Burhanuddin Abdullah: Opening the path to stability, safeguarding the
nation's economic development
Speech by Mr Burhanuddin Abdullah, Governor of Bank Indonesia, at the 2008 Annual
Bankers' Dinner, Jakarta, 18 January 2008.
* * *
Assalamu'alaikum wr.wb,
Good evening and may I wish you all a triumphant year ahead,
I. Introduction
To open my speech here today held in such salubrious settings, I would like to invite you all
to join me in expressing thanks and praise to God Almighty who has again blessed us with
the chance to congregate here for the 2008 Annual Bankers' Dinner. Taking advantage of
such a wonderful opportunity and on behalf of the Board of Governors of Bank Indonesia,
please allow me to wish you a very happy and prosperous year ahead in 2008. May you be
blessed in every step that you take.
Ladies and Gentlemen,
In distinction from previous years, tonight is an exceptional one for me. Tonight marks the
fifth time I stand here in the presence of you, distinguished ladies and gentlemen, to deliver
my annual address. The five years has flown by. Unsuspectingly, this year is the final year of
my tenure as the Governor of Bank Indonesia.
Together we have traveled far on our arduous journey. We have faced numerous trials and
tribulations one after another. Some brought immense satisfaction, while others yielded
grave disappointment. Together we have come to understand that the wide ranging and
compelling changes in the global and national constellation over the past ten years have
delivered new challenges in terms of managing national economic stability. Fluctuations and
uncertainty seem to be a constant that incessantly shadows us along with the prevailing
shifts and changes. Nevertheless, we should be grateful. Solid collaboration and close
coordination, based on common understanding, have become fundamental elements in
establishing and maintaining monetary, banking and payment system stability by Bank
Indonesia.
Therefore, prior to delivering the main substance of my annual address this evening, please
allow me to express my sincere appreciation to the banking community who has been so
incredibly supportive of Bank Indonesia's policy measures in terms of reinforcing and driving
the banking industry's performance in general. I would also like to offer praise and my
highest admiration to all elements of the Central and Local Government, the Parliament,
business community, academics, observers, the media and all other parties that I am,
unfortunately, unable to acknowledge individually, who have provided technical and strategic
support to Bank Indonesia in fulfilling its duties.
Ladies and Gentlemen,
It was ten years ago when our nation started to march towards the rise of a new democratic
community in Asia. It is from early this year we witness the rise of Indonesia as a new
economic star in Asia. We thank God that our beloved country has finally closed the final
chapter of the painful Asian crisis. We pray that, God willing, it is closed for good.
We have now entered a new era, one that will be better than the past. Early on we are
witness of several encouraging economic achievements. Our economy has started to gain
speed using both its engine - its stability engine and growth engine - It is no surprise that
many passengers aboard and bystanders outside are surprised by the acceleration taking
place. For the first time since the Asian Economic Crisis, economic growth in Indonesia has
surpassed 6% annually. Meanwhile, in the past five years, we have been witness to bold
macro economic developments despite the various encounters of hardships. The financial
system resilience and stability are now in much better shape than that of pre-crisis. We now
can make note that the national banking industry has withstood and even held back impacts
of significant shocks. We are thus able to say that stronger resilience is within our national
economy.
Ladies and Gentlemen,
The new Indonesia of the 21st century holds many hopes and opportunities. As such, the
eyes of the world are steadily focused on us as we take steps to our future. All that we have
achieved by deconstructing institutions of the past, and constructing new ones, and doing
this in the midst of a true democracy, is definitely not something to be given only light regard.
We have now become a reference for countries of the third world on how democracy and
positive achievements in the economy go hand in hand. Our country's history and
surrounding polity has never, until now, traveled this road before.
The early years following the 1945 Proclamation of Independence have actually seen
democratic life, as the one we see today. The period after the 1945 Proclamation of
Independence to the mid 1950's are penned in our national history as the time in which
political openness and democracy were part of this nation's everyday lives. A multiparty
political system was in close harmony with strong spirits of civility. Life within our nation then
was filled with dialogues, arguments on the nation's ideals, and exchange of thoughts
amongst first class intellectuals which were political elites revered for their wide horizons in
the era they were in. It was during this era that our Nation and its Founding Fathers were
Asia's ray of lights, which later scripted in gold as what sparked the Asia-Africa spirit.
