G8 & G20 Youth Summits

June 3rd

-9th

, 2012

Washington, D.C.

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Name : Safrian Adam Farizi

First applied position : Head of State

Reorienting Development Direction Towards Better Indonesia In 2025

Our world has changed. After two consecutive economic crises in 2008 and 2011

that strikes international society, overall world economic growth is slowed down, and

currently is still in dawdling recovery process. New economy epicentre rises in eastern Asia

in the form of emerging market countries such as People Republic of China, India, and

Southeast Asia. As the biggest country Southeast Asia, Indonesia has to exercise this

situation to advance its growth.

In order to use this currently changing global condition, reorientation of our

development direction should be employed so that the comparative and competitive

advantages finally could be attained both regionally and internationally. Our general

strategy is the empowerment of each and every stakeholder in society so that even, fair, and

sustainable development can be put into implementation. Furthermore, this strategy

incorporates quality improvement of our human resources, strengthening of our domestic

economy, improvement of our infrastructures, and reformation of our bureaucracy. Not less

important in this respect is to keep the pace of our development effort in order to sustain its

achievement and, internationally, to strengthen our cooperation with countries in the so

called South-South Cooperation.

Depending on the perspective we use, human resources in Indonesia actually can be

a problem and a solution as well to our development objectives. From the quantity side, at

the present moment we are now enjoy the decreasing of dependency ratio (CMOEA, 2011).

However, our human resources are still lacking in term of quality, which is reflected by our

low Human Development Index (HDI) in 124th

position of countries all over the globe (The

Jakarta Post, 2011). Therefore, the improvement of the quality of our human resources

should comprises the following steps: betterment of family planning facilities and public

health services all around Indonesia as well as controlling population distribution;

betterment of access to education including conventional and vocational school through

enhancement of schools, universities, research centres, and scholarships offering;

betterment and fairly access to health facility everywhere in Indonesia; and lastly

development of woman and children potential through woman emancipation and reducing

discrimination and also the protection of children from exploitation and child-criminalism.

Our domestic economy is our main drive in overcoming world crises in 2008 and

2011 (Tempo, 2011). Using bottom to top approach, the foundation of our domestic

economy pyramid is SMEs (Small and Medium Enterprises), which employ 99.99% of our

workforce and contribute 57.12% to our GDP (MOC, 2010). The current problems are

accessibility to information, competitiveness, and marketing (Sutirman, 2007), and these

problems are getting worse as ACFTA is effective in the January 2010. Therefore, the

government involvement is needed in protecting the existence of those belongs to SMEs

through effective and efficient policies and regulations in the form of providing licence,

strategic location or economic zone, trainings, technology transfer, information, funding,

and market accessibility. Participation of SOE, LGOE, and POE should also be stimulated

so that the multiplier effect to the community can be greater.

With the aim to accelerate our domestic economy, capital investment is essential,

but should be controlled carefully. The good news is that Indonesia just earn investment

grade from Fitch in December 2011, which predictably will attract more investors,

domestic and foreign. In spite of that fact, government involvement is important in assuring

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that the investment is not placed and centralized say, in Java only, the current economy

centre of our state. Privatisation of important SOE to attract investment should be omitted

from our mind frame. New economy nexus should be established in other regions such as

Sumatera, Kalimantan, Nusa Tenggara, Sulawesi, Maluku, and Papua. These nexuses

should honour the local potential of those regions, as well as the current economy condition

of that region. The stimulation of SMEs with local orientation should work in the regions

such as Papua and Maluku too, while the government provides them with market

accessibility and essential business information system. Regions such as Sumatra and

Kalimantan should also be given more space of investment in developing their potential as

powerhouse of our state, but the participation of SMEs, LGOEs, and the local government

itself should be catalysed by the central government. Sulawesi on the other hand should be

our nexus of agricultural and fishery, so the investment should be more focused in

developing primary industries to give added values to their agricultural and fishery, with

the cooperation of LGOEs and SMEs.

