BANGKOK, THAILAND (23 June 2019) — Asian Development Bank (ADB) President Mr. Takehiko Nakao met with Indonesian President Mr. Joko Widodo today on the sidelines of the Association of Southeast Asian Nations (ASEAN) Summit to reaffirm ADB’s support for the country’s reform agenda and plans for expanding ADB operations in Indonesia.
“Indonesia’s reform agenda will be essential for the country to achieve sustainable and inclusive growth, and shared prosperity,” Mr. Nakao said. “ADB welcomes President Widodo’s enhanced focus on human capital development, and on the country’s infrastructure such as water supply and sanitation, energy, and transport.” Building the skills of the Indonesian workforce, along with adequate social protection systems, will be vital to develop Indonesia into a more modern industrial and service-oriented economy.
Mr. Nakao commended Indonesia’s fiscal prudence and sound macroeconomic management. Indonesia’s economic fundamentals are solid, as shown by a strong gross domestic product growth rate of 5.2% in 2018, a manageable inflation rate of 3.2%, prudent fiscal management, and healthy foreign exchange reserves. Mr. Nakao also noted that the rupiah exchange rate has picked up and stabilized since the fall of 2018.
Mr. Nakao updated President Widodo on ADB’s support through a comprehensive $800 million emergency response package following natural disasters in Central Sulawesi and Lombok in 2018. ADB committed to providing immediate support when Mr. Nakao met with Mr. Widodo on 12 October 2018 in Bali on the sidelines of the IMF–World Bank Annual Meetings. The first phase of the support, worth $500 million to meet immediate rehabilitation needs, was approved by ADB on 20 November 2018, less than 7 weeks after the earthquake and tsunami hit Central Sulawesi. The second phase of support for $300 million, which ADB’s Board of Directors will consider on 26 June 2019, will support the reconstruction of damaged irrigation facilities, water supply and sanitation systems, a large university, and port and airport facilities.
ADB’s regular sovereign lending program to Indonesia, which has grown in recent years, is expected to reach $2.6 billion in 2019. ADB finances investments in energy, skills development, irrigation, and border area development, through its project and results-based loans. ADB is also supporting structural reforms in the areas of public sector management, financial sector, energy sector, and investment climate through policy-based lending. In addition to sovereign lending, ADB’s private sector operations provide loans to private sector projects in strategic areas such as geothermal energy.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.