Honourable Mr. Muhammad Lutfi, Chairman of Indonesia’s Investment Coordinating Board (BKPM),
Honourable Mr. Sathit Chanjavanul, Secretary General of Board of Investment of Thailand,
Honourable Ms. Sudjit Intaiwong, Deputy Secretary General of Board of Investment of Thailand,
Honourable Mr. Piti Sithi-Amnuai, Executive Chairman of Bangkok Bank Thailand,
Honourable Mr. Chartsiri Sophonpanich, President of Bangkok Bank Thailand,    
Distinguished Speakers,
Distinguished Guests,
Ladies and Gentlemen,
Good Afternoon to all of you

It is both an honour and great privilege for me to be here today to speak before such a distinguished audience. At first, I would like to thank to the Board of Investment of Thailand and Bangkok Bank of Public Company Limited Thailand for sponsoring this event and giving me the opportunity to address to this important seminar.

Indeed, the seminar on investment opportunities in Indonesia for Thai investor is organized on the right time. Today, Indonesia is a nation on the move. During the financial crisis in 1997, we suffered many serious blows. Poverty soared, unemployment sky-rocketed, our external debts exploded and we experienced negative growth. Of all the countries that were hit by the crisis, Indonesia suffered the most. Due to this state of affairs, our task is to continue our recovery from that horrible crisis and to rebuild our economy. And we are doing this in parallel with democratization and reforms.

All my government’s policies, strategies and actions are directed to address the stubborn problems of poverty, unemployment and external debts. We need to constantly stimulate growth, while maintaining macroeconomic stability.

To tackle the issues of unemployment and poverty, my Government has promoted the “triple track strategy”, which is achieving sustainable higher economic growth through combination of export and investment, stimulating the performance of the real sector to create employment, and promoting the development of rural economy and agriculture to alleviate poverty.

          This is a strategy which is “pro-job”, “pro-growth”, and “pro-poor”. I must say that our government also has a moral obligation to rescue many of our fellow citizens, who are trapped in the vicious cycles of poverty and unemployment across the country. This is why my government has always insisted that the only thing more important than stimulating growth is ensuring better quality growth, the kind of growth that produces more jobs, reduces poverty, lifts standard of living, protects environment, accumulates social capital, and spreads prosperity more evenly.

          We believe that we are capable of promoting “growth with equity”, and we passionately believe that the community--and by this I mean the local community--must be part of that growth, and not becoming marginalized by. This is why our government has placed so much emphasis on targeted its program for poverty reduction and job creation.

          We are doing this through fiscal-driven measures, where we have allocated more than US$ 6 billion annually, for the needs of the poor in education, health, village infrastructure, rural development, basic commodities, and job creation. We call this package “post-crisis new deal.” And my government passionately believe that it is a deal that will bring our country to a new height of development and common prosperity

As the result, our economy is today doing well. Despite the tsunami, the oil price, the rise of the Federal rates, the endless natural disasters, the avian flu, our macro-economic performance is moving along. Our GDP grew by 5.5% last year, and this year we are expecting growth to be around 6.0% (within a range between 5.7-6.3%), which surpasses economic growth in 2005 and 2006. During this year, the main thrust of our economic growth will stem from consumption with some assistance from private investment and greater government capital expenditure.
 
In 2006, our income per capita stood at US$ 1,500, well above the pre-crisis level. Our Rupiah is stable at around Rp 9,200 per US dollar. Our trade grew around 17% last year, our reserves—at over US$ 40 billion--are the highest it’s ever been, and our stock market is one of the top three in Asia. I am confident that things will continue to improve.

Excellencies,
Distinguished Guests,
Ladies and Gentlemen,

Looking at our bilateral economic relation, I observed that our economic cooperation has been increasingly promoted. In the economic sphere, the volume of trade between the two countries has been considerably increased, as we can see by the volume of trade in the year of 2003 which registered US$ 4.02 billion; in the year 2004 was US$5.53 billion; in the year 2005 was US$7.13 billion, and from January to November 2006 stood at US$6.12 billion.

Observing the upward trend of the trade volume in the last 4 years, I believe that we could optimistically set the projection that in the year 2010 the volume of trade could reach of US$ 10 billion. In the purpose of achieving the said projection, the governments and the stakeholders in the business sectors from both countries should work laboriously, where the governments will facilitate and encourage the business sectors by creating the mechanism on how to meet the target. The possible creation of the Joint Trade Sub Committee under theJoint Commission Indonesia–Thailand right away after the conclusion of the Trade Agreement between Indonesia and Thailand, which is now under consideration, also believed to be significant way towards the achievement of the trade volume projection in the next 3 years.

          In term of investment, we noted that for the year 2006 until October Thailand’s investment in Indonesia has reached amount of US$123.9 million. The amount is marking the highest level since the financial crisis. However, I believe that the existing amount of investment has not fully reflected the real economic potentials of both countries. There are still plenty of rooms available to be developed for investment, and for instance in the fisheries sector.

If we are talking about fisheries relationship between our two countries, we will be talking about the complementarities of the two countries. Indonesia is an archipelagic country with abundant marine fisheries resources, meanwhile Thailand has great potentials in capital, technology and human resources in this sector.
From Indonesian perspectives, these complementarities should be established in the form of partnership under a Joint Venture scheme of integrated fishing industries, consisting of at least fishing and processing activities in Indonesian territory. I entrust that this new policy of integrated fishing industries for foreign investment and cooperation should be a wise step to ensure mutual benefits and problem-solver for both countries through win-win solution.  This new policy should also contribute in developing cooperation not only in the catching fisheries but also in marketing, training, aquaculture, as well as fisheries processing and canning based on the complementarities and potentials of the two countries.

This policy is based on the Marine Affairs and Fisheries Ministerial Decree No. 17/2006 concerning Capture Fisheries Business in Indonesia. This new regulation is published to replace the Ministerial decree No. 10/2003 pertaining licensing scheme for fishing enterprises. However, both regulations have the same spirit to develop fishermen effort and to develop strength, independent and sustainable capture fisheries industry in Indonesia.

Through this new regulation, it is our fervent hope that the Thai private sectors could response positively. I believe, that the new arrangement is based on the principle of fairness and equal treatment to whole neighbouring countries, including Thailand.

Distinguished Guests,
Ladies and Gentlemen,

Before closing my remarks, let me reiterate some points. Indonesia has made important progress in laying the foundation for a durable improvement in macroeconomic fundamentals. However, there are still much to be done in Indonesia. In some areas, we have not been able to move faster that we would have liked as a host of complex reason. But we are determined to move ahead, making use of the progress we have attained, towards a more firm basis in our economic, social and political life. I fully expect our macroeconomic policy, coupled with the consistent implementation of our structural reform will allow economic to grow as targeted beforehand.      

Our government’s optimism could be warranted if our partners such as Thailand and others are continuously supportive. As the investment is a crucial element in achieving higher growth, while the domestic source of funds for new investment is inadequate, the foreign direct investments are greatly needed. Indeed, in this occasion, I would like to extend my highest gratitude to the Board of Investment of Thailand, Bangkok Bank of Public Company Limited Thailand and other important parties for their continued supports to Indonesia’s economic development.

And towards the end, let us work hand in hand to turn the vast economic potentials of both countries into reality. This is also, I believe that this seminar will bring a new spirit of cooperation, especially in the economic and investment sectors and, after all will construct more building blocks on our bilateral relations where Indonesia and Thailand could share their potentials

I thank you.

Bangkok, 26 February 2007