ADB mulls US$500m loan to help Indonesia's poor

ADB mulls US$500m loan to help Indonesia's poor

HONG KONG (Reuters): The Asian Development Bank is considering extending a US$500 million loan to help Indonesians most affected by the financial crisis, ADB president Mitsuo Sato said yesterday.

Sato said the loan would be similar to a facility extended to Thailand in March.

The US$500 million loan to Thailand was a contribution to the country's Social Sector Program designed to mitigate the effects of economic crisis, particularly on the poor.

"We provided $500 million to Thailand for social assistance to people disrupted by the crisis, including the unemployed. A similar loan might be done for Indonesia, but it has not yet been decided," Sato told reporters at a financial conference.

The loan to Thailand was from the ADB's ordinary capital resources and was to be released in two tranches. The first tranche of $300 million was to be released immediately, the ADB said on March 12, while the other tranche of $200 million was to be released 10-12 months later.

Sato said he was not worried that social unrest in Indonesia would derail implementation of the International Monetary Fund plan.

He said Indonesian government authorities were "very committed to achieve the reform program".

Protests in the North Sumatra capital of Medan turned violent following an announcement on Monday that prices of fuel, transport and electricity would be raised.

The ADB president said he did not believe the social difficulties in Indonesia would set off another round of currency turmoil in the region.

The rupiah was trading at 9,200/400 per U.S. dollar in late morning trade on Thursday. The rupiah closed at 8,850/950 on Wednesday after falling nearly 10 percent in one day.