Part 2 of 2: Indonesia can overcome trials

Susilo Bambang Yudhoyono, Jakarta

The Aceh peace deal, however, was not the biggest news of the year: it was the giant tsunami waves of Dec. 26 last year, a catastrophe that truly consumed national, and global, attention.

The tsunami is the worst natural disaster ever faced by Indonesia. It is certainly the most difficult ordeal that I have faced in my entire career in public office. I mean, how do you deal with the tragic loss of 200,000 fellow countrymen in a matter of minutes?

In retrospect, I think we in Indonesia responded to the crises well. We marshaled all our resources to save lives, rescue survivors, collect and bury the dead, provide shelter to the homeless, deliver food and medicine and re-establish government functions, all under very difficult circumstances. We also coordinated and supervised what would amount to be the largest international humanitarian operations in recent memory.

Today, Aceh is slowly but surely getting back on its feet. The challenge now is how to rebuild Aceh speedily with the available resources. We have produced an ambitious blueprint for the reconstruction of Aceh, and we have established an Agency for the Reconstruction of Aceh headed by the respected Kuntoro Mangkusubroto to implement this program and manage the funds and material resources that are coming in.

I see the Aceh reconstruction project as a window to the new Indonesia. It is a hallmark of transparency, professionalism and integrity.

There is one thought that I want to share with you in relation to the tsunami. The tsunami tragedy has generated a tremendous amount of global goodwill, involving not just governments and international agencies, but civil society, citizens from all layers and age groups. The whole Western world reached out to help tsunami victims around the Indian Ocean, especially in worst-hit Aceh, known as the most conservative Islamic society in Indonesia. The world has never seen the kind of global compassion and solidarity that we saw during the tsunami. This, I think, is something new in international affairs.

It is a shame to let such a good thing fizzle out by itself. I urge you, in your discussions today, to think about how we can nurture and capitalize on this global goodwill.

Another defining event this year were rising oil prices. As we all know, this is a global problem that affects every country.

There was a time in the past when we in Indonesia rejoiced every time the oil price increased. But today, due to greater consumption and growing imports, we sweat every time it happens, because it means we have to pay out more subsidies.

In March this year, I took the decision to reduce Government subsidies on some petroleum products, a move that sparked some protest but it was economically necessary. But the problem remains. Today, oil prices remain stubbornly at around US$65, much higher than the budget assumption of $40. If this trend continues, it will mean we will have to pay about Rp 145 trillion for subsidies, which constitutes more than one-fourth of our national budget.

That is a lot of money: Money that would be used to build schools, hospitals, roads and other things that can stimulate growth and productivity. What's more, the bulk of those subsidies are enjoyed by those who are economically capable of paying international market prices for their gasoline needs.

We all hope that oil prices will go down again sooner than later, although there is no certainty at the moment about this. The oil situation has hindered our capacity to achieve greater growth figures, and it is already a factor in the weakening of the rupiah against the U.S. dollar.

Thus, the question of rising oil prices, government subsidies, and the need to protect the energy needs of the poor (who are reliant on kerosene) will continue to be at the forefront of my Government's economic agenda. And you can be sure that such decisions will have political and social ramifications. The question is how we can minimize those ramifications.

The answer to this problem is a comprehensive energy policy for Indonesia. A fundamental solution to fundamental energy problem.

This means many things. It means that Indonesians will need to become more energy efficient, and currently my Government has launched a nation-wide campaign urging people to save energy. We will need to diversify our energy sources, away from oil, and make more use of gas, solar and other alternative sources, including bio-diesel. It also means we have to increase our oil production, and my aim is to raise it from 1.1 million barrels per day today to around 1.4 million barrel per day in the next four years.

I am hopeful that we can do this, with the Cepu and Jeruk fields, and with new oil refineries being built. Just yesterday, I took great pleasure in opening the Kilang Langit Biru (Blue Sky) Refinery Operation in West Java, with the capacity to process 50,000 barrels per day.

Another problem of global proportions that we face is terrorism.

Indonesia had a series of major attacks: The Bali bombs of 2002, the Marriot bomb of 2003, and the car bombing of the Australian Embassy in Jakarta in 2004. Indonesia therefore has been in the frontline in the global struggle against terrorism.

This year, we have been rather fortunate not to have experienced so far a major terrorist attack. But we know that the terrorist cells are still active. They are still hiding, recruiting, networking, trying to find new funding sources, and even planning. We are still actively looking for dangerous bombmakers, Malaysian Azahari and Noordin Muhammad Top. And we suffered from bombing attacks in Poso few months ago.

Fighting terrorism will continue to be our top priority in Indonesia. We will continue to pursue these terrorist groups wherever they may be hiding. We will continue our international cooperation involving the police, intelligence agencies and immigration. We will strengthen the hands of religious moderates.

And most importantly, I assure you that Indonesia will remain firm in maintaining a tolerant nation where freedom of religion is respected. You may read from time to time the voice of small radical groups, but these voices will not change the fact that mainstream Indonesia will continue to be moderate and tolerant and democratic. If you look at our election results last year, you can derive the same conclusion.

So these are, in a nutshell, an overview of some of Indonesia's key events and issues. It is hardly an exhaustive list, but if you want a comprehensive report, you should have been at my budget speech at Parliament a few days ago.

In any case, I hope from these short remarks you will get the sense of the enormity of the challenges faced by Indonesia, and also share my optimism that Indonesia can meet those challenges, in the same way Indonesia overcame past trials and tribulations.

Earlier in my remarks I referred to Indonesia as being the world's third largest democracy. While that is a great thing in itself, I think the real challenge is not about the status being a large democracy, but about the honor of being a successful democracy, a functioning democracy, and in Indonesia's case that means being a tolerant and stable and unified multi-ethnic democracy. And that also means building a democracy that actually gives our people real democracy.

Dr. Susilo Bambang Yudhoyono, President of the Republic of Indonesia, presented this speech at the Opening Session of the Sixth Asian European Editors' Forum at The Dharmawangsa, Jakarta on Aug. 29, 2005. The above is an excerpt from the speech.