Distinguished Guests,
        Ladies and Gentlemen,

I wish to start by thanking CHAMP Private Equity and Asian Venture Forum - Australia for inviting me to this very important gathering.

I am indeed happy to be able to speak before this forum on 'Indonesia in 2005', attended by many who help shape Australia's economic and political landscape and Australia's engagement with Southeast Asia, Indonesia in particular, for two obvious reasons.

First of all, I am happy that I can speak with more confidence and optimism about the direction my country is taking. I may not have had such confidence and optimism if it were not for the encouraging results of last year's elections. The elections have paved the way for the creation of a much stronger government that has based itself on the tenets of democracy. It is to be noted that Indonesia's decision to embark upon democracy has been genuinely taken by its people, not imposed by outside powers. I therefore strongly believe that Indonesia is on the right track to excel towards a more vigorous democracy and a more prosperous nation. This view is shared by many of my countrymen, and probably a healthy number of foreigners as well.

You are experts and managers of economic and financial matters. You know how wealth is generated, circulated, and disbursed. You understand the importance of 'confidence' in the behavior of producers, consumers, and money managers. I am not an economist by education or by profession, but I have observed during my recent visits to Indonesia that the mood is very upbeat; malls are packed, restaurants are full, streets are more congested, while banks, airports and train stations have longer queues. From my various interactions back home, I came to the conclusion that Indonesians are not only talking about the future; they are planning for it.

The World Bank said last month: 'With the cyclical upturn in its economy - driven by accelerated growth, macroeconomic and political stability - market confidence has hit a post crisis high.' It went on to say: 'Indonesia needs to focus on fundamental reforms to the investment climate, continued improvements to governance and urgent attention to infrastructure.' You will see that we are heeding its call, indeed, to louder calls from the Indonesian people.

Indonesia's buoyant mood is caused by the successful holding of elections and, more specifically, the people's confidence in the incumbent presidency. This brings me to the second reason why I am pleased to speak before you today. President Susilo Bambang Yudhoyono has promised Indonesians that he will bring about 'change', but not change for the sake of change; rather, he intends to make sure that change be given direction, that change have a target and a plan, and that change have relevance to the lives of the people. Indonesians are optimistic that they can ride on the coming waves of change.

Distinguished Guests,
        Ladies and Gentlemen,

The most important and fundamental development in recent Indonesian history was the reordering of Indonesia's political house. Indonesia has passed through the most difficult period in its transition to a fully fledged democratic state. The 1945 Constitution had been amended by the People's Consultative Assembly and now we are witnessing how it works.

As you may be aware, Indonesia held three nation-wide elections last year, an enormous and extremely complex undertaking in a nation of over 220 million people, and yet they were conducted peacefully and skillfully.

The election of Dr. Susilo Bambang Yudhoyono in a landslide victory in our first direct presidential elections increased significantly the probability of Indonesia forming an effective and delivering government. The election strengthened our presidential system, while our parliament remains critical, thus ensuring a healthier system of checks-and-balances. Being elected directly by the people, President Susilo Bambang Yudhoyono has the legitimacy to deal with Indonesia's myriad of problems. And, I believe that he will use it wisely and judiciously.

Better still, he is assisted by a vice president who has a sound and solid knowledge in managing businesses. Indeed, Vice President Jusuf Kalla has been one among those successful businessmen before being involved in our domestic politics.

Distinguished Guests,
        Ladies and Gentlemen,

To follow up the reform agenda, last month, President Yudhoyono issued Presidential Directive Number 7/2005 on Indonesia's Medium Term Development Plan for 2005 - 2009, consisting of the following elements: firstly, it focuses on re-building and strengthening policy institutions rather than simply physical targets. The social sector and the political agenda are as important as the economic agenda; and, secondly, it seeks to shift the boundaries of government - society relations to reflect increasing demands from the community for the consolidation of political and economic reforms.

