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.