Jakarta (VNA) – The Asian Development Bank (ADB) has approved a total of 1 billion USD in loans for Indonesia’s development through reforms and investment-led growth.

The funds, to be released in two tranches of 500 million USD each, will be used to support Indonesia to strengthen fiscal and public expenditure reform as well as promote quality investment, bolstering the country’s efforts to reduce poverty and income inequality.

According to Senior Financial Sector Specialist for ADB’s Southeast Asia Department Sani Ismail, the first loan will support the Fiscal and Public Expenditure Management Programme (FPEMP) to help Indonesia improve budget preparation, transparency, and monitoring.

The second programme will help synchronise the planning of national priorities with the entire budget cycle and expand social assistance programmes as well as complemented the government’s medium-term revenue strategy, he said.

Indonesia’s reforms in public expenditure management and budget transparency have been recognised internationally, with the country ranking second in Southeast Asia in the Open Budget Index of 2017.

The ADB loan will also fund the Stepping up Investment for Growth Acceleration Programme (SIGAP) to help Indonesia boost investment-led growth by making the country’s regulatory environment friendlier to businesses and investors.

Public Management Specialist for ADB’s Southeast Asia Department Robert Boothe said Indonesia’s reform efforts to improve the business climate and accelerate investment have begun to bear fruit. 

By the end of 2017, foreign direct investments reached a 7-year high, with growth in investments picking up by almost 2 percent from 2016 levels, he noted.

Reform efforts had also improved Indonesia’s global competitiveness standings. The country climbed from 114th in 2015 to 72nd in 2018 out of 189 countries in the World Bank’s Ease of Doing Business rankings.-VNA