However, we must admittedly write in our books that the period of openness, democracy,
and civility did not last long as there was a lack of seriousness in planning and implementing
economic development for the benefits of the society in general. Political freedom was
emphasized over economic development which resulted into a free, open, and democratic
country, but one with no real improvements towards the welfare of the people. This oversight
led us to the 1960's which was marked by the deterioration in nation's social, political, and
economic life.
It is during the next era that history writes about the positive dynamics of the New Order
development. From the end of the 1970s, we had been able to come closer to fulfilling our
promise of independence with the quality of life improvements and economic prosperity for
the people. In the next decade until the mid 1990s, the world was witness to the contributions
of Indonesia as one of the Tigers in Asia's economic-political arena. However, it was also
during the three decades of the New Order era that the urgency to develop open and
democratic political system was lost. This oversight eventually led us to a severe economic
and political crisis.
In that journey through our labyrinth of collective memory, we find many contradictions
regarding who should take role as captain of our nation ship. "The economy as captain or
politics as captain" is the coffee shop debate that has kept us amused for some time.
However, something very different has arisen in the last five years. In our minds and hearts,
we perceive a fundamental change in the life in our nation-state which represents a break
from the past.
The difference lies in the fact that, over the last five years, there has been a consolidation of
political life in a free and open democracy taking place alongside an increasingly solid
economic consolidation. On one side we are once again living in a free and open democratic
society. We have also implemented regional autonomy and economic decentralization. We
have elected the president and head of regions through direct election, while the press
enjoys greater freedom and is maturing at noticeable pace. Alongside, the economy
continues to grow while economic stability is maintained. We even have formulated and
implemented economic policies without the guidance and interference of foreign parties,
such as the IMF, whose interest often lie incongruously with that of the people of Indonesia.
The period we were in IMF's Extended Fund Facility until the completion of the Post-Program
Monitoring represents a trying time in our nation's history. During that era, we were not able
to formulate and implement adjustment policies with a scope and pace which were in
complete agreement with the interests of and needs of the Indonesian people. Many
compromises were demanded and many of them did not fully benefit our nation's interest,
but rather, only the interest of various other parties. The hand below is never the hand of
dignity. Never again do we to live in an era in which our people and nation-state were
reduced in dignity. Democracy, openness, freedom, and the courage for sovereignty in public
policy have made us become our true selves, with many opportunities to achieve prosperity
for all Indonesians. This brings proof of validity to what our Founding Fathers have believed
in all along. We must always maintain the right view and attitude in fulfilling the promise of
freedom and independence - something for which our Founding Fathers have fought dearly.
Admittedly, if we only look at the figures, at this point, what we have achieved is far from
dramatic. However, behind such developments emerge a strategic shift. We have gradually
strengthened our state institutions, which has enabled us to take continuous steps forward
towards more sustainable improvements, and thus reducing ad-hoc actions. Various
institutions, Bank Indonesia included, have taken gradual steps towards improvements,
which will then continue to take place in all essential fields. In almost the same context with
Muhammad Hatta's view regarding Indonesia's 1945 Revolution, our ability to put democracy
parallel with prosperity becomes "a link of a long chain of fundamental and significant
changes" in the life of people in other developing countries in Asia and Africa in the future.
Therefore, we should be uplifted by such an extraordinary achievement; one that was
achieved by our own initiatives and hard work. We are also thankful to God for giving us such
a rare opportunity. As one of only a handful of democratic developing economies and one of
the largest republic in Asia, it is appropriate that in the future we continue to strive towards
further identifying our strengths and abilities to autonomously determine our own choices and
take unerring decisions in the interest of our nation. It has been our belief since the 1945
Proclamation of Independence that the sustainability of the Republic will be better
guaranteed if democracy is upheld. Such was the case during the past five years.
It also befalls on us to use the success thus far achieved as priceless capital to prepare our
future steps and answer the challenges of the 21st century. Founding Fathers of this nation,
Sutan Sjahrir, Soekarno and Muhammad Hatta, once said that the independence of
Indonesia as a nation-state in 1945 is but a vehicle to achieve the independence of the
people of Indonesia. However, 62 years after the 1945 Proclamation of Independence, a
great many of the people find themselves longing for an order which allows them to gain their
independence. Such would be from a nation-state which provides prosperity and educates
the majority, and not minority, of the people. Such longing is our biggest challenge and is
also a call of history to us all.
