Contact: In Washington DC: Elisabeth Mealey (1-202) 458-4475, emealey@worldbank.org In Jakarta: Randy Salim: (62-21) 5299-3259 rsalim1@worldbank.org Washington, 9 December, 2009 – The World Bank has today approved two development policy loans (DPLs) amounting to $950 million as part of its continuing commitment to support Indonesia’s broad-ranging reform program. The loans are supporting Indonesia's efforts to move further forward to improve its investment climate, strengthen public financial management and governance, improve delivery of public services to the poor and address the obstacles to investment in new and better infrastructure. The Fifth Development Policy Loan – which is part of an annual series of DPLs that started in 2004 – comes at a critical time as Indonesia, along with other countries throughout the world, copes with the ramifications and contagion effects of the global financial crisis. This $750 million loan builds on and reinforces the four previous DPLs which have been instrumental in helping Indonesia to: · reduce the time it takes to import and export goods · reform its tax administration system, and · improve budget and cash management within the central government. “Indonesia is in a strong position to deal with the challenges being thrown up now by global financial turmoil,” said World Bank Country Director for Indonesia, Joachim von Amsberg. “Before the international crisis developed, foreign reserves were at historic highs and exports at record levels while the public debt to GDP ratio had fallen dramatically. The key to navigating the current turmoil is to continue on the same prudent path of good macroeconomic management and steady improvements on governance and the investment climate.” Through the Second Infrastructure Development Policy Loan (IDPL2), also approved today, the Bank is supporting Indonesia’s effort to increase investment in the infrastructure sector – especially in the provision of electricity, water and sanitation services, the development of public-private partnerships, and to help settle governance-related issues like land acquisition, environment and procurement. “Indonesia is gradually improving the quantity and quality of its infrastructure spending but more still needs to be done to meet the growing demands of infrastructure users, as well as to address the needs of the large parts of the population who do not have access to basic infrastructure,” said Mr. von Amsberg. By the end of 2010, this $200 million loan is, among other things, expected to help: · increase capital spending by infrastructure ministries by 25 percent · increase the proportion of electricity subsidies allocated to the lowest income consumers · prepare competitive and transparent tenders for public-private partnership transactions, and · significantly reduce the prevalence of open solid waste dumping in large and small cities. The World Bank is helping to mitigate the risks of corruption associated with infrastructure investments by supporting greater transparency and accountability in the planning and procurement processes. Mr. von Amsberg said the loans approved today are part of the regular program of World Bank investments in Indonesia. They are separate from Government requests to support additional financing needs in 2009 that might arise because of the international financial crisis. To read more about the World Bank’s support for Indonesia visit: www.worldbank.org/id |
RSS