ADB approves loan supporting Indonesia’s business reform

The Asian Development Bank (ADB) announced on September 25 that it has approved a 500 million USD loan to support Indonesia’s development agenda and reform priorities in creating an enabling environment for investments, easing trade barriers, and upscaling enterprises.

Illustrative image (Photo: adb.org)

This second of three subprograms of the Competitiveness, Industrial Modernisation, and Trade Acceleration Program (CITA) builds on the success of the first subprogram approved in October 2021.

ADB Country Director for Indonesia Jiro Tominaga said that to achieve high-income status by 2045, the government anticipates that Indonesia's gross domestic product must grow by at least 6.0% annually, significantly above the pre-pandemic average of 5.3%.

Indonesia is making good progress in its recovery from the COVID-19 pandemic, but ongoing structural reforms are needed to boost its growth potential by stimulating investment, job creation, improved business climate, and trade, he stressed.

According to the ADB, the Indonesian Government has undertaken a range of actions to improve the investment climate, as agreed under subprogram 2. Business license approvals have been made quicker through an update of the online single-submission, risk-based approach which integrates national, subnational, and ministries’ processes.

In addition, to attract more investment and support Indonesia’s transition to a low-carbon economy, the government deepened subprogram 1 reforms and, among others, promoted investments in energy efficiency and created an enabling environment for more green investments. Foreign direct investment for the manufacturing of batteries for electric vehicles was also approved, including the signing of five high-value contracts, from which at least 49,000 jobs are expected to be created./.

VNA