indonesian citizens.

The issues of Aceh and Irian Jaya are quite different with
that of East Timor. These questions are strictly internal
matters, especially connected to nation- and state-building.

We have to honestly admit that the crux of the issues is the
various policies of the past, which have been considered very
oppressive to the people in those regions. It is therefore
natural that as a nation we offer a sincere apology to our fellow
citizens who have long suffered from those incorrect policies.

But apology is not enough. It must be accompanied by a series
of rearrangements to restore things in the shortest possible
time.

Therefore, we are now carrying out basic corrections in the
two provinces, not only by paying respect to the cultural
identities and specific characteristics of the people, but also
by granting the regional administrations more authority to manage
their respective regions in the framework of special autonomy.

Yet, one thing is clear; all these should remain within the
context of preserving the territorial integrity of the unitary
state of the Republic of Indonesia.

Allow me now to take this opportunity to underline the urgency
of maintaining the country's territorial integrity.

Territorial integrity is not only of highly important
attribute of a nation-state, but also serves as an integral part
of a stable world order, which has permanent boundaries. In this
context, any movement intending to secede from the unitary state
of the Republic of Indonesia would not only face our strong
rejection, but would fail to win support from the international
community as well.

This fact needs the close attention of the leaders of such
separatist movements, especially those who have opted for the
path of armed violence, which has led to so many victims among
innocent people. From this forum I call on my brothers and
sisters who, due to various reasons, have chosen armed violence,
to return to society and together build a new Indonesia, a better
one than what we have been through.

As I said earlier, now we have at our disposal the instruments
of special autonomy, which I believe provides enough room to
fulfill your valid aspirations and interests.

It was based on my comprehension of the above conditions that
I formed the Gotong Royong Cabinet to carry out the mandate you
have entrusted to me until the end of my tenure in 2004.

I apologize for being rather late in announcing the line up of
the new Cabinet. The reason was simply because it was not easy to
select the most suited among so many candidates who were all the
nation's best sons and daughters. It was only due to the limited
posts available that I could not accommodate all the candidates
to take up the posts of coordinating ministers, portfolio
ministers, or state ministers. Hopefully the next time round the
others will get their chance.

In a bid to respond to the above issues allow me to repeat the
six programs of the Gotong Royong Cabinet.

* Maintaining the nation's unity in the framework of the
Unitary State of the Republic of Indonesia;

* Continuing reform and democratization in all aspects of
national life through a clearer framework, direction and agenda,
while improving respect for human rights;

* Restoring the economy and strengthening the basis for
people's economy;

* Consistent upholding of the law and creating a feeling of
security and eradicating corruption, collusion and nepotism;

* Conducting a free and active foreign policy, restoring the
dignity of the state and nation and recovering the trust of
foreign countries, including international donor institutions and
investors, in the government; and

* Preparing a safe, orderly and direct general elections in
2004.

I am fully aware that this Cabinet will be unable to perform
without the understanding, cooperation and support from every
sector of society. From this forum, I again request that
understanding, cooperation and support. Only through this
approach will we be able to gradually come out of this deeply
painful crisis.