JAKARTA (TheInsiderStories) – Indonesia get loan facilities US$1 billion from the Asian Infrastructure Investment Bank (AIIB) to support the government’ virus battle, said the agency on Tuesday (06/23). Last year, the Southeast largest economy proposed $500 million.
“These loans are important for Indonesia to support health care and protect urgently needed social expenditure, and expand social assistance programs for the poor and vulnerable people to reduce the adverse social and economic impacts of COVID-19,” said vice minister of finance, Suahasil Nazara in an official statement released today.
It said, the first loan totaling $750 million and co-financed with the Asian Development Bank, will go toward bolstering economic aid for small and medium-sized enterprises, support poor and vulnerable households, and strengthening the country’ health care systems.
Then, the Fund in partnership with the World Bank, has approved an additional $250 million to further strengthen the government’ immediate health response, which includes readiness for testing, surveillance, prevention and treatment of COVID-19, as well as hospital readiness.
“The COVID-19 pandemic has forced many developing countries to make difficult trade-offs to meet the urgent needs of their citizens. AIIB’ support for Indonesia will contribute to the government’s efforts to navigate these challenges during highly uncertain times,” AIIB vice president, D.J. Pandian stated.
The epidemic is expected to further strain Indonesia’ health system, which aims to catch up to its regional peers in terms of main health indicators. While, the economic growth in 2020 forecast a sharp drop from the pre-COVID-19 projection of 5 percent to 2.3 percent. Its further estimated that job losses due to the shutdown of the economy could be in the range of one million to seven million.
Pandian rated by tailoring its financial product offerings, AIIB has been able to deliver a timely and flexible response to its members to ensure economies will rebound as swiftly as possible.
“Indonesia had demonstrated sound macroeconomic management prior to the shock and shown a solid commitment to achieving the Sustainable Development Goals. We will continue to be responsive to the country’s needs through the crisis, so that it may continue its upward trajectory,” he added.
AIIB’ COVID-19 Crisis Recovery Facility, created as part of the coordinated international response to counter the COVID-19 crisis, has an initial size up to $10 billion to support the members’ urgent economic, financial and public health needs and quick recovery from the crisis.
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