The SMERU Research Institute is pleased to publish its fourth Annual Report to present an account of the wide range of activities carried out by the Institute in 2004 as well as its future direction. The year 2004 has been a significant milestone in SMERU's progress towards establishing itself as an independent research institute in Indonesia.

Over the years the Institute has broadened its horizon. Last year it initiated capacity building activities for NGOs and has been approached to enhance the capacity of various other stakeholders such as the Secretariat General of the Parliament (DPR), and other practitioners and policy makers. This indeed is a great opportunity for sharing, which is a guiding principle of the Institute. Its focus, however, remains firmly on quality policy research.

While SMERU continues to conduct research in its core areas of expertise such as poverty, regional autonomy and governance, in 2004 it has also conducted research on relatively less explored issues including micro credit and social capital. Several new issues such as HIV/AIDS and maternal mortality that are of crucial importance for the people of Indonesia will be the subject of SMERU's future research. the SMERU Director

SMERU will strive to maintain its focus on quality research, intensify its role in policy dialogue, and carry out its capacity building activities effectively. Balancing these activities in a planned and efficient manner remains one of the challenges before SMERU, which the Institute is committed to fulfilling. SMERU continues to be recognized by stakeholders and development partners who have shown immense confidence in SMERU. Our donors continued support has enabled SMERU to scale new heights in the field of applied social and economic research in Indonesia. I take this opportunity to acknowledge their contribution.

In 2004 SMERU has received requests from external funding agencies (apart from the regular donors) to conduct several research studies. This is a healthy sign that reflects confidence in SMERU's capability and is a small step towards its financial sustainability. All this has been possible because of the guidance provided by the Board of Governors as well as the dedicated efforts of our researchers, publication team and administrative staff. I convey my heartfelt gratitude and appreciation to all of them. Without them SMERU would not have been able to realize its vision.