New paradigm needed to build a civil society

Broadly speaking, our economic stabilization and reform program consists of four main points. First, we give a very high priority to the straightening up of our financial institutions. Second, we must solve the problems related to the private sector debts. Third, we must make our economy more efficient and competitive by eliminating monopoly practices which still exist as well as by developing an incentive system that will provide an impetus for efficiency and innovations. Fourth, we must promote openness and transparency in the governance and in the management of business in order that corruption, collusion and nepotism as well as other corrupt practices can be eliminated. Let us look at these points one by one.

No modern economy can operate without the support of a banking system which functions well and which is trusted by the society. We have noted that our banking system has developed very rapidly and has been able to render services to millions of borrowers and depositors. However, our experience has also noted that inadequate supervision has opened the opportunity for banks to provide high-risk credits and to commit other unhealthy practices.

When the wave of crisis pounded on this region, the weaknesses of our banking system began to be visible. We are all aware that the existence of a bank, wherever it is, relies on confidence. The withdrawal of funds on a large scale from banks will quickly undermine the financial conditions of the banks; this in turn has worsened the development of the rupiah exchange rate.

To restore the confidence of depositors, the government has given full guarantee over all claims of depositors and bank creditors. Meanwhile, in order to return savings to banks, interest rate is kept relatively high. This high interest rat, along with the guarantee over all savings, is expected to attract the community to save their money in national banks again.

We are aware that a high interest rate is a burden for the business world. However, this policy for the time being still has to be maintained. The purpose is in order that people continue to put their money in the bank so that people's expenditure does not become out of control. All of these will help our efforts to curb the inflation rate. As soon as inflation rate can be reduced, with money being reverted to banks, the interest rate will decline by itself.

Many banks have become unhealthy because of the crisis we are encountering; other banks cannot meet the basic requirements for a healthy bank; and others simply cannot be salvaged. These banks are placed under the Indonesian Bank Restructuring Agency. Up to now the Agency has taken over the management of fifty-five banks and the share ownership of a number of them have been taken over.

To assist the Agency in identifying the status of each bank, the Agency has made use of a number of accounting offices as well as international-caliber banking experts. With their assistance, the Agency has managed to get the real picture of the balance of each bank. These "pictures" form a foundation for developing the bank-restructuring program. Quite a few of the assets of the banks, namely the banks which still have values and assets, will be sold openly in order to obtain funds either for financing their operation or repaying their loans to the government. Banks that cannot be salvaged are required to discontinue their operation or else to merge with other banks.

Meanwhile, we also pay attention to healthy banks which are in a poor shape because of the crisis.

They are asked to recapitalize to restore confidence and to strengthen their operation. These actions are expected to be able to revive their access to trade financing facilities, to be able to do transactions in a normal manner with their overseas partners and to begin enhancing the financing of domestic businesses.

The overhauling of the banking system is so high in our agenda that we will not stop doing it until our banking system becomes strong and healthy and capable of operating with international standards.

For that purpose, we continue strengthening the capability of Bank Indonesia. As a central bank, Bank Indonesia has the main tasks of supervising financial institutions -- including enhancing the quality and performance of the banking system -- in addition to executing monetary policies for maintaining the stability of the currency rate. On these grounds, Bank Indonesia must be isolated from various forms of intervention, so that all of its policies are wholly directed for the process of improving the quality and stability of the value of the rupiah currency.

As I have mentioned on another occasion, we want to make Bank Indonesia an independent central bank to enable it to perform its main function as well as possible. This constitutes a very important part of the economic reform. The bill on the central bank is being drafted at the moment. The day-to-day execution of the supervision of banks and of monetary policies, including the control over the circulation money, the interest rate and the management of foreign exchange reserves, will be wholly in the hands of Bank Indonesia.

There will be a clear division of labor in our economic system. Bank Indonesia will be responsible for maintaining a strong value of the rupiah and a healthy financial system, the expected result being a quality banking system and low inflation and interest rates. On the other side of the coin, the community, the business world and the government will be responsible for the creation of the national economy which will be increasingly more competitive and productive.

