WB Approves $800m in Loans to Spur Reform
JAKARTA ~ Indonesia will receive loans amounting to US$800 million to deepen reforms and improve economic conditions in Southeast Asia’s largest economy, the World Bank announced this week.
The two loans, which are being offered at below market interest rates, will flow directly into the nation’s budget and will help finance reforms aimed at fighting poverty, encouraging investment, improving governance and expanding infrastructure, the bank said in a statement.
The loans are an acknowledgement of the “extraordinary job” Indonesia has done in improving its macroeconomic position after the 1997 financial crisis devastated its economy, World Bank Indonesia senior economist Bill Wallace said.
However, he said, “Indonesia has still got very high levels of poverty, obviously, and that’s the area we’d like to help them deliver.”
The loans are to be devoted to efforts such as anti-corruption measures to help improve the country’s economic standing, he said.
“The budget support is the carrot but the real substance is the technical support we’ll give (Indonesia),” Wallace said.
Indonesia’s debt levels have declined the fastest of any East Asian economy, falling from 80 percent of gross domestic product (GDP) in 2000 to 35 percent by December this year, according to Bank figures.Filed under: The Nation