Countries and Regions

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Country Strategy and Program Update 2005: Indonesia

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II. Government Vision and Plan

7. The vision of the Government is to create an Indonesia that (i) is safe and peaceful, (ii) offers justice and democracy to all citizens, and (iii) is prosperous. This vision is the basis for the recently approved Medium Term Development Plan for 2005–2009 (the Plan), the first such plan that represents the platform and vision of a President elected directly by the people. While earlier plans focused on listing publicly funded projects, the new plan emphasizes policy and institutional reform, and envisages the active involvement of the private sector in infrastructure provision. This strategy to enhance the role and involvement of civil society is ambitious.

8. To create a prosperous Indonesia, the Government expects to support policies and programs in the social sectors to improve access, equity, and quality of basic social services. These include education, health and family planning, and community services for the poor and vulnerable. An average GDP growth rate of 6–7% per year, combined with social sector programs, would support the Government’s employment and poverty reduction targets. The Government has identified five priority areas to achieve this growth:

1. adopting job creation and poverty reduction programs;
2. maintaining macroeconomic stability through stable prices, fiscal sustainability, and financial sector reforms;
3. accelerating the growth of investments, exports, and tourism through reforms to create a healthy business climate and flexible markets;
4. improving human resources; and
5. developing infrastructure by improving the efficiency of services and encouraging greater private sector participation.

9. The vision and plans were presented and discussed at the 14th Consultative Group on Indonesia meeting, led for the first time by the Government. The group met in the middle of January 2005 on the heels of the comprehensive Infrastructure Summit. These forums signaled to the international community and other stakeholders that the new economic team has a coordinated vision and direction, as reflected in the Plan, and a determination to accelerate infrastructure investments, which have lagged since the Asian financial crisis.

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