Ladies and Gentlemen,
For me personally, my journey in leading Bank Indonesia, a state institution mandated by the
public to maintain national economic stability, is an extremely precious experience. The
experience has bestowed upon me a deeper understanding of our economic dynamics,
current and upcoming challenges and opportunities, as well as the means to accomplish the
aspirations of the general public, namely improved welfare for all Indonesians. And of course
as a citizen of this great nation myself, the mandate has also provided great honor and
opportunity for me to pay homage to our nation and all Indonesians.
This evening, the time has come for me to reflect on what Bank Indonesia has achieved in
my five years of leadership. It would not be excessive to say that I would like to make this a
part of my moral responsibility to the stakeholders of Bank Indonesia. Tonight, I will also
present views regarding the economic prospects and challenges to be faced over the next
five years and their implications on Bank Indonesia. I genuinely hope that the future
perspective I plan to present here this evening can serve as a contribution for us all in
determining some common measures to achieve a better national economic future.
The theme of my oration this evening is "Opening the Path to Stability, Safeguarding the
Nation's Economic Development". As for the systematic of my presentation, at the
beginning I would like to reopen pages of my work log and take you all on the journey of
Bank Indonesia in fulfilling its constitutional mission over the last five years. Some of the
questions my comments are based upon include: What policy initiatives have been adopted
and what are their considering factors? How far has progress been achieved in its
implementation? What has it contributed to the overall process of economic growth in the
post crisis era?
In the subsequent part, I would like to address future economic prospects and challenges, as
well as measures that need to be taken by Bank Indonesia to ensure that the institution
remains an integral part of the solution to the nation's economic woes. Several of the
challenges are not totally new since they have persisted for some time and continue to
persist to this day. In the future, however, such challenges could intensify further, and
therefore the urgency of our preparedness will become critical.
Finally, prior to concluding my address here this evening, I would like to present some views
on possible follow-up measures and policies that I believe need to be taken over the next five
years; giving 2008 new momentum for the establishment of Bank Indonesia that is more
relevant for the prosperity of all Indonesians.
II. A recap of Bank Indonesia task implementation 2003-2007
1. National economic achievements
Ladies and Gentlemen,
At the beginning of 2007 we had restored macroeconomic stability following the global oil
price hikes towards the end of 2005 and minimized their effects on the exchange rate,
inflation and interest rate up to mid 2006. Then, you may recall, on this very same occasion
last year, I likened our economic condition in 2006 to an airplane flying on just a single
engine. On one side we had succeeded in restoring macroeconomic conditions back on
track. However, due to intricate micro and structural challenges in the economy, the pace
and quality of economic growth was still below expectations. Furthermore, productive
business activity in the real sector was quite sluggish.
At the beginning of 2008, we should all be grateful for closing 2007 behind satisfactory
accomplishments as evident by primary economic indicators (Table 1). As such, maintaining
our airplane analogy, our economic airplane has started to soar with both engines running.
Consequently, it should not be completely unexpected that many of its passengers are
shocked by the new found acceleration.
Allow me to briefly present several salient economic achievements up to the end of 2007.
Regarding economic growth, for the first time since the Asian Economic Crisis, economic
growth in Indonesia has surpassed 6% annually, reaching 6.3% in 2007. The growth is
characterized by a balance between demand and supply, as reflected by the resilience of
consumption expenditure followed by favorable growth in investment. The realization of
Gross Fixed Capital Formation (GFCF) through 2007 increased by 8.37%, while private
investment grew 7.18% from last year's level. Such growth caused the investment to GDP
ratio to rise from 19.5% in 2003 to 23% in 2007. Widespread diversification is also evident in
the economy. Therefore, despite a manufacturing sector that has not yet fully recovered,
many other sectors have developed and consequently supported wealth creation in our
economy throughout 2007. Such diversification is verified by expansion in the mining, trade,
telecommunications, transportation, utilities, construction and services sectors. All the
improvements gained in the real sector have provided strong initial indications that structural
constraints stemming from the microeconomic side (supply side constraints) are improving.
Table 1.
