The year 2008 was marked by global commodity price shocks that negatively affected the economic life of the poor and vulnerable in Indonesia. For The SMERU Research Institute, this has led to more challenges. For eight years we have witnessed SMERU continue to strive to overcome the challenges it faces. Looking back over the first annual report in 2001 and its successive reports, including this most recent one, it is possible to trace SMERU’s progress, achievements, and growth. In 2008, SMERU completed some studies that were used as input for policy deliberations, such as the study on the Specific Allocation Fund (DAK). Based on its findings, SMERU recommended that a new mechanism be created in which the central government decentralizes the authority for the allocation, coordination, and monitoring of kabupaten/kota (district/city) uses of DAK to provincial governments. Also in 2008, some of the indicators SMERU suggested were included in the second draft of BPS’s document “Social Protection Program Data Collection Survey 2008 (PPLS 2008)”, which will be used as the basis for targeted government social programs in the future.

As the world is facing one of the most severe financial crises of the last century, SMERU’s skills and dedication cannot be overlooked. SMERU was heavily involved in discussions with high-ranking government officials and donors about finding ways to mitigate the impact of the global financial crisis. SMERU has been working on a recent initiative to monitor the socioeconomic impact of the crisis in Indonesia, focusing on employment, basic commodities, farmers’ livelihoods, health, education, and social welfare.

SMERU has created its own niche in the research areas of poverty, social protection, labor markets, and other socioeconomic issues. SMERU has strengthened and streamlined its research by developing a medium-term research plan, as well as a strategic plan. SMERU has also endeavored to develop effective strategies to bridge the gap between research and policy and promote a culture of evidence-based policy making. I encourage you to look through the following pages in order to gain a better understanding of the issues. These achievements would not have been possible without the responsiveness and commitment of SMERU’s staff and researchers to continue delivering quality research. I would also like to acknowledge the supports and collaboration of SMERU’s donors, the Board of Trustees, Australian Volunteers International (AVI), the academic community, NGOs, and other stakeholders. Without them, SMERU would not have been able to acquire its status as one of the most reputable research institutes in the country.

Finally, I would like to state that I have the confidence that SMERU, against the backdrop of its previous achievements, will continue to effectively fulfill the needs of its stakeholders by producing timely and relevant research addressing key poverty and socioeconomic issues.