Indonesia Consultative Group Meeting
Tokyo, October 17-18, 2000Statement by Mr. Seiji Kojima
Deputy Director-General
Economic Cooperation Bureau
Ministry of Foreign Affairs of Japan
on
Poverty and Vulnerability: The Strategic Agenda
Basic Position
First of all, I would like to explain our basic position on the alleviation of poverty and vulnerability.
The alleviation of poverty and vulnerability is a crucial element in socio-economic development. Especially, as globalization prevails, income gaps tend to be more visible between regions, countries, and different areas of a country. In such circumstances, the issue of poverty and vulnerability emerges as one of the most critical focal points of international development efforts.
Taking into consideration the experiences of development in Asian countries, Japan is of the view that equitable and sustainable economic growth is indispensable to overcome poverty and vulnerability, and to achieve stable and self-sustaining socio-economic development. Therefore, it is important to alleviate poverty and vulnerability from the mid- and long-term perspective. It can be achieved by promoting economic growth and creating jobs through economic development measures such as infrastructure development and the support for small and medium sized enterprises (SMEs). And also it should be considered to involve impoverished people in the process of economic growth, by encouraging them to participate in market activities through providing micro-credit, supporting small farmers, and upgrading living standard of impoverished areas both in cities and rural regions.
Having in mind the importance of poverty reduction in Indonesia, we have contributed funds to the World Bank and the ADB to establish the Japan Social Development Fund and the Japan Fund for Poverty Reduction, respectively and have been supporting for poverty reduction projects in the country through those funds.
Poverty Reduction Strategy
Mr. Chairman,
As mentioned earlier, a mid- and long-term strategy is necessary for continuous and self-sustaining poverty reduction. We understand that Indonesia intends to work out a strategy equivalent to Poverty Reduction Strategy Paper (PRSP) by 2002. The strategy should be well balanced based upon the viewpoint that economic growth is a necessary condition for poverty reduction. On the other hand, the needs of impoverished and socially vulnerable people should be reflected in the drafting process so that economic growth will benefit those people. Furthermore, to ensure steady implementation of the strategy, it is important to monitor implementation and to reflect the monitoring results in policy-making process.
Future Direction
The state of poverty in Indonesia was worsened after the economic crisis of 1997. However, the situation has been improving due to the Social Safety Net (SSN) Program by the Government of Indonesia. Therefore, the emphasis of poverty reduction should be shifted from emergency measures to mid- and long-term program such as capacity building and the improvement of related systems and institutions.
In particular, to vitalize the economy and realize self-sustaining development, as well as to achieve poverty reduction, it is crucial to promote SMEs and supporting industries as well as to create jobs. And we regard it one of the priority areas of Indonesia's mid- and long-term development. SMEs and supporting industries shall be the basis for Indonesia's sustainable development and, by creating middle elms, they will lead to poverty reduction.
In this area, Japan has extended various forms of assistance to Indonesia including the dispatch of a high-level adviser on SUES. After my statement, Mr. Yamada, Director-General of the Economic Cooperation Bureau, the Ministry of International Trade and Industry, will give a detailed picture of our assistance to the promotion of SMEs.
In closing my statement, I would like to point out that correct targeting of the poor is critical for drafting a poverty reduction strategy. And it is also important to strengthen the public awareness activities to the beneficiaries of poverty reduction programs, to draft the programs based on peoples real needs, and to monitor the programs in cooperation with NGOS. In addition, with the progress in decentralization, local governments, such as provincial and municipal governments, are expected to play a leading role, and they are required to develop human resources and improve their implementing capacity.
I thank you very much.