ADB approves US$200m to aid RI deregulation

ADB approves US$200m to aid RI deregulation

MANILA (AFP): The Asian Development Bank (ADB) said here Thursday that it has approved a US$200-million loan for a program to liberalize Indonesia's complex and over-protected industrial sector.

The loan will go to reforming the complex procedures for licensing and approvals that burden domestic and foreign investors, the Manila-based ADB said in a statement.

This will include an overhaul of the legal basis for Indonesia's foreign investment policies, which date back to the 1960s and give only "limited assurances" to investors, the ADB said.

Indonesia's investment board will also be encouraged to focus on attracting and promoting investment rather than being concerned with regulation and control.

Along with the loan, the bank will be providing two technical assistance grants. One worth $1.5 million will go to a task force to promote deregulation and competition and a two million dollar grant will go to another task force to develop a strategy for small and medium enterprises, the ADB added.

In the past, Indonesia's policies often provided protection to "favored individuals or groups", leading to inefficiency, corruption and misuse of resources. Layers of approval and licensing requirements increased the cost of doing business, the ADB said.

Reforming this system is intended to lower business costs, increase opportunities and boost the chances of small and medium enterprises, the ADB added.