ADB Lends Indonesia $1bn

MANILA ~ The Asian Development Bank (ADB) said on Thursday it had lent Indonesia US$1 billion to help maintain spending on social services in the wake of the global financial crisis.

The Manila-based lender said the loan was one of the biggest it had ever provided to Indonesia.

The loan will allow the country to enhance its safety net, better mobilise funds from commercial markets and maintain financial sector stability, the ADB said in a statement.

It will also reduce the government’s cost for borrowing from the market.

“Economic recessions in several of Indonesia’s major trading partners have negatively affected demand for Indonesian exports and hindered investment inflows,” the bank said.

“The global financial crisis has made it expensive for Indonesia to access international debt markets and trade finance, which could constrain spending on essential social services and poverty alleviation programmes,” said Jaseem Ahmed, a director of the ADB’s Southeast Asia Department.

“This loan will enable the government to maintain public expenditures, and to respond more effectively to the poverty impacts of the financial crisis.”

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