The Japan Bank for International Cooperation (JBIC) has signed an ODA loan agreement totalling ¥10.794bn with Indonesia. This loan is co-financed with the World Bank’s first development policy loan (which provides an equivalent of US$300mn). The combined lending volume thus totals the equivalent of US$400mn.
This loan was provided to the government of Indonesia due to the achievements made by a series of reforms put in place to further stabilise its macro economy, improve its investment climate, enhance its fiscal management capacity, and also for the fiscal support shown for implementing reforms in the future.
Indonesia had completed the IMF programme, created in the wake of the Asian currency crisis, at the end of 2003, and has since continued its economic and fiscal reform efforts.
As a result, the country has achieved higher growth (from 3.4% in 2001 to 5.1% in 2004), lower inflation (from 13% in December 2001 to 6.2% in October 2004), reduction in government debt and a rise in investment. The Yudhoyono administration has continued to push forward with these reforms since it assumed office in October 2004.