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JAKARTA, Sept 23 (Reuters) - The Asian Development Bank on Wednesday approved a $500 million loan for Indonesia, part of about $10.7 billion between 2020 to 2023 it promised for supporting government programmes including coronavirus pandemic relief.
ADB aimed at providing Indonesia, which is vulnerable to natural disasters, with a quick access to emergency financing, the bank’s vice president Ahmed M. Saeed said in a statement.
“This policy-based loan will help the government initiate a timely response to such shocks and reduce the economic and social impacts on public infrastructure and people’s livelihoods, especially among the poor and women,” Saeed said.
Indonesia on Wednesday reported the country’s biggest daily rise of new coronavirus cases at 4,465, taking the total to 257,388.
The Manila-based multilateral lender pledged to help Indonesia improve its competitiveness while addressing risks such as greater economic uncertainty due to the coronavirus and climate change.
“The strategy provides a flexible and agile framework for ADB to help Indonesia incorporate green recovery and other sustainable development options, while strengthening domestic resource mobilization to support the recovery efforts,” ADB President Masatsugu Asakawa said in a separate statement.
The ADB approved a $1.5 billion loan this year to help Indonesia plug a ballooning fiscal deficit.
Indonesia, which is bracing this year for its first recession since the 1998 Asian financial crisis, expects a fiscal deficit equal to 6.34% of gross domestic product in 2020, the widest in more than a decade, while next year’s deficit is seen at 5.7%.
It normally has a 3% of GDP ceiling for the annual budget deficit, but this was waived for three years to accommodate more spending to weather the impact of the pandemic.
The loans for Southeast Asia’s largest economy would also be used to support human capital development, financial inclusion and clean energy development.
The ADB said Finance Minister Sri Mulyani welcomed its support. (Reporting by Tabita Diela Editing by Gayatri Suroyo and Robert Birsel)
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