The World Bank aims to partner with Indonesia in strengthening its institutions to translate valuable resources into better development outcomes
Press Release No:2009/076/ EAP
Washington DC, September 11, 2008 – The World Bankâ€™s Board of Executive Directors today endorsed a new Country Partnership Strategy (CPS) for Indonesia which will see the World Bank Group supporting Indonesiaâ€™s development priorities, with emphasis on strengthening national institutions. The CPS governs the World Bank Groupâ€™s programs in Indonesia over the period of 2009-2012.
The strategy notes that ten years after the Asian Financial Crisis, Indonesia has emerged as a confident middle-income country on the back of a far-reaching reform program and prudent fiscal management. Indonesiaâ€™s macroeconomic fundamentals continues to be strong and the country is weathering the global economic slowdown well. But going forward, the strategy also highlights the need to make institutions more effective in delivering development results.
â€śIndonesiaâ€™smain challenge today is the need for more effective institutions.This strategy aims to help the government improve its existing programs and strengthen the institutions involved,â€ť said Joachim von Amsberg, Indonesia Country Director for the World Bank. â€śWhen institutions are strengthened, the people win because budgets are then translated into more effective development outcomes: better schools, better health clinics, and better livelihoods for the people.â€ť
Over the course of four years, the World Bank Group will provide around US$ 2 billion a year to build the capacity of central and sub-national institutions related to environmental sustainability and disaster mitigation, education, poverty reduction, community development and social protection, infrastructure, and private sector development.
â€śWith this new flexible approach, the World Bank Group wants to support success stories of replicable institutional reforms,â€ť said Jim Adams, the World Bankâ€™s Vice President for East Asia and Pacific. â€śThe Bankâ€™s approach will focus on the next generation of reforms needed to improve Indonesiaâ€™s competitiveness and integration into the world economy while also attending to growing needs for good governance, modernized social protection systems, better environmental management and improved infrastructure.â€ť
The CPS includes a growing role for the International Finance Corporation (IFC), which expects new investments to exceed $300 million per year. "The private sector has an important role to play in addressing a number of Indonesiaâ€™s development challenges,â€ť said Adam Sack, Indonesia Country Manager for IFC. â€śOver the course of the CPS period, IFC will invest long term capital and provide advice to increase access to financial services, improve infrastructure and strengthen commodity-based supply chains. Working both at national and sub-national levels, IFC will also support Government initiatives to improve the business environment."
The emphasis of the financing and knowledge program will continue to shift towards directly supporting successful or promising priority programs of the government. The new CPS builds on the governance focus of the Country Assistance Strategy (CAS) for 2004-2008. The World Bank Group will apply the â€śinstitutional lensâ€ť – all investments, together with advisory and analytical services will be concentrated on the institutions, sectors, systems and programs where this approach is most likely to succeed.
To learn more about the World Bankâ€™s support for Indonesia visit: www.worldbank.org/id