Regions allowed to seek foreign loans

JAKARTA: In another development regarding regions' financing sources, the Ministry of Finance has issued a decree allowing regions to seek foreign loans.

Minister of Finance Boediono issued over the weekend a ministerial decree allowing such a move -- following years of pressure from regional administrations -- in a bid to speed up economic development in the regions, which has lagged due to financial constraints, a media release said.

However, the approval of the loans would remain under the ministry's authority.

Under the decree, a region needing foreign aid should seek approval from the Ministry, which would then collaborate with the Office of the National Development Planning Agency (Bappenas) in determining whether the region was eligible for the loans, under a joint team to be set up subsequently.

The release also said that, with more financial sources, local government should be able to accelerate development, not only in infrastructure, but also in public services. --JP