The Asian Development Bank’s (ADB) Board of Directors has approved two policy-based loans—at $500 million each—to help Indonesia strengthen fiscal and public expenditure reform and promote quality investment, bolstering the country’s efforts to reduce poverty and income inequality.
The first loan will support the Fiscal and Public Expenditure Management Program (FPEMP), which reflects ADB’s systematic approach in supporting Indonesia’s fiscal and public expenditure reform by helping the government improve budget preparation, transparency, and monitoring.
“The program has enabled the government to increase targeted spending and improve the quality of spending in priority areas such as health and education in line with its implementation of the UN’s Sustainable Development Goals (SDGs),” said Senior Financial Sector Specialist for ADB’s Southeast Asia Department Mr. Sani Ismail.
The second newly approved ADB loan will fund the Stepping up Investment for Growth Acceleration Program (SIGAP), which will help the government boost investment-led growth by making the country’s regulatory environment friendlier to businesses and investors.
“The program will help the government boost efficient public and private investment, while also addressing investment constraints at the subnational level,” said Public Management Specialist for ADB’s Southeast Asia Department Mr. Robert Boothe. “The reforms include consolidating and expediting business licensing processes, institutionalizing good regulatory practices, and introducing various tools and systems to help the government implement its public investment program.”
The new loan is the third—and final—installment for the SIGAP program, which began in 2014 with a loan to address specific constraints to both public and private investment. ADB approved another loan in 2016 to support a stronger framework for public-private partnerships, as well as the implementation of public procurement reforms to promote efficiency and transparency.
Each of the $500 million loan will be complemented by the equivalent of €200 million ($239 million) in parallel financing from the German development cooperation through KfW.
Original source: ADB
Published on 08 June 2018
