President Soeharto unveils 1997-1998 draft budget

President Soeharto unveiled the draft of the annual state budget yesterday before a plenary session of the House of Representatives (DPR). The following is an unofficial, condensed translation of the budget transcript.

JAKARTA: The Southeast Asian region remains a region with high growth rate. Our own economy is moving with great dynamism. If fellow regional countries are able to arrange a good cooperation in regional, sub-regional or bilateral terms a synergy will emerge that will multiply the advantages of this region.

At home, 1997-1998 is a "political year". We will all be busily involved in various major activities, which are fundamental in nature for our national and constitutional lives. The mechanism of national leadership will reach its culmination in 1997-1998, with the General Assembly of People's Consultative Assembly (MPR) that will determine the 1998 Guidelines of State Policy and appoint the President/Mandatory of MPR who shall carry out these Guidelines. The General Assembly of the MPR will be preceded by a general election, which is a festivity of democracy for us. Normally as a festivity, the general election must bring happiness to all of us.

General election brings happiness because the people shall exercise their democratic right and determine their future by electing representatives who will carry their hopes. General election will bring happiness because we have completed one stage of development and we shall enter the subsequent development stage that promises better prosperity and well-being to the whole society.

Therefore, we have to prevent general election from becoming the contrary, namely creating anxiety and sufferings to the people. Our nation has become more mature, including in the implementation of democracy. General election campaign that causes damages both physical and properties to the people must be avoided. The excesses of such a campaign will only disgrace the general election and tarnish democratic practices that we want to uphold in this country. For this reason, we want to put the emphasis of coming general election on a dialogue campaign, by discussing development issues confronting the Indonesian nation and subsequent development programs.

Automatically, it is unavoidable that the political climate will "heat up". It means that all parties concerned prepare themselves to participate in the reformation process we go through every five years. The Guidelines of State Policy that we formulated once in every five years contain a reform. It is impossible for us to set precisely the same Guidelines. The elaboration on the Constitution itself demands us to take into account the dynamism of our society every five years. We also renew the government every five years. What we have to avoid is an uncontrolled situation, clashes and animosity among ourselves. This certainly is unhealthy and even endangers our nation. We have all sincerely affirm that Pancasila is the sole fundamental principle of our life as a society, nation and state. Should there be differences among us, they are not antagonistic. Because they are neither ideological nor fundamental in nature, but more on how to reach the goal we have all agreed upon. This kind of differences is the characteristic of democracy. Therefore, we can overcome them through democratic means as well. We should see to it that they are not aggravated unproportionally, particularly when irrational elements are involved, which are primordial in character, that disseminate sensitive issues to the people. These practices are identical with sowing the seeds of dissension to destroy the national unity, as exemplified by recent incidents in a number of places.

However, the overall political stability and security at home continue to be well under control. Although its dynamism is high and not without problem, but the national stability continues to be preserved in a sound manner.

This situation allows us to continue development on the basis of the Trilogy of Development. In these last three years during Repelita VI -- our economic growth rate has been quite high, i.e. 7.5 percent in 1994 and 8.2 percent in 1995. While in 1996, it is predicted to be around these figures. Which such growth rate, the per capita income of our nation 1995 has surpassed US$1,000.

This trend of high growth has apparently not been followed by higher inflation rate. Conversely, the inflation rate since 1993 continued to decline. In 1993, it was 9.8 percent, then it went down to 9.2 percent in 1994, and even lower to 8.6 percent in 1995. In 1996 we have just passed, it dropped further to 6.47 percent.

To preserve economic stability, we should seriously control the current account deficit. In 1995/1996, it was $7 billion or 3.4 percent of the gross domestic product (GDP). In 1996/1997, we predict that it will rise to $8.8 billion or about 4 percent of the GDP. This situation is mainly caused by the rather slow growth rate of our export, even though the rate of import has also slowed down. This is also accompanied with the relatively high services account deficit that led to the increased current account deficit. However, with the strong capital inflow, this deficit has been compensated and foreign exchange reserves are in a solid and safe position.

