WB promises more support in fight against poverty

Fitri Wulandari, The Jakarta Post, Jakarta

The World Bank will intensify its support for the government's effort to fight poverty by providing more loans for cities and regencies in the future, the Bank's representative said.

World Bank Country Director for Indonesia Andrew Steer said that for the past couple of years, the Bank had only been able to provide a little money to fund poverty reduction, citing an unclear policy on regional autonomy as the main reason.

"We had done little in the past couple of years because it was hard to do things with the decentralization of authority until it became clear now," Steer said on Tuesday on the sidelines of a seminar.

"Next year, we want to do more. It is a very exciting time for us. There are huge opportunities to help the poor and huge needs," he added.

Steer stressed that the Bank's commitment to alleviate poverty in Indonesia would remain strong even though the government might no longer extend the current economic reform program with the International Monetary Fund later this year.

"We have a lot going on, and (it's got) nothing to do with the IMF," Steer said.

He said in the next two months, the Bank was going to approve new major loans, including US$140 million for a power project, $220 million for a poverty reduction project, $70 million for a health project and $60 million for a water supply project.

Steer did not reveal how many loans the Bank would disburse to the government this year or how much it would increase them next year.

Poverty has declined significantly from 26.9 percent in 1999 to 16 percent in 2002. The Bank initially predicted it would reduce poverty to 15 percent this year.

International funding agencies have encouraged the government to shift gears to attain higher growth of more than 6 percent as the current level of below 4 percent was not enough to provide jobs.

From July 1996 to February 2003, the World Bank disbursed $2.04 billion in loans for various projects, technical assistance and programs dealing with the environment, education, poverty reduction and the power sector.

With increasing financial and technical aid to fight poverty, Steer said, the Bank would screen more than 100 of the 400 cities and regencies in the country to receive World Bank loans.

The 100 cities and regencies eligible for receiving the Bank's loans will be assessed by their performance in conducting good governance.

Elsewhere, Steer applauded the government for its good performance in maintaining macroeconomic stability.

Steer said Indonesia could be out of IMF tutelage, providing it continued the current macroeconomic program.

After the IMF, Steer suggested that the government needed to focus on having a good program to revive the investment climate.