WB mulls high-case loan scheme for Indonesia<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The World Bank, one of the country's main creditors, could raise
\nits loan commitment to Indonesia in the near future in view of
\nthe continued progress Indonesia is making in its economic reform
\nagenda.<\/p>\n
The Bank's Country Director Andrew Steer said on Monday that
\nIndonesia's reform programs were moving on the right track, which
\ncould in turn make Indonesia eligible for the Bank's high-case
\nlending scenario.<\/p>\n
"Indonesia is moving toward that direction, although this
\ndoesn't mean that Indonesia needs that amount, but that we are
\nwilling to endorse it," Steer told reporters, adding that the
\nprogram should be available in the next several months should
\nIndonesia maintain the reform pace.<\/p>\n
The World Bank has been providing loans for years to
\nIndonesia, using its Country Assistance Strategy as among the
\nguidelines in determining the amount of the annual loans.<\/p>\n
Under the existing scheme, Indonesia has been receiving loans
\nof between US$450 million and $800 million per year, which are
\nused to help finance various development projects across the
\ncountry.<\/p>\n
But, the commitments could be boosted to over $1 billion under
\nthe high-case scenario.<\/p>\n
The "upgrade" in Indonesia's status could be seen as a
\nrecognition from the Bank, as a foreign donor, that progress
\ncould indeed be seen.<\/p>\n
Steer said that Indonesia's efforts in its reform agenda had
\ngiven the World Bank, as well as other creditors, confidence in
\nthe country's overall economic outlook.<\/p>\n
The government has done a good job in creating and retaining
\nthe country's macroeconomic stability in the past years, but
\nprogress -- which was deemed encouraging -- has also been made
\nsuch as in trying to create a healthy and corruption-free
\nprocurement system, Steer added.<\/p>\n
Steer pointed out the issuance of a ruling on procurement in
\nthe public sector as an important step toward creating a fairer
\nand more transparent public procurement system.<\/p>\n
He was referring to a presidential decree issued last year,
\nwhich tightens procedures for public procurement, aimed at
\ncurbing flourishing corruption as it promotes transparency and
\nefficiency in the procurement of goods and services<\/p>\n
International institutions -- including the World Bank, and
\nthe Asian Development Bank -- have often stated that corruption
\nis mostly evident during the procurement of goods and services
\nfor state institutions.<\/p>\n
A report last year indicated that leakage in the procurement
\nprocess could account for up to 50 percent of any project's
\nvalue.<\/p>\n
Yet, despite the progress, Steer said, there was still room
\nfor improvement which could accelerate Indonesia's inclusion in
\nthe high-case lending program.<\/p>\n
On the procurement issue, was the establishment of a national
\nprocurement office to coordinate the affairs, and further avoid
\nabuse of public funds.<\/p>\n
The World Bank is among Indonesia's largest creditors under
\nthe Consultative Group on Indonesia (CGI), which groups together
\nIndonesia's major creditors and convenes each year to determine
\nfinancial pledges to the country. The ADB and Japanese government
\nare also included in that group.<\/p>\n
Last year, the CGI pledged to provide loans amounting to $2.8
\nbillion. CGI plans to convene in Jakarta in January to decide on
\na new loan commitment for next year.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/wb-mulls-high-case-loan-scheme-for-indonesia-1447893297",
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"sponsor": "Okusi Associates",
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