ADB management wants RI loan to go through

ADB management wants RI loan to go through

MANILA (Reuters): Officials of the Asian Development Bank (ADB), whose board has delayed a decision on a loan package to Indonesia, say it is crucial that it is approved to help the economy stay afloat.

An ADB official said the bank's board was due to meet on Thursday but one governor called for a delay until next Monday, citing procedural reasons. The source did not say which country the governor came from.

The source said Indonesia's Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita and Finance Minister Fuad Bawazier had both expressed disappointment over the delay, which came as rioting spread in Jakarta.

The ADB has planned to lend US$1.5 billion to Indonesia as part of an international bail-out package, to be released after an International Monetary Fund agreement with Indonesia, eventually reached early this month.

The money is earmarked to help the financial sector, specifically banking and capital market development.

"Everyone knows there would be social problems (following economic reforms). That is expected. For us not to go in on that basis is not acceptable," said Shoji Nishimoto, ADB Director of Program Department East, whose supervision includes Indonesia.

"We are focusing on the financial sector...I don't think there is any reason we should not go in," he said.

The Bank has identified about 20 Indonesian banks to assist, which in turn would help foreign trade, he said, noting that some banks were already having trouble getting letters of credit accepted.

"Our package is really important. I feel we should help Indonesia," Nishimoto said, adding that the question of politics was outside the ADB's charter.