Indeed, we have to try to reduce this current account deficit. There are only two ways to do it, i.e. to increase export and control import. We must continue to boost export, not only through investment that will produce more expanded and diversified export products but also through the enhancement of the competitive edge. Higher competitiveness can be achieved through increased efficiency and productivity.

Increased efficiency involves the improvement of our economic institutions, including the market, economic agents and state apparatus itself. In this context, the deregulation and rebureaucratization must be continued, coupled with removing the unnecessary economic burdens. Unauthorized and illegal levies which are in contravention with higher rulings should be stopped.

We must control import by using as much as possible domestic products and services. The domestic market will grow bigger. The expanded market must, first of all, become the market for our own products. In the current globalization era, his effort can no longer be made through government protection. The people themselves must have the awareness to buy domestic products, rather than imported ones. This is the manifestation of a new nationalism. Producers should also continue to improve the quality of the products and raise their competitive edge. In promoting investment, the business community should not use imported components if they are already produced domestically. Investment must be geared towards producing competitive products or saving foreign exchange.

One of the worst manifestations of gap is in poverty. During the current Repelita VI, we continue the effort of poverty alleviation, that we have quite successfully carried out during the First 25-Year Long-Term Development program. Since the first year of Repelita VI, we have intensified this effort through development programs in all sectors and all regions. In addition, a special program has been launched to free the people who are trapped in pockets of poverty that we refer to as "the least developed villages". The result has been very encouraging. I have just received a provisional report of the outcome of the 1996 National Socio-Economic Survey that is being used as the basis to count the number of people still living below the poverty line.

The last figure we have been using was the result of the 1993 National Survey. The number was close to 26 million people who were living below the poverty line or about 14 percent of the total Indonesian population. Among these poor people, there are around 17 million or almost 14 percent of the rural population and more than 8 million persons or approximately 13 percent of the urban population. Based on the 1996 National Survey, the number of the poor people has dropped to around 15 million or about 12 percent; and in the urban areas it became more than 6 million persons or 10 percent of the population.

It is against the background I have just explained that the 1997-1998 Draft State Budget has been prepared. In compliance with the Guidelines of State Policy, the budget is dynamically balanced. This means that state expenditures are adjusted to its revenues. Should in its implementation the state revenues surpass its expenditures, the balanced can be saved as development budget reserve.

The 1997-1998 State Budget is envisaged to be balanced at the level of Rp101.1 trillion. For the first time our State Budget surpasses Rp100 trillion. Domestic revenues are estimated at Rp 88.1 trillion or 87.1 percent of the total state earnings.

In calculating the sources of domestic revenues, we also want to minimize the element of unpredictability. This is also aimed at ensuring that the spending of the 1997-1998 budget will not differ too much from the original plan. Also to prevent the revision of development projects due to revenues that did not reach its target. Therefore, even though the realization of the first semester of the 1996-1997 fiscal year showed the average export price of oil was higher than $19 per barrel, we set the bench price at $16.5 per for 1997-1998. The setting of this bench price is based, among other things, on the possibility of increased oil production in the world.

Domestic revenues rely heavily on taxes. We predict our tax revenues will be more than Rp 64 trillion or increase of almost 16 percent from the previous year.

With an economy that continues to grow, as a result the tax revenues will also continue to increase. For this reason, it is expected that tax revenues collected from the public will have the highest increase, i.e. almost by 23 percent.

The level of state revenues primarily depends on our awareness to pay tax. Because in our tax system the people assess their own tax. The ratio between tax and national non-oil/gas production shows that we still have to enhance the awareness to pay tax. For the year 1995-1996, the ratio was only around 11 percent. This figure was the lowest among our neighboring countries in ASEAN. For the 1997-1998 fiscal year, our tax ratio only reach about 12 percent. The Philippines, which has the second lowest ratio after us, already has a ratio of approximately 16 percent. Even more so when we compare it with Malaysia which has a ratio of higher than 33 percent.

If only we had the same tax ratio as the Philippines, namely around 16 percent, our domestic revenues would have increased to around Rp 21 trillion. With such substantial funds, we could carry out more development activities. Or, conversely, we could reduce foreign loan for development purposes.