This presidential directive embodies the President's vision of an Indonesia that is safe, just and prosperous which was then translated into three main agendas.

The first agenda focuses on creating a safe and peaceful Indonesia, addressing issues such as crime, including transnational crime, as well as sectarian and regional conflicts;

The second agenda focuses on the consolidation of political and legal reforms, the rebuilding of modern institutions, and good governance. This agenda also involves reforming the legal sector, improving public services, and rectifying implementation weaknesses with decentralisation; and,

The third agenda focuses on improving the welfare of Indonesians. The role of the government includes improving the accessibility, equity, and quality of basic social services, including education, health and family planning, and community services for the poor and vulnerable.

Distinguished Guests,
        Ladies and Gentlemen,

Indonesia is the last country among those affected by the 1997 Asian Financial Crisis to return to normalcy. But the Indonesian economy is finally leaving the financial crisis behind, and a number of indicators point to this. I trust that you have easy and immediate access to Indonesia's economic indicators, and therefore I shall not elaborate too much on them. But let me pinpoint some of our recent achievements:

The Indonesian government is aiming at accelerating economic growth from 4.5 percent in 2003 to 7.2 percent by 2009, or an average of 6.6 percent annually for the next five years. We aim to decrease the unemployment rate from 9.5 percent in 2003 to 5.1 percent in 2009. We aim to reduce the poverty rate from 16.6 percent in 2004 to 8.2 percent in 2009. We are confident that these figures are achievable because economic and development activities will be placed on a stronger and more stable footing in terms of the political, social and justice systems.

Distinguished Guests,
        Ladies and Gentlemen,

Whilst we are optimistic, we are also fully aware of the difficulties it may entail. As we took stock of our situation, our resources and our shortcomings, one glaring problem emerged: lack of infrastructure development in recent years. Therefore, the President decided that one of the answers to our economic future is to get more investments in infrastructure.

Because of the financial limitations of the government, and because the government will mainly function as regulator and facilitator, our efforts to mobilize new investments in infrastructure is increasingly relying on the participation of the private sector, both domestic and international.

Bearing these in mind, the Indonesian government decided to hold the 'Infrastructure Summit 2005' last month in Jakarta. It was attended by over 600 representatives of various corporations, governments, banks, chambers of commerce, international organizations from 22 countries. I understand that there was a waiting list of around 500 names, for the venue simply could not accommodate all of those wishing to participate.

Prime Minister John Howard lent his strong support to the summit. As he promised President Susilo Bambang Yudhoyono when they met in Chile last November, Prime Minister Howard wrote to CEOs of major Australian companies to encourage them to participate in the summit.

My government is fully cognizant of the concerns of domestic and foreign investors when investing in Indonesia, and for this reason is taking policy initiatives to strengthen private participation in infrastructure development. It will work to reduce uncertainties by strengthening the framework to guarantee the private sector's interest. It will adopt policies that will reduce regulatory obstacles and facilitate fair competition. And, it will also establish reliable procedure and institutional setup for price determination.

As the Minister of State for National Development Planning told the participants of the Infrastructure Summit: 'We want to make infrastructure investments in Indonesia so secure and profitable that you will want to invest your pension funds in it.'

For more information, I invite you to visit the Summit's website at www.iisummit2005.com. There you will find Indonesia's infrastructure roadmap published by the National Development Planning Agency. You will also find sites on Indonesia's infrastructure projects and laws on infrastructure development.

Distinguished Guests,
        Ladies and Gentlemen,

Turning to bilateral relations, my outlook for 2005 is equally optimistic. We have left many of our troubles behind, and we are building new bridges. Opinions and statements about Australia emanating from Jakarta have been mostly positive and, vice versa. In two weeks time, we will have the Seventh Indonesia - Australia Ministerial Forum, and we are looking forward to President Susilo Bambang Yudhoyono's visit to Australia in the near future in an attempt to further solidify our bilateral ties.

