INDONESIA GETS US$200 MLN TO SPUR GROWTH, CUT POVERTY

By Mohd Nasir Yusoff

JAKARTA, Dec 8 (Bernama) -- Indonesia will receive a US$200 million loan
from the Asian Development Bank (ADB) for further reforms that support the
government's ongoing efforts to spur sustainable growth and cut poverty.

The ADB Board of Directors Tuesday approved the single-tranche loan for the
Fifth Development Policy Support Programme, which provides co-finance for the
development policy loans aimed at helping the government strengthen the
investment environment, and improve public financial management and the delivery
of services to the poor.

"Indonesia has carried out wide ranging economic reforms since emerging from
the 1997-1998 Asian financial crisis, and more recently has taken swift and
decisive steps to address the threats posed by the global financial crisis.

"There have been broad improvements in the investment environment,
governance and other key areas, but significant challenges remain.

"To continue the reform process, the government has sought financial
assistance from development partners," the Manila-based ADB said in a statement
issued here Tuesday.

The statement quoted senior country specialist in ADB's Indonesia Resident
Mission, Sharad Bhandari, as saying that the primary rationale of this fifth
support programme was to reinforce the government's efforts to improve
competitiveness, boost public financial management and governance and contribute
to poverty reduction and improved public service delivery to the poor.

The statement said it was also designed to harmonise policy reform work with
key development partners -- including World Bank and Government of Japan, who
were supporting the development policy loans -- in order to improve the
effectiveness of aid delivery.

The fifth programme encompasses reforms focused on strengthening the
regulatory environment for investors, reducing the cost of regulatory
compliance, improving the government's budget process and management of public
funds, and fine tuning poverty alleviation programmes to make sure they reach
the neediest.

The programme loan complements a broad range of ADB assistance to Indonesia,
including a US$1 billion equivalent Public Expenditure Support Facility
Programme loan and a countercyclical support loan of US$500 million to help the
government counter the impacts of the global economic crisis.

The loan, from ADB's ordinary capital resources, has a 15-year term with a
grace period of three years and an interest rate determined in accordance with
ADB's LIBOR-based lending facility.

"The Coordinating Ministry for Economic Affairs is executing agency for the
programme," the statement said.
-- BERNAMA