We must seriously pay attention to this matter. On this occasion once again I appeal to all tax payers to earnestly fulfill their obligation. We must always remember that tax is not just a mere source of revenues, but it is also a means to create justice.

Furthermore, with regard to expenditures, the routine expenditures are envisaged to reach Rp 62.2 trillion or an increase of 10.8 percent compared to those allocated for the current fiscal year.

The largest routine expenditures are for personnel expenditures, both for civil servants at the central and regional governments. The total amount reaches more than Rp 32 trillion, which means an increase of close to 16 percent from the current one.

Every time state expenditures are drafted for civil servant salaries, automatically the effort to improve their well-being is taken into consideration. The well-being of civil servants today is much better compared with in the past. So far, the salaries have been raised by stages.

However, the advanced pace of development also leads to greater needs and higher expectations of man. We still feel the burden of a civil servant's life, despite the substantial budget allocated for personnel expenditures. The problem is the great number of our civil servants, because our country is indeed big, with a vast territory and huge population which is unevenly scattered and live in thousands of islands. All of this requires government services in the widest sense of the word.

Another large expenditures are for debt servicing. The expenditures for next year's debt servicing will be lower, both in terms of its percentage in the routine expenditures and its absolute value. In 1996-1997, the debt servicing reached over Rp 20 trillion, which constituted 36 percent of the whole routine expenditures. For next year, the expenditures are envisaged to reach more than Rp 19 trillion or around 31 percent of the whole routine expenditures.

The lower debt servicing is caused by two reasons. Firstly, because of the Yen depreciation; and secondly, because of the accelerated repayment of government high-interest external debt, namely above 10 percent. During the last three fiscal years, the acceleration of external debt repayment amounted to $2.6 billion or equivalent to about Rp 6 trillion. Today, the process is going on to accelerate debt repayment of another $750 million. The source for the accelerated debt repayment comes from the overseas sales of some of the government shares in various state-owned companies and from budget surplus, i.e. revenues which surpassed the planned expenditures in the previous years. With the acceleration of debt repayment we can save the payment of interest later on to the tune of $ 1.45 billion or equivalent to Rp 3.4 trillion.

With the envisaged domestic revenues and routine expenditures as I have just explained, the public savings will be close to Rp 26 trillion, which means an increase of around 17 percent from the current figure.

Public savings are the prime source of our development budget. As a complement, we receive foreign loan that is utilized to finance projects which have high-import content. This foreign loan -- which we refer to as development revenues -- amounts to Rp13 trillion. Compared to the present one, the increase is quite small, i.e. less than 5 percent. The total public savings and foreign loan represents development budget of close to Rp 39 trillion, which means an increase by almost 13 percent from the current one. During these last three years, the portion of public savings in the development budget continues to rise; from almost 62 percent in 1995-1996 to 64 percent in 1996-1997, and it will be more than 66 percent in the coming 1997-1998. This shows our greater ability to carry out development on our own.

We are aware that the attainment of the goals of Repelita VI does not all depend on the government. Because a great number of these goals are determined by the public activities, including the business community. For example, the non-oil/gas export growth and the lowering of population growth rate. The government role here is to provide guidance and stimulus as well as to create a conducive climate for public activities aimed at reaching these goals. It is also on this basis that the government adopts investment policies, whether for human resources development, economic infrastructure or institutional development.

Most of the development budget is allocated for the regions, that comprise of Inpres funds as well as land and building tax. The budget reaches close to Rp 10 trillion, which means 38 percent of the overall development budget. From this amount, the Inpres funds have increased quite substantially, i.e. more than Rp 1.2 trillion in comparison with the current year.

The increase of Inpres funds is attributed to a number of reasons. Firstly, the increased assistance to the on-going activities, whether in its values, size and scope. Secondly, several activities -- which have so far been handled on the central level through sectoral budget -- now become the responsibility of the regions. Thirdly, there are new undertakings in the respective Inpres programs. There is even a new Inpres, namely: Food Supplement Program for School Children.

