From Government of Indonesia

Govt. Sets Ambitious Targets in Long-Term Plan

The government officially unveiled its long-term development plan on Monday (23/4/07), which envisages the current high poverty rate falling to 5% and per capita income soaring to up to $9,000 by 2025.

The economic blueprint set out in the newly endorsed Law No 17/2007 on the 2005-2025 National Long-Term Development Plan was officially unveiled by National Development Planning Board (Bappenas) chairman Paskah Suzetta.

"We will work hard to achieve these targets. Every administration in the future will have to base their programs on this vision. This is not merely a discourse, it is the law," he said in his speech during the launch, according to The Jakarta Post.

The poverty rate stood at about 17% of the country's 220 million people last year, according to the Central Bureau of Statistics (BPS), which officially categorizes people living below the poverty line as those who earn less than $1.55 a day.

Under the long-term development plan, the government is targeting an increase in per capita income to between $3,000 and $9,625 by 2025, which would place Indonesia within the ranks of middle-income countries.

BPS figures show that Indonesia's per capita income was $1,663 last year, meaning that the country is categorized by the World Bank as a lower-middle-income country.

The government has allocated Rp51 trillion ($5.6 billion) for poverty-alleviation programs in the 2007 national budget, and plans to raise the figure to Rp80 trillion in next year's budget. "But increased spending on poverty eradication is not a universal panacea for tackling this problem. We must also invite the private sector to take part in the effort," Suzetta explained.

Government efforts to eliminate rules and regulations that impeded the private sector from doing business were also important as economic growth is essential to providing more jobs, thus leading to less poverty, he said.

"For 2007-2008, President Susilo Bambang Yudhoyono is determined to boost economic growth so as to reduce poverty and unemployment," he added.

The long-term economic plan also stresses the need to create an attractive investment climate to boost foreign investment and support economic growth.

The government recently launched a number of new poverty alleviation programs, including the National People's Empowerment Program (PNPM) and the Family Hope Program (PKH). Both are being partly financed by soft loans from the World Bank and the Japan Bank for International Cooperation (JBIC).

The law's targets and priorities are divided into four development periods: Period I (2005-2009), Period II (2010-2014), Period III (2015-2019) and Period IV (2020-2024).

The main goals are raising per capita income to the level of middle-income countries, and reducing poverty rate to less than 5%; improving the quality of human resources, including the enhancement of women's roles in development; ensuring a stable economy, with agriculture and mining being prioritized; bringing about integration of infrastructure in the transportation and energy sectors; and ensuring clean governance backed by professional administrators.
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