WASHINGTON, November 19, 2013 –The World Bank’s Board of Executive Directors today approved two new development policy loans (DPLs) to support ongoing Indonesian government reform efforts to alleviate poverty, increase shared prosperity, strengthen public financial management, and improve connectivity. The INSTANSI (Institutional, Tax Administration, Social and Investment) and Connectivity DPLs are the second in a series that was initiated in 2012.
“Indonesia’s prudent management of its public finances contributes to the country’s ability to weather global economic pressures,” says World Bank Country Director for Indonesia, Rodrigo Chaves. “The World Bank continues to support the government’s reform agenda, aimed at improving national connectivity and enhancing the quality of government spending – important policy steps that will help towards increasing shared prosperity for all Indonesians.”
The second INSTANSI DPL, disbursing $400 million, recognizes measures to enhance social safety net spending aimed at reducing the vulnerability of poor households, and government efforts to strengthen social protection through a national social security system (Sistem Jaminan Sosial Nasional, SJSN) that begins initial implementation in 2014. This DPL will also support public financial management reforms, as an important contribution to improving service delivery.
The second Connectivity DPL, disbursing $300 million, recognizes Indonesia’s efforts to strengthen the policy framework for improved trade logistics and facilitation, infrastructure, transportation, and information communication technology (ICT).
“Institutional and bureaucratic challenges are among the key obstacles to improving connectivity and infrastructure development in Indonesia today. Addressing these challenges would boost Indonesia’s economic and productivity growth,” says Ndiame Diop, Lead Economist and Economic Adviser for the World Bank in Indonesia.
The World Bank’s portfolio in Indonesia is comprised of 37 active operations, with nearly US$8 billion of net commitments in lending as of August 2013. Its programs include support of community-driven development, to geothermal energy expansion, and early childhood education services.