The Inpres programs are an essential and strategic element for the equitable distribution of development and, at the same time, assist regional development. Together with Land and Building Tax, the Inpres funds are an essential component of the regional revenues and expenditures, both of the Level-I and Level-II Regions. In fact, for the nine provinces -- or one-third of all our provinces -- the funds from the central government which were managed by the regions during 1996-1997 amounted to more than half of their regional budgets.

We are aware of the importance of childhood, the growing-up period of children, for their intelligence and health until they reach adulthood. The nutrition and health standard during the growing-up period is extremely crucial for the quality of Indonesia's human resources in the future.

Based on this consideration, the food supplement program for school children was initiated in 1995-1996 on a small scale as a pioneering project. In 1996-1997, this program was continued as one of the activities of the health Inpres. In that year, the target of the program was to cover over 18,000 elementary schools and Islamic elementary schools located in more than the 14,000 villages under the Least-Developed Village Inpres (IDT) and covered in excess of 2.3 million school children.

This program has apparently been very successful. The result of a survey showed that the physical condition and the desire to learn of these children have improved. In addition, the economy of the village where this program is being carried out has also improved as a result of the marketing of the increased local products due to -- among other things -- the IDT program.

Based on this, the scope of this program has been expanded and also for this reason that it is being coordinated by a special Inpres. This Inpres program will cover all villages that receive IDT assistance, numbering more than 280,000; with a budget of Rp265 billion.

The number of school children who will receive food supplement increases more than three times, i.e. 7.4 million children attending well over 49,000 elementary schools and Islamic elementary schools, both public and private. In addition to the three times a week food supplement, all school children are also given medicine against worm every six months. Clean water will also be provided together with this program to elementary schools and Islamic elementary schools, through the Level-II Region Inpres. Thus, all efforts are being made to improve the health and nutrition standards of our school children from the most basic level. All of this is an essential step to build a skillful and healthy individual for development in the future.

We hope that depending on state finances, this program may gradually cover all pupils of elementary schools and Islamic elementary schools all over Indonesia, with a total of almost 30 million children today.

Although the Food supplement Program for School Children is no longer a part of the Health Inpres, the funds for the latter, however, has increased quite significantly, i.e. almost 16 percent or amounting to more than Rp 600 billion. This increase includes the transfer of activities which were originally carried out by the central government to the local authorities, such as medical aid to the public. This medical aid is intended to combat wide-spread diseases in the community, such as lung tuberculosis, malaria, and vitamin-A and iodine deficiencies. Disease prevention efforts are also being carried out by providing various vaccines. For example, just to prevent type B hepatitis, vaccines will have to be provided for 4.6 million babies, that will cover most of the babies who will be born next year.

Furthermore, the public health service network will continue to be upgraded. Public health centers and auxiliary health centers will be reinforced. The number of village midwives, who are already available in almost every village all over Indonesia, will be increased. Health services network -- particularly on the lowest level, that are directly related to the community in the rural areas and hinterlands -- will have a primary attention.

These two Inpres programs -- together with Elementary School Inpres -- are parts of the fundamental strategy for the expanded and equitable human resources development. Funds for Elementary School Inpres are earmarked to the tune of over Rp 660 billion, which means an increase of around 11 percent. The funds for Elementary School Inpres are not all covered by this Inpres, because a part of them are covered by the Level-II Region Inpres. As a consequence, the total funds as well as its increase are far bigger.

Furthermore, we will continue with the IDT program, although the formerly least-developed villages have received assistance as planned, namely three times of Rp 20 million each.

However, starting with the current fiscal year, all villages in the East Nusa Tenggara, East Timor, the Moluccas and Irian Jaya provinces and isolated regencies namely Sangihe Talaud, Lubuk Banggai, Riau Islands and Nias will also receive IDT assistance. So that IDT funds for the next fiscal year will be allocated to villages in these regions. The number of villages that must still be assisted is more than 6500 and the funds allocated are close to RP 130 billion.

In the IDT program for 1997/98, there is a new component which has to date been accommodated in the sectoral budget, i.e. the development of rural infrastructure, This will be financed from various sources, namely : state budget and assistance from the World Bank, the Asian Development Bank and the Government of Japan.