The second element of our economic stabilization and reform program consists of actions for solving the problems of the debts of the private sector. The stability of the exchange rate for years has given rise to a false sense of security for people to borrow money or to provide loans. They believed that the exchange rate would not fluctuate so that many felt that it was not necessary for them to protect themselves from the risks of the change in the exchange rate. Meanwhile, because it was easy to get funds, the loans were not infrequently used to finance projects that were not reliable commercially and financially.

When the pressure of the market was so strong that the values of Asian currencies dropped, it became clear to us that the exchange rate system, which was relatively unstable, could not be maintained any longer. The foreign exchange rate reserves were not sufficient to maintain the rupiah exchange rate at a certain level. Finally we decided to let the market determine the exchange rate. This decision is logical and at that time there were no other better alternatives. In a more normal situation, an exchange rate will soon reach a new equilibrium and economic activities will adjust themselves to the new exchange rate. However, it was a pity that non-economic factors gave rise to the depreciation of the rupiah far beyond the normal level.

The flow of the financing of the business world became constrained or even stopped altogether. Our access to the international financial market was blocked. We were not able to get our access again until we drew up a clear framework for the settlement of these loans. The drawing up of the framework was a difficult job and touched on basic policy principles.

On the one hand, our view was that private loans should be settled by the private sector themselves, and that government money could not be used to repay the private sector debts. Here we are facing a very difficult dilemma. With the rupiah depreciating heavily, while the government could not stay idle and just waited for the debtors and creditors to solve their own problems. Each day passing means one more day our national productive capacity stayed idle and did not yield benefit for our people.

With regard to these problems, we have made some meaningful progress. On June 1 - 4, 1998, we managed to reach an agreement on the framework of the settlement of private debts in Frankfurt. We have paid all the arrears of the trade credits of our banks with overseas parties and our banks have struck an agreement on the solution of their loans.

Companies which are not able to fulfill their debt obligations are required to enter the process of bankruptcy through a special court. The role of the special court is very strategic in the context of the private sector debt settlement. As we know, the House of Representatives has agreed on the new bankruptcy law, which provides a foundation for the settlement of commercial disputes in a just, transparent and fast manner. This law will strengthen the confidence of investors who invest their money in Indonesia. This will also give benefit to our macro-economy, because it encourages the utilization of productive assets, which tend to be idle as the result of a protracted dispute.

Subsequently, we have also formulated the restructuring framework for the private debts with domestic banks. The measures include the improvement of the law and taxation with a view to supporting the restructuring process. With the framework of the private sector debt settlement with domestic and overseas banks, we expect the flow of business financing to be normal again, production activities will resurge again, and job opportunities, re-open.

Now I come to the main element, namely the third element of our economic stabilization and reform program, which involves the production sector and the real sector. Here we have to eliminate various elements and procedures, which gave rise to economic rents and excessive or unnatural profits to some economic activities. We have to abolish exclusive permits and business rights, which cause economic activities to be inefficient. Likewise, the procedure for giving business permits, bidding or the procurement of goods by the government and the state- owned enterprises must be carried out openly and competitively. As such, economic activities will prevail in a healthy manner and can develop in the increasingly global environment.

The inability to obtain excessive profits through unnatural business ventures will give rise to a healthier climate for making business decisions. Thus business activities will choose sectors that are truly competitive . This effort is in live with the improvement measured of the work and management system in governance.

Subsequently, we need to create a healthy, open and transparent competitive climate because it is only with such a climate that we can solidify our production sector.

Why is it necessary to have a healthy competition? Healthy competition gives rise to efficiency and nourishes innovations, which constitute a foundation for the continuation of economic life in this era of globalization. We often find that monopoly yields an expensive product with low quality; it gives profits to certain groups of people but does not benefit people at all.

Another reason why a healthy competitive climate is necessary is that companies which grow because special facilities of through corruption, collusion and nepotism will not be able to withstand economic turbulence. A competitive economy has high resilience against the wave caused by the high and low tide of the world economy. In the years to come, we can be sure that only companies which come into being and develop on the basis of healthy commercial and financial principles will be able to survive, not the business which rely on monopoly rights and special facilities.