Those nexuses in each island will stay localised until the central government

provides them with connection. The development of connectivity is the improvement of our

infrastructures such as roads, railways, seaports, airports, bridges, irrigation system, waste

water system, electricity, communication, and oil and gas system. Due to the limited budget,

in improving our infrastructures we need to synergise our effort with private sector using

the PPP (Public Private Partnership) model and the BOT (Build Operate Transfer) model in

particular (Adji, 2010). In addition, more concrete and clear policy and regulation should

be made so that more investors will be interested in financing our infrastructures. Other

than that, policies and regulations have to be made in single mind frame so that there will

be no sectoral overlapping.

In keeping our sustainability in development, the main strategy is to utilise our

natural resource with respect of its restoration rate. The preservation of our environment is

a must, and legally bound on our commitment to reduce 26% of our GHG (Green House

Gases) emission by 2020, and 41% by help from developed countries. All our economic

activity should be based on the fact that we borrow our resources from our successors. This

can be done through optimisation of our REDD (Reduction of Emissions from

Deforestation and Degradation) program to minimise deforestation, and local wisdom

based development. Of our energy sovereignty, diversification and fuel subsidise reduction

is the key. Our 25/25 target which states that 25% of our final energy using in 2025 must be

coming from renewable energy such as geothermal, wind, water and sun can only be

achieved if the condition is favourable, through cross subsidise using DP (depletion

premium), while our oil and gas must be used to satisfy domestic demands because it is

limited. The moratorium of new natural gas contract is inevitable, and more hydrocarbon

exploration towards deep sea and East Indonesia region should be encouraged.

Aside from physical improvement of sectors in our country, bureaucratic reform has

to be sustained due to the fact that it is the root of our solution in many problems.

According to 2009 World Economic Forum, inefficient government bureaucracy is the first

problem in doing business in Indonesia (Adji, 2010). The reform should include

government institutional reform, consolidation of regional autonomy, and betterment of

synergy between local and state government, as well as law supremacy (Sutedjo, 2010).

Corruption should also be disinfected from our bureaucracy system, by giving more

mandates to institutions such as BPK and KPK. This reformation should also be accelerated,

in order to create lean, effective and efficient bureaucracy system. Two main effect of

efficient of bureaucracy system is the reduction of our routine spending as well as more

presentable towards investors.

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International cooperation is our basis to interact with other countries, especially

developing countries, famously called South countries. Moreover, statistic shown that

during and after economy crisis in 2008, trades between India-China-Indonesia is

increasing, and also since 2008, developing countries’ export growth which is initiated by

demands from other developing countries, has increased significantly with total

contribution is 54 percent (CMOEA, 2011). Not only in trading, multi-sectoral bond

between developing countries should also be fortified in the form of South to South

Cooperation which serves as a complement to the present North to South Cooperation. This

cooperation includes many sectors, not just in economy but mainly in sharing experience in

combating common development problems in developing country (Secretariat of UNCAC,

2011). As one of the South country that is also member of G20, we should continue to

contribute to share our experience in solving common development problems in developing

country, so that in the future, the aspirations of developing country will have more

bargaining power in international fora.

To conclude, the betterment of Indonesia is neither an easy nor short time task. Our

currently trickle down approach should be reoriented to more trickle up approach, in order

to empower the weak. High economy growth of our country is no use if the disparity

between the rich and the poor is getting higher, after all. Sustainable development should

be exercised in all sectors so as to minimise our contribution to the destruction of our

environment. Lastly, the promising potential of South-South Cooperation should be

optimised through maintenance of the cooperation, in order to keep the initiative of

developing countries in the international society.

References: Coordinating Ministry of Economic Affairs (CMOEA). 2011. Masterplan: Acceleration and Expansion of

Indonesia Economic Development 2011-2025. Jakarta: CMOEA

The Jakarta Post. 2011. 11/02/2011 Edition: “Indonesia ranks 124th in 2011 Human Development Index”.

Tempo. 2011. 12-18 of December edition.

Ministry of Cooperatives (MOC). 2010. Perkembangan Usaha Mikro, Kecil, dan Menengah (UMKM) dan

Usaha Besar (UB) Tahun 2009-2010. Jakarta: MOC.