The development of rural infrastructure is aimed at breaking the isolation that caused these villages to become least- developed because of the non-existence or scarcity of infrastructure. We plan that by the end of Repelita VI, all villages will have their infrastructure, so as to reduce the impediments that cause poverty. Basically speaking, the development of rural infrastructure is carried out by the rural population themselves under the guidance of the technical authorities concerned.

With these programs, the funds for IDT next year will be Rp 480 billion.

The IDT program can not be detached from the overall rural development which is aimed at ensuring that the rural population will not be lagging farther behind an that they can follow the development drive in line with the increasingly fast tempo. In this connection, the Village Inpres is still essential. For the coming year, there will be additional assistance to help the poor community in the village. The Village Inpres is envisaged to reach more than Rp 460 billion.

Obviously, , rural development does not only rely on IDT program and Village Inpres. Because many other activities in various sectors are also taking place in the rural areas; such as development in the agricultural field and all the activities of other sectors that sustain it.

Furthermore, the Level-II Region Inpres will enjoy the highest budget increase, i.e. almost 20 percent. The amount reaches to almost Rp 3,.5 trillion. Its portion in the overall Inpres funds is also the biggest, namely : around 45 percent. This reflects our intention to make Level-II Region as the central point of regional autonomy.

A substantial increase is also expected of the funds for Level-I Region Inpres. The total budget will be almost Rp 1.7 trillion or an increase of close to 17 percent of the current budget.

The overall development budget increase by almost 13 percent.

The sector which has the highest increase is Population and Prosperous Family, namely more than 110 percent. The total budget amounts to around Rp 690 billion. The increase is needed to expedite poverty alleviation by the prosperous family approach to be applied in villages outside the IDT. The Government provides a budget of Rp 300 billion as revolving capital that will complement the funds collected from the public. In addition, the effort to control the population through the family planning program will continue to halve priority, because it is very essential to ensure the success of development as a whole.

The second highest rise is in the Political, Foreign Relations, Information, Communications and Mass media sector. It will be mainly used to support activities related to the next general election and the General Assembly 0of the People's Congress. The increase is around 56 percent, so the budget allocated for this sector will be about Rp 286 billion.

The third biggest increase is in the sector that covers health and social areas, with an increase of around 53 percent. The budget for the Social Welfare, Health, Role of Women, Child and Youth sector is planned to reach more that Rp 2 trillion. The largest increase is in the women, child and youth sub-sector, i.e. by 237 percent.

From this total, the largest budget is reserved for the development of the Health sub-sector, with a budget of Rp 1.5 trillion. Some of them -- about one third -- is directly channeled to all over the regions through the Health Inpres. The rest, among others, is for the improvement of the quality of services in the hospitals and for the construction of new hospitals and for the improvement of hospitals in Level-II Regions, especially isolated regions such as in provinces in the eastern part of Indonesia.

The fourth largest increase of budget is in the Manpower sector, namely 44 percent The budget will reach close to Rp 270 billion. It will mainly be used to intensify trainings aimed at overcoming the problem of unemployment.

The sector of Trade, National Business Promotion, Finance and Cooperatives will get a budget of over Rp 550 billion. This sector has the fifth highest increase, i.e. 37 percent. This increase is for the promotion of non-oil/gas export and development of small enterprises and cooperatives. The funds from the development budget to develop small enterprises and cooperatives are just a part of the available resources for this sector. Apart from the state budget, for the promotion of small and medium enterprises there are other credit lines, partnership funds from big businessmen and funds from 1 to 5 percent of the profits of State-owned Companies. Moreover, the government procurement must also become the source of the promotion of small and medium enterprises, especially in the provision of goods and service which do not require a really high technology and the volume of which is not too large.

The sector that has a budget with a substantial increase is Education -- including the National Culture, Belief in the One and Only God, Youth and Sports -- with a budget amounting to almost Rp 4.7 trillion. This is more or less 12 percent of the overall development budget.

Some of the activities of this sector are covered by the various Inpres programs I explained earlier. The priority of the educational field is to continue the nine-year compulsory basic education. Others are for the expansion and improvement of vocational education and the improvement of the quality of education in all types, levels and disciplines, including higher education. Greater attention will be given to the iprovement of the quality of teachers at all levels of education.