Therefore, through the initiatives of the House we hope to be able to complete a healthy competition law within this year. This law will constitute a strong legal foundation for the creation of a competitive, open and transparent business climate. The efforts to eliminate monopoly and unhealthy practices have in fact been started through deregulation and de- bureaucratization measures which we have executed until now , namely by abolishing hidden subsidies and special treatments to certain individuals or business circles. We are aware that in the long term, a healthy competitive climate will constitute the best guarantee for our economy to survive and develop in the globalization atmosphere; by the same token, it will form a stable foundation for the process of long lasting development equities.

Emphasis on the rule of a competitive game does not mean that the government disregards its roles and responsibilities to the social groups and business groups which are weak and which need the government's assistance. We will continue to help small and medium enterprises as wells cooperatives in a manner which does not disrupt their opportunities to enhance their competitiveness and for them to compete healthily with other groups.

The fourth main element of our economic stabilization and reform program refers to measures for the improvements of the work system and the management system of public governance or corporate governance. In the short term, improvement measures in these fields are highly necessary to recover the confidence of domestic and foreign economic players. In the longer term, this effort will strength the institutional foundation of our economy, which in turn will enhance efficiency and productivity as well as our national economic competitiveness.

We must eradicate corruption because corruption is a disease which if not cured, will spread and damage institution and even undermine the foundation of the social order and the political system of a state. Law and political reforms which we are executing will underpin our effort to reach this target. We must develop government bureaucracy into an organization which refers to the execution of efficient governance and to the provision of services which really satisfy the need of the society, free from intervention and political influence. I am sure that in the new social atmosphere we will be able to create clean and transparent governance and business practices.

If we succeeded in the completing this economic reform agenda, this means that we have succeeded in laying down the foundation of a modern Indonesia, which is democratic, efficient and productive from the economic perspective. This is the institutional foundation on which a just and prosperous society which we desire will be achieved.

The foregoing are the main points of our economic stabilization and reform program. Those measures are basic in nature and require time to yield results. Meanwhile we are aware that daily living for the people is very difficult and we must solve this urgent problem. Therefore, through our state budget we try to lighten the burden of the people. In July we submitted a revision of the 1998- 1999 State Budget which was upon agreed by the People' Representatives in January.

The House of People's Representative gave their valuable views in assuring that this State Budget really reflects the priority of development quash we have to undertake tat the moment . The government paid a great deal of attention to the views and adjusted the whole amount of the budget and its allocation in line with the wishes s of the House of Representatives. For that, on behalf of the government I would like to express my appreciation and gratitude to the honorable leadership and members of the House. The revised 1998/1999 State Budget is every much imbued with the Governments's resoluteness to protect needy people from the impact of the economic crisis as well as to help them empower themselves in order to be become a significant development force. The budget item for the subsidy of people's basic commodities is allocated higher sop that people can afford them. Specifically the government will provide rice for poor people at a subsidized price.

In addition, through small and medium enterprises as well as cooperatives, people will be given opportunities to participate by becoming distributors or retailers of the goods needed by the people themselves. As such, people can also enjoy the profits from retail trade business endeavors being undertaken.

To enable them to participate actively in the trade and home industry, the maintenance of their health needs to be enhanced by providing a not insignificant support in the form of generic medicines subsidized through community health centers and clinics nationwide. With a high level of health and participation in the assured Family Planning program, they are expected to be able to participate in a conducive atmosphere and to help rebuild our rural economy.

The efforts to rehabilitate our national economy will be linked up with the efforts to prepare our human resources. This year, despite the fact that our economy is still far from being restored, we have decided not to sacrifice our children in pursuing and complementing their basic education. No less than 1.4 trillion rupiah has been allocated to help about 4 to 5 million children from the prasejahtera ('needy') families and from the sejahtera I ('poor') families who are unable to pursue basic education or to help drop- out- prone pupils to continue schooling and complete elementary school or lower secondary school, be it government or private.

No fewer than 60 percent of elementary schools and lower secondary schools will receive operational cost assistance from Rp. 2 million to Rp. 4 million. Under this scheme, for poor people, the SPP ("education development contribution") and other additional school fees will not be levied from the parents of the pupils.