Sutirman. 2007. Pemberdayaan UMKM Melalui Pusat Komunikasi Bisnis Berbasis Web (Suatu Gagasan).

Adji, Gunawan. 2010. The Smart Handbook of Public Private Partnership. Jakarta: Rene Publisher

Sutedjo, Bambang. 2010. Pembangunan Aparatur Dalam Rencana Pembangunan Jangka Menengah

(RPJMN) 2010-2014. Presented in DIKLATPIM II, Jakarta, 2010.

Secretariat of UNCAC. 2011. South-South Cooperation In The Fight Against Corruption. Background Paper

presented in COSP of UNCAC, Marrakesh, October 2011.

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Name : Safrian Adam Farizi

Second applied position : Minister of Environment

Our Target on 26% Emissions Abatement in 2020: Progress, Challenges, and

Opportunities

The international society has been made aware of the bitter truth of this century:

global climate change is caused mostly by human activity, and if we cannot keep the

concentration of CO2 below 450 ppm (Salim, 2010), our grandchildren will have to pay for

what we have done. Therefore, nations across the globe are moving fast in reducing their

emission according to a top down approach, legally binding, Kyoto Protocol. Nevertheless,

the first period of Kyoto protocol ends in 2012 with still not much progress in emission

reduction by now. Thus, Bali Road Map in COP 13, Copenhagen Accord in COP 15, and

Cancun Agreements in COP 16 are made to make sure that emission reduction is still

ongoing after 2012. However, one of the main principles of Kyoto Protocol, “common but

differentiated responsibility” is still the base of all new agreements. In short, this principle

states that each country has the common responsibility to reduce emission, but the

responsibility differs from developed to developing countries. Indonesia as one of the key

developing countries must also shares the “common but differentiated responsibility”

principle.

The first time Indonesia announce its emission abatement target is in G20 Summit

in Pittsburgh, 2009. In the summit, our leaders proclaim that emission abatement of 26% in

Indonesia by 2020 is possible, with addition of 15% provided that developed countries are

also assisting our efforts. This statement, coupled with our presentation about Indonesia

National and Provincial Low Carbon Growth (www.dnpi.go.id) which shows that

environment friendly policies and regulations are enabler factor to economy growth has an

important bargaining point towards developed countries in international fora. In the future,

daring and careful emission abatement target and strategies will play an important role to

strengthen developing countries’ position in negotiation table.

In the light of our emission abatement target, government has shown its political

will through Presidential Regulation No. 61 2011 on The National Action Plan for

Greenhouse Gas Emissions Reduction. In this regulation, agricultural, forestry and peat

land, energy and transportation, industrial, and waste management are key sectors in

abating our emissions. The amount of abatement however, is differentiated in each sector,

with the biggest abatement is in forestry and peat land sector. This differentiation is

because 74% of our emission is produced from forestry—as well as land use and land use

change—and also from peat fire (MOE, 2010). Nonetheless, forests as the lungs of our

world still possess the potential to store carbon, thus the preservation of it is important.

REDD (Reduction of Emissions from Deforestation and Degradation) plan is proposed by

developing countries with high deforestation rate so as to mobilise capital from developed

countries in assisting developing countries to protect their forests from deforestation and

degradation. Then again, Indonesia come up with more general plan called REDD+, which

take into accounts efforts of forest conservation, sustainable forest management, and forest

carbon storage capacity improvement. Keeping the initiative like this one is of the essence

if Indonesia wants to become well known as mediator in hard negotiation talks about

climate.

The implementation of REDD plan in Indonesia is currently on going. Developed

countries has committed their capital to our REDD projects, with Norway and Australia

being the firsts. REDD projects in Indonesia is still in pilot project stage, and the first

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province to earn the pilot project is Central Kalimantan. In present moment, national

progress is in Readiness Phase (2009-2012), which precedes the full implementation phase

(starts in 2013). Most of progress in this phase consists of institutional reform and

development, database collections, and technical preparations (MOF, 2010). Our

opportunities as well as challenges lies on the initiative of our provincial government. The

agility of subnational government over national government is considered as an advantage;

therefore subnational governments in USA, Mexico, Brazil, Nigeria and Indonesia formed

the GCF (Governor’s Climate and Forest Task Force). Through this task force, each

subnational governor shares the progress of REDD projects in their province, and try to

solve it together. However, in our Indonesia, land tenure between provincial and national

government is still a problem for example in Central Kalimantan (WAC-ICRAF, 2011).