The budget for the industrial sector is planned for almost Rp 590 billion. Including the support to various industrial activities as the prime source of the national economic growth, among other things through the upgrading of the technological, research and training skills.

The Agricultural sector -- including forestry -- has a budget off more than Rp 1.5 trillion. It will be mainly used to consolidate food self-sufficiency, raise the competitive edge of various profitable agricultural commodities and alleviate poverty in the rural areas.

Furthermore, the irrigation sector will get a budget in excess of Rp 2.6 trillion or an increase3e by almost 14 percent. About 38 percent of this budget will be used to develop the eastern part of Indonesia.

The Transportation sector -- including meteorology and geophysics -- will have a budget of more than Rp 6.8 trillion. Around 2/3 of this budget will be used to build road infrastructure. Most of it will be for upgrading road infrastructure outside Java, which are mostly located in the eastern part of Indonesia.

Also in the sea communication area, there are plans to build and rehabilitate wharves in 47 locations, where 32 locations are in the eastern part of Indonesia. Subsidies will continue to be provided for the operation of 39 pioneer ships. In the air communication field, 16 airports will be expanded and construction of the 3 pioneer airports in 3 locations will be continued.

The Mining and Energy sector has a budget of a little over Rp 4.4 trillion. Almost all of it is concentrated on the energy sub- sector, especially to support power generation, among others for rural electrification. In 1997/98, more than 5200 villages will have electricity. Thus, since the First 25-Year Long-Term Development program, more than 47,000 villages have enjoyed electricity; or three-fourths of villages all over the country.

The Tourism, Post and Telecommunications sector has a budget of more than Rp 960 billion. As a whole, the budget for this sector declines because of the reduced budget for the post and telecommunications sub-sector. The reduced budged is caused by the greater participation of the public in the development of this sub-sector and the diminishing amount of foreign aid. However, the budget for the tourism sub-sector increases quite significantly, i.e. 34 percent. It is intended to support tourism development as a source of employment opportunities and the extremely important foreign exchange earnings.

Other activities in this sector are to raise the capacity of the postal and giro services which are supported by a network of post offices and auxiliary post offices and a network of mobile urban and rural post office. In 1997-1998, the government will allocate budget for the installment of new telephone lines totaling 700,000 units, including rural telecommunications and the construction of telecommunication transmission network to increase communication between the various regions in Indonesia.

In the Rural development sector -- including transmigration -- a budget of almost Rp 7.2 trillion is available. This sector gets the biggest development budget. Some of the activities of this sector has already been covered by Inpres programs.

In the rural development, we pay our primary attention to the effort to stimulate growth in the least-developed areas. Rural development must be carried out through planning and with guidance so that the limited funds can be used as well as possible. For this purpose, new growth-potential areas must be developed.

The next sector is the Environment -- including spatial planning -- which will have a budget of around Rp 680 billion. It will be used, among other things, for the empowerment of state apparatuses both at the central and regional levels to protect the environment and control the impact of development on the environment. In addition, the scope of activities will also be continued and expanded for the rehabilitation of critical lands, replantation and reforestation which are covered by various Inpres programs.

Next, the Housing and Settlement sector will have a budget of over Rp 1.5 trillion. It is made available for, among other things, supporting the construction of 110,000 simple and very simple houses. It is also allocated for the expansion of clean water provision for 6 million inhabitants in the rural and urban areas and the improvement of housing complexes particularly in the urban areas.

The Religion sector has a budget of Rp 300 billion. This sector has always received attention because of its important role in development, among others, in the nine-year basic educational programs with the Islamic elementary and secondary schools.

The Science and Technology sector receives a budget exceeding Rp 880 billion. The program will include, among other things, development of the capacity of research sources, inclusive development of research means and infrastructure and technological services.

The Law sector will have a budget of Rp 195 billion. A great attention is being given to this sector and for this reason its development budget continues to rise. Hopefully, with this continuously bigger budget, it can carry out its function and role as a means to ensure law and order and well-being, as well as a means to build a society imbued with justice.