We have extended our attention to the children from needy and poor families to include high school and college students. In the past, the government gave scholarships to students with high achievements only; at this time of crisis we make available no fewer than 500,000 scholarships-- or fifteen times as many as in the past-- for students who or whose families are poor, who find it difficult to pay the tuition fees.

For the purpose of improving the empowerment, the self reliance and purchasing power of families , concurrently as a means of developing human resources in particular for those who have lost their jobs or those who are poor, we are carrying out an extended labor- intensive program. This program encompasses various sectors and the emphasis is placed on the roles of local communities in the planning of the projects. At the same time this program aims at strengthening endeavors which we have undertaken in the poverty alleviation efforts. The roles of the Non Government Organizations, and of universities in providing facilitators and in monitoring the projects are enhanced, We hope this effort will improve the capability of poor people in meeting their basic needs.

We also have allocated funds -- be they from the community or from the government-- to generate the people's economy, particularly the small enterprises, cooperatives and people;s farms.

In order to strengthen the development of cooperatives , the procedure for the establishment of cooperatives has been made easier; the facilitating by students and by those who are not concerned about cooperative development has been enhanced; the provision credits for the development of small enterprises and cooperatives has been made bigger, and easier to obtain; and those who are capable of producing goods are helped to market their products. Funds will also be provided to enhance agricultural food production in the near future.

Our awareness to learn and to work will be developed whenever there is an opportunity so that efforts to enhance food production can be made extensive by mobilizing all parties, by making use of available land plots, and by using community- friendly technology.

Meanwhile, in order to meet the need for funds activities involving the daily life of the people at large, we have postponed the implementation of projects which can be put off; there is no new project, but operational and maintenance costs for infrastructures continue to be provided.

Owing to the big amount of funds which we need for urgent expenditures, the overall amount of the budget has risen. We are aware that in an emergency situation like this one, in which the private sector is very weak, the task of lightening the burden of society and reactivating the economy largely falls on the shoulders of the government. This is what is reflected in the new 1998/1999 state budget.

However, with such a big expenditure, we do not want the amount of money circulating to rise more than the goods and services available because, otherwise, inflation would worsen. On these grounds, although we have loosened our fiscal policy in order to meet people's urgent needs, the monetary policy must be steered very prudently.

The economic stabilization and reform program which I described earlier will be implemented in a consistent and serious manner. Our commitment to straighten up national economy should no longer be doubted. We shall firmly stick to that commitment in carrying out the actions and policies which we have forged into the blueprint.

In less than three months we have done our utmost to rectify all aspects of life which we deem unsuitable. We will continue improving the measures, the main aspects of which have been more or less agreed upon by us; they encompass the economy, politics and law. For that purpose, I would like to state once again that the government highly appreciates the contribution of ideas from all strata of the community, be they in the form of suggestions or criticisms. It would be better if the contribution of ideas is communicated in a manner full of wisdom, lest it should cause confusion or even dissension in the community. Once again, I would like to confirm the government's commitment to have dialogues as extensive as possible with a view to accommodating aspirations which develop in the community, through people's representatives or directly with the peoples.

It should also be understood by us together that under the objective condition we are in now, it is difficult to expect that we can solve all problems in a wink. The healing of wounds in our nation's body takes time. We are fully aware of the grave difficulties encountered by our people. The ordeal we are encountering is indeed very heavy. However, under such a condition we should not despair, let alone lose control over ourselves. We should be able to control ourselves and prevent dissension and turmoil from occurring, which would only rend the unity and tatter the life of the nation. Let us not despair and destroy ourselves. As a nation with faith, we should continue to endeavor, at the same time to pray to God to give us strength and blessings so that we can solve the problems facing us and that we become a stronger nation.

Permit me now just to convey an evaluation on the stage of the development of our life as a society, nation and country at present.

It is only natural that in this situation of reform we ask ourselves a question: can all of the policies, systems and performances in the pre-reform period no longer be used to answer the challenges of the reforms at present? Does reform mean that we have to build everything from scratch? I would like to invite all of us to ponder on these matters seriously. Somehow, by reforming we do not intend to form a new state.

