ADB vows not to let Indonesia 'fall'
ADB vows not to let Indonesia 'fall'
JAKARTA (JP): The Asian Development Bank is ready to provide
more loans to the country to prevent a further deterioration of
the country's ravaged economy, its program director said here
yesterday.
Shoji Nishimoto acknowledged the bank was "prepared to expand"
loans to Indonesia.
"Indonesia has been the largest client and borrower of the
ADB... and we're not a commercial bank, so we shouldn't let
Indonesia fall," he told reporters at a media conference
announcing the disbursement of US$100 million of the bank's $300
million in emergency loan commitments to the country.
He said the emergency loan would be used to finance projects
which would help the poor in surviving the year-long economic
crisis.
The government has projected the 1998/1999 budget deficit will
amount to 8.5 percent of the gross domestic product due to its
huge subsidy commitments for food, fuel, electricity and
employment creation programs.
Although the International Monetary Fund (IMF) and other donor
institutions including the World Bank and the ADB have committed
to provide the country with a multibillion dollar bailout package
to meet the deficit, about $4 billion to $6 billion is still
needed.
A team of top Indonesian officials led by the Coordinating
Minister for Economic, Finance and Industry Ginandjar
Kartasasmita is currently abroad, partly to lobby international
donor institutions to pour in more money to the country.
Nishimoto said ADB's $300 million emergency loan could be
treated as part of the additional funds.
The ADB last month approved a $1.5 billion loan to help
restructure the country's troubled banking financial sector.
It will be given in three tranches during the 1998/1999 fiscal
year. About $550 million had been disbursed by June 25.
The country is currently plagued by its worst economic crisis
in three decades, prompted by the sharp depreciation of the
rupiah against the U.S. dollar. The rupiah has lost about 80
percent in value from Rp 2,450 against the dollar in July last
year.
The economy is projected to shrink by at least 10 percent this
year, which is the first negative growth in 30 years, with
inflation to hit 80 percent and more than 15 million people to
lose jobs. (rei)