ADB to grant $3.27b in fresh loans to Indonesia

ADB to grant $3.27b in fresh loans to Indonesia

Dadan Wijaksana, The Jakarta Post, Jakarta

The Asian Development Bank (ADB) has announced a lending
program to Indonesia of up to US$3.27 billion to be dispersed in
over 30 loan projects over the next three years.

"The program will carry out a balanced mix of poverty
reduction programs, accounting for 57 percent of the 30 projects
planned, along with other assistance to promote growth," ADB
principal programs coordination specialist Shiladitya Chatterjee
said in a statement on the bank's web site on Wednesday.

The lending projects will be carried out under the ADB's
Country Strategy and Program (CSP), an update of which was
endorsed by the bank's board of directors on Wednesday.

CSP is annually updated to take into account the continued
relevance of the program, its implementation and the bank's
operational program for the next three years.

"The update concentrates ADB's assistance more on the primary
focus areas of the strategy so that more intense attention can be
paid to their design and implementation, and targeting them more
geographically," David Green, country director of ADB's Resident
Mission, said.

ADB's CSP for Indonesia, finalized in 2002, addresses the main
medium-term needs of the economy, stressing improvements to
governance, meeting local needs through decentralization, human
development, environmental management and raising the country's
long-term growth potential.

The statement also said there had been steady reduction in
poverty incidence in the country. After reaching its peak of 23.5
percent of the population, the figure had decreased to 18.2
percent by the end of last year.

"However, rural poverty remains high as a result of poor
agricultural performance," it added.

While high level economic growth is the obvious answer to
resolve poverty problems, Indonesia has been lagging in its
efforts, growing only by a modest level of between 3 percent and
4 percent over the years.

Complementary to the loans, a technical assistance program of
$12 million to $14 million per year is planned.

Since joining the ADB in 1966, Indonesia has received 263
loans totaling $19.1 billion, of which 62 projects were active at
the end of 2002. This came on top of 433 technical assistance
grants totaling $200 million.

30 projects in next three years

1. Seven projects in the agricultural and natural resources
sector, which include community-based land rehabilitation, flood
management in rivers in Java, enhancement for tree crops, water
resources management, fisheries and coastal resources, and rural
sector development.
2. Energy and transportation projects, which include road
rehabilitation, interisland transportation, airport rebuilding,
air quality improvement.
3. Nine projects in social infrastructure projects, which will
improve water supply services, education, housing finance and
social protection.
4. Industry and finance projects, which include assistance for
local governments and state enterprises.