One of the heritages from the past which we must maintain, which must even be perpetuated, is the spirit of nationalism of our highly diverse society. It was the spirit of nationalism professed by people from all walks of life and from various diverse groups that has enabled the proclamation of independence to be declared and the Unitary Republic of Indonesia to be maintained since 1945. Without the nationalistic spirit, there would have scores, or perhaps hundreds, of small states in this Nusantara archipelago, not impossibly hostile to one another.

It is the very spirit of nationalism that has given rise to our awareness that together we can build a much more prosperous future. Building up a nation does not at all mean eradicating the identity of race, ethnicity or group, all of which are part and parcel of our nation.

We must honestly admit that we are not always aware of the importance of the role of everyday facts in preserving the spirit of nationalism. various deviations, which have taken place --in particular in places a long way from the seat of government-- can gradually undermine the spirit of nationalism.

In this regard, various instances of rioting in the regions occurring since last May can be construed, directly or indirectly, as a challenge, even a threat, to our spirit of nationalism. Our spirit of nationalism undergoes a very difficult test whenever interracial, interethnic or intergroup clashes break up.

We should not consider the spirit of nationalism a finished product. In this present situation of reform, we even need to take measures so that on Oct. 28, the seventieth commemoration of the Youth Pledge, we reaffirm our nationalistic spirit. The objective is that everyone and every group member, whether native or naturalized, indigenous or non-indigenous, of minority or of majority group should feel that he or she is a legitimate citizen on a pain with anyone else within the body which is this big nation of ours.

The Preamble of the 1945 Constitution is the most authentic document containing the essence of our spirit of nationalism. In it we affirm our conviction of the right of a nation to be free and to build a free, united, just and prosperous state. It was with that conviction that we declared our independence.

In this document we firmly confirm our decision to form a state in which sovereignty is vested in the people, based on the belief in One Supreme God, just and civilized humanitarianism, Indonesian unity, democracy led by the wisdom of deliberation/representation, and social justice for the whole of the Indonesian people.

In this honorable forum, allow me to convey my view or vision regarding the future which we will enter, in particular in relation to the need reform endeavors by all forces of the nation at present.

To reform is the wish of all of us together. Therefore, we should maintain the spirit of reform well so that we will be able to reach the goals of the reform which we all desire. As I said, reform is an expression signifying a new era for the Indonesian nation, namely the Era of Democratic Resurgence. On these grounds, we consider May 21, 1998 as one of the historic milestones of the Indonesian nation.

In the context of reform we are doing our best to build a just open, democratic society based on the foundation of a civil society. Justice is Divine and it must be made absolutely real in our society. Thus, the founding fathers of our state have wisely decided that our goal in forming a state is to realize the intellectualization of the life of the nation and social justice for all of the people.

It was not without any purpose that the founding fathers of this republic formulated the phrase mencerdaskan kehidupan bangsa ('to intellectualize the life of the nation') as one of the goals of forming the Republic of Indonesia. One of the tasks of the state is to bring the nation to higher and higher level of civilization.

On the basis of our deep awareness of the value of justice, the reform which we are conducting very earnestly aims at putting in order our social political and economic system so that there will be no more imbalances in benefiting from national wealth and that more just and equitable distribution prevails. On these grounds, we will build up the national economy which is fully oriented to the interests and welfare of the people, and we will not allow the accumulation of wealth limited only to certain individuals and groups.

In the context of justice we will develop a pattern of social relationships which is harmonious and based on the spirit of the equality of the human kind. Discriminatory and unjust views on certain groups must be eradicated from the whole of our society, to be replaced with views imbued with the spirit of familial relationship, togetherness and brotherhood between and among fellow citizens.

Openness is the true value of humanity constituting the breath of the reform movement. On the basis of the basic view of openness, we must create a transparent and open political system controlled by the people. An effective social control is one of the ways in which the practices of corruption, collusion, cronyism and nepotism can be eradicated. An effective social control will open up a way in which an honest and clean government can be realized and high morality, upheld in our life in the society, nation and state.

