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p. 87 of 95 BACK | NEXT Message from the Chairman of the Board of Directors Members, Capital Stock and Voting Power The Record Abbreviations 2004 in Review: Board of Directors' Report Special Theme: The Changing Face of the Microfinance Industry: Building Financial Systems for the Poor Part 1: Institutional Effectiveness Part 2: Poverty Reduction Strategic Priorities Thematic Priorities Regional Perspectives East and Central Asia Mekong The Pacific South Asia Southeast Asia Indonesia Malaysia Philippines Part 3: Financial Statements: Management's Discussion and Analysis

Annual Report 2004 : Part 2: Poverty Reduction

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Indonesia

Strategy and Policy Dialogue. The 2002 CSP addressed the main medium-term needs of the economy and recognized the need for a geographic focus by introducing a three-tier system that encouraged the grouping of projects in common areas. The 2005 CSP will adopt a sharper focus and introduce further selectivity in terms of sectors and the criteria for identifying geographic areas in the context of management for development results and the review of the poverty reduction strategy. Support for 2005 will be formulated at a time when there will be a significant focus on post-tsunami rehabilitation and reconstruction in the provinces of Aceh and North Sumatra.

In 2004, portfolio administration at the resident mission was strengthened. It is expected that by the end of 2005, it will be administering about half of the portfolio of 36 loans (33 projects). Enhanced quality control mechanisms and stringent readiness criteria adopted for new loans should reduce start-up delays.

Loans and Technical Assistance. Two loans were approved in 2004 for the state audit reform sector development program to support policy and capacity-building initiatives to create an auditing sector that operates to internationally accepted standards: a $200 million program loan and a $25 million investment loan. Twenty-four technical assistance grants totaling $17.6 million and a grant from the JFPR for $1.5 million were approved.

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