Main Economic Indicators
Indicators 2002 2003 2004 2005 2006 2007*
Macro
GDP (% - yoy) 4.38 4.72 5.03 5.68 5.48 6.3
Inflation (% - yoy) 10.03 5.06 6.40 17.11 6.60 6.59
External
Export (Billion USD) 59,165 64,109 70,767 86,995 103,514 118,937
Import (Billion USD) 35,652 39,546 50,615 69,462 73,868 86,354
Debt to GDP ratio (%) 65,71 57,01 53,40 45,12 35,28 31,3
Foreign Reserve (Billion USD) 32,039 36,296 36,320 34,724 42,586 56,900
Exchange Rate 8.950 8.570 8.948 9.713 9.167 9.140
Government Finance
Revenue (Billion Rp) 298,605 341,396 403,367 495,224 637,796
Spending (Billion Rp) 322,180 376,505 427,177 509,632 670,591
Budget Deficit/Surplus (%of GDP) -1.3 -1.7 -1.0 -0.5 -1.0 -1.1
Financial Market
Yield Global SUN (%)** 6.08 4.72 3.71 4.92 5.93 5.89
JSX Index 425 692 1,000 1,163 1,806 2,746
Net:
* Position as of December (estimation)
**Since 2006 using global bond due in 2014
Externally, the Indonesian balance of payments (BoP) has run a surplus for four years
consecutively. At the end of 2007, the BoP surplus was 3.1% of GDP, giving a surplus for the
past three years of 2.4% of GDP. Net capital inflows to the financial markets, direct capital
investment, net exports, and the net remittance from Indonesian migrant workers have all
contributed to positive BoP performance. In this respect we can observe that Indonesian non
oil and gas exports remained high amidst a slowing global economy. This shows that the
destination countries for our exports have become more diversified, negating some of the
adverse effects of the economic slowdown in developed countries, which has also been
compensated by exports to countries with high economic growth such as China and India.
Impressive BoP performance over the past four years has provided room for us to fund
development activities, service our foreign debt without triggering significant fluctuations in
the foreign exchange market, strengthen our position through additional foreign exchange
reserves, and most importantly, through the contribution of net remittance inflows from
migrant workers, the resilience of domestic demand in the national economy has been
maintained. Regarding foreign exchanges reserves, I would like to announce that by the end
of 2007, our foreign exchange reserves had reached USD 56.9 billion; equal to 5.7 months of
imports and servicing of the government's foreign debt.
Strong BoP performance has also provided the opportunity for us to expedite servicing the
debt to IMF in 2006. This was taken through careful calculations in the spirit of public policy
independence and confidence in future economic performance. Payments due over the next
3.5 years were serviced on 12th October 2006. Consequently, Indonesia no longer has to
comply with the programs in the IMF Letter of Intent. Although debt repayments to IMF were
finalized, financial market conditions remain stable and foreign exchange reserves have
continued to grow.
More balanced economic growth, a balance of payments surplus, and a healthy foreign
exchange reserve position have largely assisted efforts to preserve rupiah stability,
especially over the mid to long term. Over the past five years, with the exception of 2005
which was marked by severe global oil price hikes, headline inflation, measured by the
Consumer Price Index, and core inflation recorded 6.19% and 6.28% annually, compared to
an annual average during the pre-crisis era of 8.21% and 9.13% respectively.
Meanwhile, ignoring exchange rate fluctuations in 2005, the rupiah exchange rate in the past
five years appears to have been well maintained within a range conducive to maintaining the
internal and external balance of our macro economy. Furthermore, rupiah exchange volatility
is currently far below that of the early years following the crisis. Overall, this provides greater
certainty to business players in the real and the financial sector regarding the average
exchange rate in the long run. Therefore, I would like to state that the positive developments
occurring in the inflation and exchange rates have subsequently supported the management
of expectations regarding macroeconomic stability and underpinned the competitiveness of
exports in the mid to long term .
If we observe the progress made by banks, at least since the beginning of 2004, it would be
a fair assessment to assert that the current growth in banking indicators is satisfactory (Table
2). Growth in total bank assets has increased sharply by 60%, from Rp737.85 trillion (63.7%)
to Rp1,895 trillion in November 2007. Meanwhile, credit has expanded by Rp529.6 trillion;
more than twice its level in 2004 to Rp1,004.6 trillion at the end of last year. The expansion in
credit extension was supported by a rise in deposits by Rp551 trillion or 62% compared to its
level in 2004 and thereby making the level of deposits Rp1,437.5 trillion in November 2007.
Table 2.
