Indonesia Gets Further ADB Support for Reforms to Boost Growth, Cut Poverty

MANILA, PHILIPPINES - The Asian Development Bank (ADB) is providing a $200 million loan to Indonesia to support efforts to sustain the country's economic growth and reduce poverty.

The loan for the Fourth Development Policy Support Program will help the government advance reforms to strengthen its finances, improve investment climate, and enhance public service delivery.

The funds will supplement financing for another series of loans from the World Bank and Japanese Government that also support the same policy reforms. The cofinancing arrangement ensures that development funding from different agencies is harmonized with the government’s own reform program.

The government has made significant strides to improve its finances, attract foreign investment, and address development needs, but it needs to continue on the reform path if it is to meet some of the Millennium Development Goals by 2015.

“Lagging human development indicators such as the high maternal mortality rate, malnutrition rate, and low transition from primary to secondary school must be tackled by improving the quality of services,” said Purnima Rajapakse, Principal Country Specialist at ADB’s Indonesia Resident Mission.

The fourth phase of the ongoing Development Policy Support Program will provide continuity to reforms begun previously in public financial management, investment environment, and public service delivery to the poor.

It will continue to assist the government’s reform agenda in areas that include removing regulatory uncertainty for investors, implementing the “national single window” for cargo clearances, reducing tax compliance costs, improving budget preparation and execution, lowering public procurement costs, and strengthening the capacity of local governments to deliver public services to the poor.

The long-term benefits of the Program will include a more stable macroeconomic environment, a healthier investment climate, less corruption and bureaucratic bottlenecks, and stronger government institutions.