VIVAnews - The World Bank agreed to grant a loan of US$950 million to help improve reform in Indonesia.
The loan is meant to support Indonesia's attempts in further boosting investment climate, improving governance and public financial management, developing public services to underpriviledged people, and handling obstacles over investment in better infrastructures.
The loan is part of the fifth development policy, an annual series of loans for development policy since 2004. There are two parts of to the loan. US$750 million will be aimed at reducing time required in exports and imports, reforming tax administration system and improving budget and fund management in central government.
Meanwhile, the other US$200 million will be disbursed by late 2010. It is expected that the loans will help increase capital expenditure of infrastructure departments by 25 percent, improve the portion of electricity subsidy which is allocated to consumers with lowest income rate, and prepare competitive and transparent tender for public-private partnership transactions.
According to World Bank's Indonesia Country Director, Joachim von Amsberg, Indonesia is in a strong position to overcome challenges which resulted from the global financial crisis. Before the crisis expanded, foreign exchange reserves achieved the highest level and exports gained new achievement. Meanwhile, public debt ratio againts the GDP has drastically decreased.
"The key to get through the current global crisis is by being prudent with macro economic management as well as to improve governance and investment climate," he said.
Through the loans, the World Bank is supporting Indonesia's efforts in boosting investment in infrastructure sector concerning mainly with electricity, water and sanitation supply, public-private partnership development and solving problems which relate to governance such as land acquirement and procurement.
Translated by: Bonardo Maulana Wahono
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