The State Apparatus and Supervision sector has a budget of Rp 911 billion. It will be used to improve services of state apparatus to the public, enhance the ability to manage public administration and development as well as to encourage, guide and sustain development which is being carried out by the people.

The last sector is Defense and Security, with a budget of more than Rp 1.7 trillion. The priority of the development of defense and security is to improve the human resources quality, and in stages modernize and provide equipments to units which have not yet met the minimum standard.

We are also drafting the 1997/98 State Budget with a view to preparing ourselves in facing this future, by reaching for the common goals we agreed on in the 1993 Guidelines of State Policy and Repelita VI. We are confident these development goals will be attained, because we have achieved significant progress in development, and this makes us quite dependable to embark on the future.

However, this does not mean that all the problems are solved.

We still have the problems of the gap between sectors, gap between regions and gap between group in the society. Almost every nation has this experience in its initial stages of development. We have been able to address them in stages and with planning and it has started to produce some results.

The number of our poor population has dropped drastically. Economic powers have emerged in our society, so that we have greater strength to bear the also increasingly heavy development burdens.

However, we can not wait until poverty is completely alleviated and all gaps disappear, before we continue to reach for economic growth. If we follow this path, we will then be lagging farther behind from the progress of times. This is what we are pursuing: we try to reach economic growth and, at the same time, reduce the gaps and poverty.

We do not need to hide the existing shortcoming and gaps. Everybody is free to observe, study, discuss and offer a solution to these shortcomings and gaps. We all precisely need clear, impartial and constructive observation and ideas to address this sensitive issue.

The government will continue to seriously take into consideration every clear idea, concept and program to overcome this problem.

However, what we have been hearing often lately is the very unbalanced scrutiny over these shortcomings and gaps. As if there were no progress in addressing the shortcomings and as if the gaps were allowed to become even wider.

Let us not just talk about the gaps and poverty, even worse if it is just aimed at achieving the political goal of a group or at gaining personal popularity. This is definitely unproductive.

Continuing to blow up the issues of the gaps and poverty without offering any realistic concept for solving them may provoke the sensitivity of our diverse community. Sometimes this sensitivity -- without knowing the original causes -- may lead to riots and destruction of the economic facilities and social foundation. Thousands of employees and workers suddenly loose their sources of income. We have experienced this several times during these last few years. This has been an experience that caused very great concern. Such a bitter experience must not happen again.

The press and prominent leaders of the community can play a pivotal role in mobilizing public attention towards more productive things, restrain the emotion and encourage a clearer perception. A coverage that mixes the views of public leaders both formal and informal -- or expose differences of opinion, will only confuse the people at large and they will loose their own self-confidence. In such a situation, groups in the society will easily be instigated to become emotional and commit acts which are damaging to the nation as a whole.

Development is a change towards progress. It is a continuous reform. The deregulation and debureaucratization are concrete manifestations of the government's determination to make from and encourage the emergence of public initiative and creativity.

A change is completely different from chaos. What we need is a planned, orderly and peaceful change. The 1945 Constitution provides the means for it.

Other issues that can easily incite the emotion are corruption, collusion and manipulation. The government is fully aware of the danger of these issues. The Government and law enforcement agencies will continue to take firm action to eliminate all the malfeances. We have even set up special institutions to protect the people from the unscrupulous deeds of government personnel, we already have a State Administrative Court.

In order to protect the people against violation of their fundamental rights and the improve the quality of these rights, we have established a National Human Rights Commission.

Enforcing the law, refreshing democratic life and respecting human rights need a process. It is a simultaneous and planned process, both by government personnel and the public themselves.

In the coming years, we must intensify the activities to enforce the law, refresh democratic life and respect human rights. To achieve the greatest impact, we have to facilitate the process of political communication between the government personnel and community leaders. The goal we want to reach is the optimum readiness of our nation to confront the challenges of the coming 21st century. We are in the path and process towards improvement.

Window A: Therefore, we have to prevent general election from becoming the contrary, namely creating anxiety and sufferings of the people.

Window B: For this reason, as a nation we must always remain solidly united, so that we can concentrate our attention and energy to face the future which is full of challenges.