ADB not to suspend RI loan

ADB not to suspend RI loan

MANILA (Dow Jones): The Asian Development Bank won't suspend previously approved emergency assistance loans to Indonesia despite the escalating violence in East Timor, a senior ADB official told Dow Jones Newswires.

"I don't see any legal ground to do that," said Shoji Nishimoto, director for the Programs Department East of the ADB, referring to the Manila-based bank's charter that "clearly states we are a nonpolitical institution."

Both the International Monetary Fund and the World Bank have threatened to freeze loans to Indonesia unless the government stops the violence in East Timor.

ADB's Nishimoto said the Manila-based bank's emergency assistance loans to Indonesia were aimed at supporting the country's recovery from the regional financial crisis.

Suspending the disbursement of these loans will run counter to the ADB's goal of helping the Jakarta government implement economic reforms, Nishimoto said.

"If we stop our loan disbursements, thousands of people who have nothing to do with East Timor will suffer," he said. "The East Timor issue is purely political."