Perkembangan Indikator Utama Perbankan
Indicators Dec 2002 Dec 2003 Dec 2004 Dec 2005 Dec 2006 Nov 2007
Credit (T Rp) 410.3 477.2 595.1 730.2 832.9 1.004.6
Third Party Deposits (T Rp) 835.8 888.6 963.1 1,127.9 1,287.0 1,437.5
NPL Gross (%) 8.1 8.2 5.8 8.3 7.0 5.4
NPL Nett (%) 2.1 3.0 1.7 4.8 3.6 2.3
Interest (Work. Cap.) (%)* 18.3 15.1 13.4 16.2 15.1 13.2
Interest (Investment) (%) * 17.8 15.7 14.1 15.7 15.1 13.3
Interest (Consumption) (%)* 20.2 18.7 16.6 16.8 17.6 16.3
Number of Banks** 138.0 133.0 131.0 130.0 128.0
*) As of October 2007
**) As of the above date there are 16 banks with capital below Rp. 80 bill.
Throughout 2007, supported by a decline in the BI rate along with macroeconomic stability,
credit grew according to the targets set by banks at the beginning of the year and recorded
growth of 24.3%. The recent noteworthy credit growth indicates that banks have returned to
contributing significantly to the funding of overall national development.
One aspect that requires attention in regards to bank performance up to the end of 2007 is
that bank stability in the post-crisis era already far exceeds that of the pre-crisis era.
Nowadays, the majority of banks maintain their capital adequacy at a high level, with an
average CAR in the range of 19.5%. Total assets have experienced a substantial increase of
11.9% to Rp1,845 trillion. Regarding profitability, bank ROA has risen from 2.6% to 2.8%,
which generally stems from improvements in the efficiency of operational banking activities.
Meanwhile, bank NPL has performed satisfactorily, improving from 6.98% (gross) and 3.63%
(net) to 5.41% and 2.29% respectively. This is primarily attributable to the implementation of
government legislation, namely PP No. 33, 2006, by government-owned banks. Moreover,
banks have also been able to absorb the numerous substantial fluctuations in the economy
such as oil price hikes and their follow-through effects on the exchange rate, inflation and the
interest rate, as well as the contagion effects of the subprime mortgage crisis in the US. This
resilience is tightly enshrined in our ever improving bank risk management capability and
prudential principles that are strictly enforced throughout the national banking industry.
Ladies and Gentlemen,
Maintained macroeconomic stability coupled with a sounder and more resilient banking
industry has restored investor confidence regarding the future prospects of the Indonesian
economy. This is strongly reflected by the improvement in Indonesia's rating awarded by
international ratings agencies. Currently Indonesia is approaching investment grade and
closing in on the pre-crisis level (Graph 1). Notwithstanding, along with strong corporate
profits and positive future expectations, investor confidence is also high due to the resurgent
global excess liquidity inflows to Indonesian financial markets, making the JSX Composite
one of the best performing indices in the world (Graph 2). Several sub-sectors that support
the improvement of the JSX Composite confirm the existence of diversification in the sources
of wealth creation in the economy.
Graph 2.
Graph 1.
JSX Indices
Rating of Indonesia
The above achievements will surely come as some relief to many as they endured amidst
many trials and fluctuations stemming from domestic issues such as the natural disasters
that struck one after the other, and globally from oil price fluctuations and the subprime
mortgage crisis. It is therefore understandable if we then declare that our national macro
economy is sufficiently resilient to face unpredictable fluctuations.
Graph 3.
Fiscal Consolidation
We can also observe that such achievements represent the fruits of collaboration amongst all
elements of public policymakers in espousing national economic recovery. Policy aimed
towards fiscal consolidation during the early post-crisis era followed by a more expansive
fiscal policy over the past two years has stimulated economic activity without triggering price
or exchange rate instability, thus preserving economic expansion. The fiscal authority has
also succeeded in periodically trimming the foreign debt liability, from above 100% at the
beginning of the crisis, to around 35% in 2007. This will further strengthen the prospects of
future fiscal sustainability (Graph 3). Furthermore, with respect to fiscal resilience, the policy
to reduce fuel subsidies in line with oil price fluctuations in 2005 represent concrete steps to
further reinforce our fiscal posture over the mid to long term. Such policy has also helped
reduce uncertainty in the foreign exchange market in response to oil price hikes at the end of
2007.
As regards policies relating to the improvement of social indicators and the investment
climate, we have also witnessed some gratifying developments. The drop in abject poverty is
something we can all be pleased about. The poverty rate, measured by the percentage of
people living below the poverty line, dropped from 17.75% in 2006 to 16.6% in 2007; a
decline in absolute terms of 1.88 million people. The progress of the program to end poverty
is supported, in many aspects, by the increase in economic growth and macroeconomic
stability. No less important are the social programs implemented to assist the underprivileged
to survive amidst fluctuations and natural disasters.
