On behalf of the SMERU Research Institute, I gladly present to you our Annual Report 2006. The content of this Annual Report speaks for itself—from SMERU’s active role, as described in the research and program highlights, to its achievements, as measured by a range of indicators. It is clear that the Institute is continuing to play a vital part in working together with all Indonesians to address poverty through high quality and independent research.

We continue our endeavors to achieve our goals through the diligent pursuit of our vision statement, which emphasizes our key objectives: communicating our research findings to our stakeholders; developing our research capacity through improved staff and institutional resource, and the expansion of institutional linkages; and working towards our long-term financial sustainability.

SMERU has also continued to broaden and deepen our engagement with our stakeholders. The Institute’s relevance to government agencies was evident in our involvement with the calculation of the 2006 poverty rate, where the government invited SMERU to become an independent reviewer of the process. The Institute’s role in the evaluation of the cash transfer and school operation assistance programs and our involvement in discussions on labor and employment issues have demonstrated our credibility across a spectrum of government departments.

Furthermore, civil society organizations and academic circles have acknowledged SMERU’s expertise. SMERU’s researchers have been invited to present their studies and participate in academic discussions—both in Indonesia and abroad. SMERU maintains its commitment to continue bridging research and policy by actively communicating its research results to stakeholders through workshops, training sessions, consultations, and publications. This year SMERU has involved several local governments in its research. The Community-Based Monitoring System (CBMS) study involved the governments of Kabupaten Cianjur and Demak, while the Capacity Development of Local Government through Developing Participatory Poverty Assessment (PPA) study involved the governments of Kabupaten Bima and Tapanuli Tengah.

Throughout the year, it became evident that the Institute is working in an increasingly challenging financial environment. We have taken immediate steps to confront these issues, in line with the recent independent review of SMERU conducted by AusAID. We will strive to develop our medium-term research agenda, whilst at the same time maintaining and improving our research capacity and actively seeking the means for improving our long-term financial sustainability. The latter is indeed difficult and challenging, but we hope to maintain the confidence of our donors. In addition, we will actively seek project-based funding for research activities that are in line with our research priorities.

I would like to take this opportunity to extend my great appreciation to all our donors, partners, and other stakeholders for their continuous confidence and support to SMERU. I also wish to thank SMERU’s Board of Governors and the Advisory Board for their constant support and advice. Last but not least, my appreciation goes to SMERU’s research, administrative, and publications staff for their commitment and dedication in making SMERU among one of the respected and credible research institutes in Indonesia today. Continued progress towards our vision requires solid teamwork on the part of all SMERU staff. Without the assistance and support from all of you, SMERU would not have been able to traverse the numerous challenges that it has encountered during the past few years. I am extremely proud of the way we have continually performed hand-in-hand to maintain the high standard of our research.

To all our friends, rest assured that with great dedication and vigor, SMERU will continue to uphold our commitment to making a difference in Indonesia through high-quality and independent research.