“Indonesia’s reform agenda will be essential for the country to achieve sustainable and inclusive growth, and shared prosperity,” Mr. Nakao said. “ADB welcomes President Widodo’s enhanced focus on human capital development, and on the country’s infrastructure such as water supply and sanitation, energy, and transport.” Building the skills of the Indonesian workforce, along with adequate social protection systems, will be vital to develop Indonesia into a more modern industrial and service-oriented economy.
ADB President Mr. Takehiko Nakao (second from left) meeting with Indonesian President Mr. Joko Widodo (rightmost). (Source: ADB)
Mr. Nakao commended Indonesia’s fiscal prudence and sound macroeconomic management. Indonesia’s economic fundamentals are solid, as shown by a strong gross domestic product growth rate of 5.2% in 2018, a manageable inflation rate of 3.2%, prudent fiscal management, and healthy foreign exchange reserves. Mr. Nakao also noted that the rupiah exchange rate has picked up and stabilized since the fall of 2018.
Mr. Nakao updated President Widodo on ADB’s support through a comprehensive USD800 million emergency response package following natural disasters in Central Sulawesi and Lombok in 2018. ADB committed to providing immediate support when Mr. Nakao met with Mr. Widodo on October 12th 2018 in Bali on the sidelines of the IMF–World Bank Annual Meetings.
The first phase of the support, worth USD500 million to meet immediate rehabilitation needs, was approved by ADB on November 20th 2018, less than 7 weeks after the earthquake and tsunami hit Central Sulawesi. The second phase of support for USD300 million, which ADB’s Board of Directors will consider on June 26th 2019, will support the reconstruction of damaged irrigation facilities, water supply and sanitation systems, a large university, and port and airport facilities.
ADB’s regular sovereign lending program to Indonesia, which has grown in recent years, is expected to reach USD2.6 billion in 2019. ADB finances investments in energy, skills development, irrigation, and border area development, through its project and results-based loans. ADB is also supporting structural reforms in the areas of public sector management, financial sector, energy sector, and investment climate through policy-based lending. In addition to sovereign lending, ADB’s private sector operations provide loans to private sector projects in strategic areas such as geothermal energy./.