MANILA, PHILIPPINES (23 April 2020) — The Asian Development Bank (ADB) today approved $1.5 billion in financing to support the Government of Indonesia’s efforts to alleviate the impact of the novel coronavirus disease (COVID-19) pandemic on public health, livelihoods, and the economy.
“COVID-19 has had a devastating health, social, and economic impact on Indonesia. I commend the government on its response to the pandemic, including strong and well-coordinated economic and fiscal measures,” said ADB President Masatsugu Asakawa. “ADB’s budget support will help the government address the challenges posed by COVID-19, with a strong focus on the poor and vulnerable, including women. The quick-disbursing financing is part of a larger support package ADB will provide to help Indonesia respond to COVID-19, in close coordination with other development partners.”
“ADB’s timely support will help the government implement comprehensive measures to mitigate the devasting impact of COVID-19,” said Indonesia’s Minister of Finance and ADB Governor Sri Mulyani Indrawati. “We appreciate the speed of ADB’s response and close engagement with the government to support the urgent needs of Indonesia.”
Mr. Asakawa visited Indonesia on 2–4 March and met with President Joko Widodo, Ms. Indrawati, and other senior officials. On 27 March, he discussed with Ms. Indrawati Indonesia’s COVID-19 response and how ADB could support the country.
The COVID-19 Active Response and Expenditure Support (CARES) Program—funded through the COVID-19 pandemic response option, or CPRO—will support the government’s stimulus package geared to expand existing social assistance programs, boost resources for COVID-19 prevention and control, and safeguard productive sectors and workers from the economic downturn. The funding is coming from ADB’s COVID-19 pandemic response option under the countercyclical support facility, which was introduced as part of a $20 billion package approved by ADB on 13 April to assist its developing member countries in their fight against COVID-19 through quick disbursing budget support with affordable terms and condition.
The CARES Program will be implemented through a country engagement framework focused on policy dialogue and monitoring of the government’s countercyclical strategy and measures. The framework will involve the private sector, civil society organizations, and entities that focus on big data analytics to provide innovative solutions for addressing the COVID-19 crisis. Supported by a technical assistance grant and drawing on regional and global best practices, the framework will help guide the transition from pandemic management to economic recovery.
Indonesia has been severely affected by the pandemic. Critical public health measures to limit the spread of the disease have seriously disrupted economic activity, resulting in a sharp decline in forecasts for economic growth in 2020. Many Indonesians have been adversely affected by the economic downturn, especially the poor and vulnerable groups. ADB estimates that poverty could increase significantly, unless support measures can be effectively implemented.
In addition to the CARES Program, ADB’s COVID-19 response support to Indonesia includes grant and loan funding for fast-tracked procurement of critical medical equipment and supplies to support the government’s efforts to stop the spread of the virus. ADB, through technical assistance, is also helping strengthen Indonesia’s social protection programs. Looking beyond the immediate pandemic crisis, ADB is supporting the government’s efforts to prepare for the post-COVID-19 recovery in areas such as economic reform, financial inclusion, and enhancement of economic and social infrastructure.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.