The development of effective FPIC (Free, Prior, and Informed Consent) instrument is also

essential in implementing REDD plan in our forest, due to the population size of

indigenous people which depends on it (NFC-UN REDD, 2011). These preparations

towards full implementation of REDD should be catalysed by strong political will from

government to combat the root problem of deforestation and degradation, as well as

protecting and empowering indigenous people in the process.

Energy and transportation sector, being the second largest pollution emitter, should

not be left unattended. Our fast economy growth, undoubtedly, will create more pollution

in energy and transportation sector. Therefore, initiative such as Green Paper of Climate

Change from Minister of Finance is a step forward in implementing green economy growth

in Indonesia. The essential ideas of this work are the utilisation of carbon tax/levy on fossil

fuel combustion coupled with access to international carbon market, the creation of new

broad-based carbon market mechanism, and the creation of RIM (Regional Incentive

Mechanism) (MF, 2009).

Aside from the Green Paper of Climate Change from Minister of Finance, the

government has also announced the 25/25 target, which states that in 2025, 25% of our

final energy use will be coming from renewable energy. This target is an important

indication of our political will in fighting carbon emissions by reducing our dependency

towards fossil fuel. Roadmaps of each renewable energy development have been made, and

overall target is currently on going. However, development of renewable will need more

capital investment, particularly in doing researches. Paradigm shift from supply side

management to demand side management though, is the key to reach our 25/25 target

(MEMR, 2010).

Global climate change is our reality in present time. In order to reduce global

pollution emission level is not an easy task, and will not be solved by only applying carbon

trading. It requires our commitment to mitigate, adapt, develop technologies, and invests in

environmental friendly policy (Salim, 2010). Indonesia as an archipelagic developing

country has committed to do its role in reducing emission, mainly through REDD

programme, Green Paper on Climate Change and 25/25 target. Nonetheless, developing

countries should not do this combat all alone. Developed countries have also the shares of

this problem, and thus have also to take active role in combating global climate change. Let

us embrace the principle of “common but differentiated responsibility” sensibly, to make

more concrete change towards better future for our grandchildren.

References: Salim, Emil. 2010. Ratusan Bangsa Merusak Satu Bumi. Kompas, Penerbit Buku: Jakarta

www.dnpi.go.id. Indonesia National and Provincial Low Carbon Growth. Access Date: 1st of January 2012

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Ministry of Environment, 2010. Indonesia Second National Communication Under The United Nations

Framework Convention on Climate Change. Ministry of Environment: Jakarta

Ministry of Forestry. 2010. Strategi REDD-Indonesia Fase Readiness (2009-2012) dan Progres

Implementasinya. Ministry of Forestry: Jakarta

World Agroforestry Centre – ICRAF. 2011. Local Perspective on REDD: In Comparison With Those At The

International Negotiation Tables And Their Representation in Quantitative Scenario Models. WAC – ICRAF:

Jakarta

NFC – UN REDD. 2011. Rekomendasi Kebijakan: Instrumen Free, Prior, Informed Consent (FPIC) Bagi

Masyarakat Adat dan Atau Masyarakat Lokal Yang Akan Terkena Dampak Dalam Aktivitas REDD+ di

Indonesia.

Ministry of Finance. 2009. Ministry of Finance Green Paper: Economic and Fiscal Policy Strategies for

Climate Change in In Indonesia. Ministry of Finance and Indonesia Australia Partnership: Jakarta

Ministry of Energy and Mineral Resources. 2010. Rancangan Blueprint: Pengembangan Energi Baru

Terbarukan dan Konservasi Energi. Ministry of Energy and Mineral Resources: Jakarta