The decline in poverty has improved the achievement indicators of Indonesia's Millennium
Development Goals (MDGs). Of the eight MDGs, Indonesia managed to record its most
progress in the program to end poverty. A World Bank report (November 2007) states that
the percentage of the population living on an income of less than US$1 per day is 8.5% lower
than the 2015 MDG target, namely 10.3%. Other MDG indicators have also shown
improvements, as illustrated by the high number of students enrolled in primary education;
the low child mortality rate of under-5 year olds; and significantly improved public access to
clean water. In addition, the World Bank noted that in nearly all aspects, the achievement of
MDGs in Indonesia has progressed according to appropriate targets.
To promote investment activity incentives, the government has also strived to improve the
investment climate through the issuance of an integrated economic policy package (Inpres
No. 6 - July 2007) which covers the renewal of three previous packages, namely the
investment improvement package, the infrastructure acceleration package, as well as the
financial sector reform and small medium enterprise (SME) sector empowerment policy
package. In improving investment, the new policy package also includes government
legislation concerning the implementation of capital investment and reducing the time taken
to process investment permit applications in Indonesia. Meanwhile, in terms of infrastructure,
banks have actively participated in providing funding access. This has been supported by a
credit insurance program and an investment scheme through a Public Private Partnership
(PPP) mechanism.
Relating to the domestic investment climate I have already mentioned, we have also seen
satisfactory achievements towards regional autonomy. Currently, a group of progressive
regional governments have arisen whose regional development performance exceeds that of
others. These success stories are demonstrated through the ability of the bureaucracy in
progressive areas to unfurl the benefits to all people in the regions. A survey conducted by
The Committee for the Monitoring of Regional Autonomy Implementation (KPPOD) indicates
that important achievements in progressive areas are tightly related to improvements in the
national investment climate, such as the rising human development index, better service
efficiency and quality from the regional governments, completion of infrastructure networks,
and improved governance in the government. These all represent positive developments in
terms of addressing the supply side constraints in our economy over the long run. We now
have a far greater hope that in the future, given the support of all elements, a critical mass of
progressive regional governments can be achieved, and thus resulting in a faster paced
economic growth that is higher in quality and better balanced.
2. Contribution of the financial sector
2.1. Strengthening the three pillars of stability
Ladies and Gentlemen,
Numerous achievements in 2007, in relation to economic performance as a whole and the
advancement of several public policies, have been undertaken collaboratively by all
policymakers. Such collaboration has also been actively supported by the diligence of all
economic players in the business community and by the general public. I would also like to
reiterate that we should be pleased of these achievements since many policies to catalyze
economic growth over the past five years have been taken amidst a free democracy and
policy independence.
With the same pride and faith in national faculty to live in an autonomous polity, I would like
to acknowledge that public policymakers in the financial sector and all business players in
their respective industries have provided tangible contributions in encouraging public policy
independence, and furthermore Bank Indonesia welcomes each and every current economic
achievement.
Like other public policy-making institutions, Bank Indonesia has its own niche in public policy
continuum in the country. Bank Indonesia is one of the primary institutions that provide the
three pillars of stability which support and represent the elements of continuity for sustainable
economic development. The three pillars of stability include: (a) stability of the rupiah value;
(b) a healthy and resilient financial industry to support financial system stability; and (c) a
modern and efficient payment system to support economic transactions. Mirroring
humankind's need for air to breathe, the presence of the three pillars of stability is in constant
demand, and hence appropriate for the People to underline them as the constitutional
mandate of Bank Indonesia through legislation for the central bank ratified by the Parliament.
Looking back at Bank Indonesia's tumultuous journey over the past five years, I feel
confident to announce that efforts to meet the various aspirations set forth in the mandate
have yielded significant results, which have maintained the momentum of sustainable
national economic development and improved its future prospects. The results have been
obtained in the spirit of autonomous policy making in line with the interest of our economy as
a whole, and without interference from foreign parties. For that reason I would like to take
this opportunity to extend my sincere appreciation to all my staff at Bank Indonesia who, over
the last five years, have given their all and shown exceptional quality as first-rate
professionals, thinking independently and consistently taking decisions that prioritize our
nation's interests.
Ladies and Gentlemen,
A key achievement for our economy in the past five years has been the availability of a more
stable national financial system, compared to the pre-crisis period, that supports economic
resilience. The stability of the financial system is evidenced by the fact that our financial
system is clearly better prepared to resist and absorb the numerous shocks arising from both
the global and/or domestic economy. In addition, the national financial system has shown
greater efficiency and effectiveness in allocating funds through intermediation and risk
management, and continued to expand its role in sup