Manila, Dec 24, 2006 AEST (ABN Newswire) - A US$200 million ADB loan will support the second part of Indonesia's Development Policy Support Program (DPSP), a series of reforms that underpin key priorities of the Government's medium-term growth and poverty reduction program.
The loan builds on the support provided by ADB last year for the first DPSP, and complements assistance from the World Bank and the Government of Japan.
DPSP will help the Government achieve its goal of stimulating higher and sustainable economic growth and reducing poverty - particularly the vulnerability of the poor. It is promoting investments and wide-ranging reforms aimed at improving macroeconomic stability and creditworthiness, strengthening public financial management and anticorruption, and improving delivery of public services.
"The Government has shown a strong commitment and made substantial progress carrying out reforms in recent years, building on its efforts to restore macroeconomic stability since the Asian financial crisis," says Arjun Thapan, Director General of ADB's Southeast Asia Department. "Many indicators have shown marked improvement. The challenge now is to attract back investments so the economy can grow at a level that creates enough jobs and lifts people out of poverty."
Reforms supported under the first part of the program were carried out over the course of 2006. The program also sets out indicative actions to guide the reform agenda during 2007 and beyond, as part of a Development Policy Loan series, which harmonizes policy reform support from various development partners.
"The program is fully based on the Government's reform agenda and deepens ADB's involvement in reforms it has supported in the past," says Edgar Cua, Country Director of ADB's Resident Mission in Indonesia.
"Being a program cluster, the DPSP series provides for continuity of involvement by development partners in a seamless manner. Its unique structure also helps reduce transaction costs to the Government, bringing about greater efficiency. The challenges facing Indonesia require comprehensive reforms over the medium-term, which is exactly what this program provides."
The loan will be delivered in a single tranche from ADB's ordinary capital resources. It has a 15-year term, including a grace period of three years, with interest determined in accordance with ADB's LIBOR-based lending facility. The executing agency is the Ministry of Finance.
Contact
Floyd Whaley
Email: fwhaley@adb.org
Tel:+632 632 6848; Mobile: +63 920 938 6488
Graham Dwyer
Email: gdwyer@adb.org
Tel:+632 632 5253; Mobile: +63 920 938-6487
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