Regions allowed to seek foreign loans

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