RI gets $200m for policy reform program
RI gets $200m for policy reform program
The Jakarta Post, Jakarta
The Asian Development Bank (ADB) has provided another US$200
million in loans for Indonesia to help achieve its millennium
development goals of sustainable economic growth and poverty
alleviation through better macroeconomic policies.
The loans will be used to finance a Development Policy Support
Program, the bank said in a statement on Friday.
The program includes a series of structural reform packages
focusing on establishing a sound public financial management
system and an effective utilization of fiscal resources,
improving investment rules, strengthening the financial sector,
and reorienting public spending to reduce poverty and
unemployment.
It will support the government's Medium-Term Development Plan
for 2004-2009, which seeks to stimulate higher and more
sustainable economic growth of 7 percent a year by 2009. The plan
also aims to halve poverty to 8.2 percent by that date, from 16.6
percent in 2004.
"The program is a key pillar of ADB's emerging country
strategy and program for Indonesia for 2006-2010," Shamshad
Akhtar, the director general for the bank's Southeast Asia
Department, said.
Shamshad hoped the program would increase government reform
and strengthen public service delivery to the poor.
Bank chief economist for Indonesia Ramesh Subramani said the
program would help the government continue a process of
consolidation.
"Moving forward, the government (of Indonesia) is fully
committed to further strengthening fiscal management, with the
focus on tax reforms, debt sustainability and reorienting public
expenditures toward reducing regional disparities and achieving
the (United Nations) Millennium Development Goals," he said.
The loan will be delivered in a single tranche from ADB's
ordinary capital resources. It has a 15-year term, including a
grace period of three years, with interest determined under ADB's
LIBOR-based lending facility. The executing agency is the
Ministry of Finance.
The government needs an estimated $3.6 billion in total
external financing for the 2005 budget, which consists of $1.25
billion in program loans to support its reform policies, and
$2.35 billion in project disbursements.
In addition to the bank's loan, the Government has requested
$400 million from the World Bank and parallel financing from
Japan, with the amount yet to be determined.