ADB to give Indonesia $3.5b in aid

ADB to give Indonesia $3.5b in aid

MANILA (Reuters): The Asian Development Bank (ADB) said yesterday it would grant total assistance of US$3.5 billion to Indonesia between 1998 and 2000.

The Manila-based multilateral organization said in a statement Indonesia would receive four quick-disbursing loans totaling $1.5 billion.

In addition, the bank would also support projects to improve infrastructure and human resources with disbursements totaling $2 billion.

The four quick-disbursing loans would go toward the banking sector, capital market development, enhanced public financial management, and increased competitiveness of the industrial and trade sectors, the ADB said.

The statement did not give the terms under which the four loans and $2 billion support were being given.

"It is stressed that the bank's assistance is not simply a response to turbulence in regional financial markets but reflects the continuity in the bank's country strategy and support for Indonesia," the statement said.

The bank said it had been talking to the Indonesian government about increasing the country's competitiveness by allowing more domestic as well as international competition.

It praised Jakarta for "skillfully charting an economic reform strategy that has succeeded in ensuring macroeconomic stability..."

"In view of the current instability in regional financial markets, the assistance package reflects the shared view of the bank and the Indonesian government that it is vital to accelerate the implementation of measures ... for a more transparent, efficient and dynamic banking system and capital market," it said.

"This is an opportune moment for Indonesia to reinvigorate its efforts to improve its international competitiveness," the statement said.