WB considering $1b in aid for RI<\/p>\n
JAKARTA (JP): The World Bank Executive Board is preparing to
\nmeet in Washington soon to consider a proposed US$1 billion
\npolicy reform support loan to Indonesia, a senior executive says.<\/p>\n
The World Bank's country director for Indonesia, Dennis de
\nTray, said here yesterday that the loan would help Indonesia
\nreform its financial and banking sector, improve corporate
\ngovernance and help meet a set of urgent social needs, such as
\nsubsidizing staple foods.<\/p>\n
He said that the recovery loan would cover efforts to help
\nfinance the importation of staple goods such as rice, soybeans,
\nwheat, wheat flour and sugar for poor and hungry Indonesians.<\/p>\n
De Tray said that Indonesia's worsening economic problems,
\ncombined with the severe drought, was threatening to push as many
\nas 50 million Indonesians into poverty.<\/p>\n
\"Tens of millions of desperate people are counting on all of
\nus to do everything we can to help them,\" de Tray said.<\/p>\n
\"It's a huge task and no one can hope to do it all, but
\nthere's a tremendous will in Indonesia and among donors to take
\nurgent steps to protect those worst hit,\" he added.<\/p>\n
He said the country's economic crisis was expected to leave at
\nleast 20 million jobless, or about 21.8 percent of the total
\nworkforce; ethnic strife could escalate as poverty grows,
\ndisrupting the economic distribution system, petty crime will
\nincrease, women are expected to a bear a heavier burden and 20
\npercent of school children are at serious risk of dropping out of
\nschool as a response to shrinking family incomes.<\/p>\n
\"The economic crisis in Indonesia has led to other severe
\nsocial problems which need special attention,\" he said.<\/p>\n
The World Bank said that the $1 billion loan would also be
\nused to strengthen overall environmental management and promote
\nsustainable environmental practices at a time when renewed
\npoverty was set to place additional pressures on Indonesia's
\nprecious natural resources, such as tropical forests.<\/p>\n
The World Bank has pledged a total of $4.5 billion to
\nIndonesia over the next three years in response to the financial
\ncrisis and the country's ongoing development needs. The $1
\nbillion support reform loan is part of this $4.5 billion package,
\n$2 billion of which is to fund economic reforms -- including
\nmoney for humanitarian needs -- with the remaining $2.5 billion
\nfunding project loans with an emphasis on poverty alleviation and
\nsocial investment. This loan is in itself a part of the $43
\nbillion bailout fund arranged for Indonesia by the IMF last
\nNovember.<\/p>\n
The World Bank also announced a social safety net fund to
\nsupport the hungry and the sick with \"tens of millions of dollars
\na year in international donor grants,\" and a $390 million
\nnational education campaign to help keep an estimated 25 million
\nIndonesian children in school in the next five years.<\/p>\n
About $292 million of the $390 million fund would be drawn
\nfrom the existing or proposed World Bank education projects,
\nwhile the other $98 million would be contributed by the Asian
\nDevelopment Bank (ADB).<\/p>\n
He said that the Consultative Group on Indonesia (CGI), which
\nwill convene in Paris at the end of July, would focus their
\nagenda on social safety net programs and the overall program to
\nfinance Indonesia get rid of its crisis in the years to come.<\/p>\n
\"Basically these are the two issues that are going to be the
\nfocus of the meeting next month,\" he said.<\/p>\n
He said the World Bank, which chairs the CGI (Indonesian
\ncreditor consortium) was considering shifting the group's aid out
\nof development projects into government programs to address the
\ncountry's economic crisis.<\/p>\n
\"As the condition worsens here, we are tending to move our
\nfocus away from project support towards program support, which is
\nwhere the government needs it most,\" de Tray added.<\/p>\n
He said the upcoming meeting would be different from the
\nprevious ones in the way that it would pledge support for
\ngovernment programs.<\/p>\n
\"The consultative group has been a financing mechanism for
\ndevelopment projects in the past but now it will pledge support
\nfor government programs,\" he said.<\/p>\n
He declined to mention the amount of aid to be pledged by the
\nCGI donors package, but he said it would be large.<\/p>\n
\" The World Bank and other donor countries are trying to pull
\ntogether efforts to support the Indonesian people,\" he said.<\/p>\n
\"Indonesia's problems are particularly severe and I think
\ndonors recognize that, and in that perspective you can expect
\nIndonesia to receive a fair share of attention,\" he added.<\/p>\n
He noted the country's crisis was caused by many factors,
\nincluding the regional crisis, the political crisis and its own
\nfinancial crisis, which have caused other social problems.<\/p>\n
The CGI, formed in 1990 to replace the Dutch-chaired Inter-
\nGovernmental Group on Indonesia (IGGI), groups all former members
\nof IGGI, minus the Netherlands, and five new creditors -- South
\nKorea, the Kuwait Fund for Arab Economic Development, the Saudi
\nFund for Development, the Nordic Investment Bank and the Islamic
\nDevelopment Bank.<\/p>\n
Other creditor members of CGI are Australia, Austria, Belgium,
\nCanada, Denmark, Finland, France, England, Germany, Italy, Japan,
\nNew Zealand, Norway, Spain, Sweden, Switzerland and the United
\nStates. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/wb-considering-1b-in-aid-for-ri-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}