With that line of thinking, I would like to invite all components of the nation to join together in developing and realizing the development of civil society which we wish to arrive at as one of the embodiments of the advanced and modern Indonesian facing the dynamism of the global life in the twenty- first century.

In order to build up the civil society, a general election, which is direct, general, free and confidential as well as honest and fair, which will bring about a legislative body fully reflecting the wish of the people, need to be prepared seriously. Only a legislative institution which really embodies the aspirations of the people can become a well-matched partner of the government.

In that regard, we have drawn up a political reform agenda by moving forward the date of the general elections to May 1999, the objective being to reform the House of People's Representatives and People's Consultative Assembly which will reflect the spirit of reform. With the formation of the People's Consultative Assembly. The General Session of the Assembly is expected to convene in December 1999 to sanction the Guidelines of the State Policy, choose the President and Vice President, and to decide on other decrees with a view to thoroughly completing the process of the nations's reforms in every aspect of life. For the preparation of the general elections, we will convene a special session of the People's Consultative Assembly in November 1998 with a view to deciding on the moving forward of the general election agenda item.

Through this honorable forum I would like to invite honorable Members of the House as well as all components of the nation to join together and make the political reforms a success. I would also like to invite all social political forces to prepare themselves as well as possible to participate in the general elections next year.

In heralding the future of our nation, whether we like it or not we have to continuously improve and prepare ourselves for the purpose of building up transparency without losing our identity as a nation. Let us shoulder together in all sincerity and seriousness the grand task of ushering our nation and state into the twenty-first century, the third millennium.

In that regard, I believe that there are at least eight actions that we need to take in order for us to restore our life as a society, nation and state in the years to come. The actions are as follows:

First, the enhancement of respect for and enforcement of basic human rights in balance with basic human obligations so that every Indonesian develops his or her potentials and creativity to the utmost.

Second, the enhancement of the quality of life and the spirit of democracy, the manifestation of an attitude responsive to the enhancement of political aspirations, as the institutional framework for all national activities.

Third, the enforcement and development of national laws as the main guidelines for our behaviors as members of the society, nation, and state, and thus give certainties to each and everyone.

Fourth, the enhancement of the quality and efficiency of national economy as the foundation for enhancing the nation's competitiveness in the international world. The development of the economy should bring about value-added which keep rising through the enhancement of the quality of science and technology content in an intensive and massive manner for the production of various goods and services.

Fifth, the development of job opportunities in a proactive manner through economic policies which will provide an impetus for the enhancement of domestic economy whose center of gravity lies in the development on an industrial structure which will become stronger and stronger and which will satisfy the needs of the people through domestic markets, and will be oriented to export and import substitutes which rely on natural resources, the emphasis being on a strong and independent agricultural industry.

Sixth, the enhancement of professionalism through directed educational policies, supported by the enhancement of the functions of educational institutions and professional organizations as sustainable endeavors to enhance the quality and capability of each and every citizen.

Seventh, the development and improvement of macroeconomic infrastructures, be they in the city or in the country, as institutions which will process and activate the potentials of our society and economy for the sustainable welfare of the community.

Eighth, the equitability of opportunities of doing business for all people and for all social groups without making a distinction in any form in term of ethnicity, religion or race.

The political crisis which emerged at the end of 1997 and reached it apex on May 21, 1998, a date marked with the formation of the Development Reform Cabinet, has made us more and more aware that there is the need for a basic review of and a change in the paradigm which then constituted the basis on which national development programs and policies were formulated. The stability paradigm, which was translated into a security approach and a top-down mechanism channel by means of a strong government and which had been adopted until recently, turned out to be old- fashioned and no longer suitable with the demand of the situation and with the progress of the society.

If we pay attention to the most outstanding events in various comers of the world towards the end of the twentieth century, we can perceive three phenomenal big events which usher nations into the 21st century. The three big events are: first, the national resurgence of nations in the world; secondly, awareness of basic human rights along with basic human obligations; and thirdly, the rapid progress of science and technology.