It is interesting however to note that the recent improvements of Indonesia - Australia bilateral relations were apparently achieved not by design but basically by default or dictated by divine intervention through tragedies, such as terrorist attacks and natural disasters. Therefore, I have called for bilateral relations to be put on a more stable footing, based on well-drafted policies geared to smoothen and strengthen relations, although we should always expect differences to come up from time to time.

In the last four months, President Susilo Bambang Yudhoyono and Prime Minister John Howard have met three times and spoke over the phone at least twice. When President Yudhoyono sent his Special Envoy on money laundering to Canberra earlier this month, the first message he conveyed to the Prime Minister and other members of the cabinet was his gratitude to the Australian government and people for their generosity in helping the victims of the Boxing Day Tsunami. He vowed that his government would make sure that all the assistance, resources and manpower to help the devastated areas are deployed in a coordinated, transparent, and coherent manner.

Bilateral trade stands at close to $5 billion US dollars. The balance of trade is in Indonesia's favor at US$ 273 million. Currently, Australia is Indonesia's eighth largest market and sixth largest source of imports. This is not the most encouraging numbers, being close neighbors, but at the same time it shows that we have much room to expand trade relations. Australia's robust economy and Indonesia's accelerating economy have many areas to link up.

Now we have, at the government-to-government level, a new mechanism for cooperation: The Australia - Indonesia Partnership for Reconstruction and Development (AIPRD). As you know, Prime Minister John Howard initiated the idea right after the earthquake and following tsunamis on Boxing Day that totally devastated Aceh and North Sumatera. The Partnership is chaired by the President and the Prime Minister and equipped with a joint commission of their foreign and economic ministers. The Partnership will oversee the utilisation of Australia's grant and concessional loans of $1 billion over the next five years. This is in addition to the projected $800 million assistance in this period. I encourage all of you to look into possible opportunities in this endeavour. On March 17 - 18, ministers from both countries are going to meet in Canberra for the Ministerial Forum during which the Partnership's program will also be discussed.

Distinguished Guests,
        Ladies and Gentlemen,

On the regional front, Indonesia supports Australia's closer integration with Southeast and East Asia for obvious reasons. Geography dictates that Indonesia and Australia should work together to confront common threats. We believe that closer Indonesia - Australia cooperation will help bring greater political stability and economic prosperity to the region as a whole.

This conviction has led Indonesia to support Australia's closer integration into the regional networks. It is indeed in the vital interests of Indonesia to constructively engage Australia, for politically it may serve as the strategic bridging brick between a western-based civilization of Australia with an eastern-based civilization of Southeast Asian countries whilst economically this may prove to be the key to the survival of both parties.

From the economic standpoint, ASEAN is also very important for Australia. Looking at some of the figures, the ten countries of ASEAN have a combined population of around 550 million; a total GDP at around US$ 682 billion, and an annual growth rate of roughly 6% in real terms for at least the last two years. ASEAN is a major market for Australian exporters, accounting for 11 per cent of Australia's total exports as well as an important destination for ASEAN tourists and students. In 2003 - 2004, the value of Australia's total imports from ASEAN countries reached nearly A$ 26 billion. Australia's total exports to ASEAN totaled roughly A$ 18 billion.

The ASEAN - Australia and New Zealand Free Trade Area offers a golden opportunity for Australia to further economically excel together with countries in the region. Negotiations for this treaty, which was announced last November at the ASEAN - Australia and New Zealand Commemorative Summit, have begun and should yield an agreement in two years time.

Distinguished Guests,
        Ladies and Gentlemen,

To conclude please allow me to quote a Singaporean economist who recently told The New York Times: 'Indonesia is back on the map.' I leave it to you to agree or differ, but I am absolutely sure that Indonesia with all its potentials has been and will always be a source of prosperity and stability for the region. We shall therefore jointly endeavor to unleash these potentials to the fullest for the benefit of our region and beyond.

Thank you.