World Bank Approves $600m Loan

JAKARTA ~ The World Bank has approved US$600 million to support Indonesian reforms, which it said were already bearing fruit.

The assistance comprises a $530-million loan and a concessional credit worth $70 million, it said in a statement released on Wednesday.

“Indonesia has shown strong commitment to restoring sound economic fundamentals,” said Andrew Steer, the bank’s country director for Indonesia.

“The challenge now is to encourage investment that will spur growth and create jobs to ensure the needs of the most vulnerable are being adequately addressed,” he said.

He added that the government’s decision last year to reallocate $1.5 billion in fuel subsidies to programs that benefit the poor was “an extremely positive step.”

The World Bank development program assistance is intended to help the government deepen reforms in macroeconomic stability and creditworthiness, public financial management and governance, the investment climate and services for the poor.

World Bank economist William Wallace said the reforms had already produced results.

“Growth is accelerating; the financial sector is diversifying; red tape that impedes businesses is being cut; credit ratings are improving; and infrastructure projects are getting underway,” Wallace said.

“Investigations and prosecutions of corruption cases continue apace, civil service reforms are starting and the framework for decentralization continues to improve. We hope this momentum will continue,” he added.

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