The progress made by telecommunication and information technology in the last two decades has made the world more open and provided an impetus for high interdependency between and among nations. Openness in almost all spheres of life, coupled with the high interdependency between and among nations, has become the main characteristics of the globalization in the twenty-first century.

The three events have given rise to fundamental changes in the social, economic and political life of many a nation in the world, the Indonesian nation not excepted. Social and political volatilities which occurred and reached their apex on May 21 last was evidence that the old paradigm, which emphasized stability by adopting a security approach, was no longer adequate to respond to the demands and aspirations of the people who have undergone fast-occurring changes.

A new paradigm with more emphasize on a democratic and well- being approach, needs to be developed. This new approach, the essence of which is transparency and bottom-up mechanism channel -- in matters relating to the working of a nation and state as well as to national development activities -- is the right answer to the demand of a society whose education and social awareness are higher and higher. Furthermore, the new paradigm is also in line with the characteristics of the civil society which we are developing.

In conformity with that, one thing which we need to undertake seriously in the years to come is the adjustment of the sociopolitical role of our Armed Forces as well as the status of the Police Force in the Indonesian Armed Forces organization.

Unlike the practices in most countries in the world, the Indonesian Armed Forces have up to now played a role not only in matters of defense and security but also in the sociopolitical domain. The Indonesian Armed Force's dual function arouse from the imperative of the history of the Indonesian nation and it has proved to provide a great deal of advantage in national stability and development.

However, in this era of reform, the Indonesian Armed Forces need to continue consolidating themselves and to conduct internal reform in line with the demand and the course of time. The increasingly professional role of the Indonesian Armed Forces needs to be enhanced on a continuous basis so that it can facilitate the realization of the ideals of our state bused on the rule of law and the development on democratic values in the future.

Since the integration of the Armed Forces in 1969, along with the then Indonesian War Forces -- comprising the National Indonesian Army, the National Indonesian Navy and the National Indonesian Air Forces -- the Indonesian Police Force has become part and parcel of the Indonesian Armed Forces. This integration has been sustained by a number of suitable basic and operational doctrines.

However, adjustments which are in line with the demands of time require more real capabilities and roles of the Police in enforcing the law and in the protection of human rights. In order to carry out these tasks within the current legal reform, it is imperative that the Indonesian Police augment and develop its professional capabilities, primarily as a law enforcement body.

Globalization, interdependency, and competition among nations require that the Indonesian nation continues to augment its proactive and creative foreign policy, in accordance with the free and active foreign policy doctrine. We must work hard together to restore and improve the image of our country in the eye of the international world, as well as to elicit international support particularly with a view to making our national economic wheel revolve again.

We have to continue maintaining our regional and international cooperation, especially in the framework of ASEAN, APEC, ASEAN Regional Forum, Asia-Europe Meeting. Non-aligned Movement, and the Islamic Conference Organization. By further upholding mutually beneficial relationships which have been well fostered and maintained with neighboring countries, we support one another in the common endeavors of achieving our respective national ideals.

We still have approximately sixteen months to prepare matters to be decided on by the General Session of the People's Consultative Assembly at the end of next year. Let us focus our attention to completing all matters required in the context of executing, genuinely and thoroughly, the agenda item of the nation whose objective is to restore and improve the life of our nation and state in this era of democratize resurgence.

To conclude this address, permit me once again to ask the honorable Leadership and Members of the House, as well as fellow citizens all over the country wherever they are, to re-solidify our spirit of unification and unity as well as to form a resolve and develop togetherness so that we can overcome the crisis befalling us. I also would like to ask all components and forces of the nation to safeguard the genuineness of the reform movement as well as to complete its execution in a comprehensive, directed, and constitutional manner, in accordance with the agendas which we have decided and which we will decide on together.

Finally, to Allah Subhanahu wa Ta'ala, God the Almighty, we say our prayers: may we be blessed with the strength in faith and firmness in facing this national ordeal. May God shower His blessings upon the Indonesian national so that we will emerge from this crisis soon, and to carry out reform as well as possible for the sake of improving the national welfare, our common ideals; amien yaa Rabbal 'alamienY.