WB loan to improve Indonesia's IT
WB loan to improve Indonesia's IT
JAKARTA (JP): The World Bank will give a US$34.5 million loan
to Indonesia for the country's Information Infrastructure
Development Project, the bank reported yesterday.
The loan, signed Tuesday, will be used to enhance private
sector participation in the provision of information technology
(IT), and postal and tourist services.
According to the bank, the project will help dismantle
barriers into IT services -- by strengthening institutional
capacity and improving the currently weak legal and regulatory
framework under which governmental organizations responsible for
IT and intellectual property rights (IPR) can operate.
The project will also provide staff training and advisory
services; assist with developing IPR-related laws and
regulations; and conduct policy studies on IPR, electronic
commerce and software competitiveness.
Inadequate intellectual property protection -- particularly
for software, data and integrated circuits -- is a major
deterrent to direct foreign investment in Indonesia by major IT
firms.
This problem, combined with the scarcity of trained IT
professionals and limited IT services, had a negative effect on
Indonesia's overall competitiveness and social development, the
bank said.
A second component of the project addresses the limitation in
IT technology networks by expanding Indonesia's science and
technology network and giving the science and technology
community more cost-effective access to research and development
opportunities.
Postal and tourist industries will also receive assistance in
expanding their communications and information networks.
In the postal sector, the legal and regulatory framework will
be strengthened to promote private sector participation and
facilitate new entrants into the sector.
According to the World Bank, tourist information services will
be extended to regions through the development of a business
model and pilot projects for an electronic tourist information
system.
The total cost of the project cost is estimated at $53.2
million. Some 65 percent will be financed by the World Bank loan,
19 percent by the government, and the remaining 16 percent by the
private sector.
About 28 percent ($14.7 million) of the total project cost
will be devoted to improving the legal and regulatory framework,
34 percent to expand the science and technology network, 4
percent to expand communications and information networks of the
postal and tourist sectors, 29 percent to provide technical
assistance and 5 percent ($2.7 million) for project management
assistance. (08)