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Jakarta wants $600 million ADB loan conditions eased

Reuters - October 8, 2001

Jakarta – Indonesia has asked the Asian Development Bank (ADB) to ease conditions required for the release of an up to $600 million loan, an official said on Monday.

The ADB earlier this year asked Indonesia to give more incentives and relax barriers against foreign investors as part of requirements for the loan.

But Jakarta says it needs more time. "Right now the government is asking the ADB to change the conditions [for the disbursement] to something the government can achieve," Syafrudin Tumenggung, head of the powerful Financial Sector Policy Committee, (FSPC) told reporters.

The FSPC comes under the Finance Ministry and signs off on major debt restructuring deals. Conditions the government was required to meet included drawing up three new laws covering money laundering and foreign investment.

But Tumenggung said little progress had been made on the requirements, which would need parliamentary approval, and the cash-strapped government wanted the funds by December.

The loans will finance four projects: financial reforms, community development, electricity and industrial competitiveness and development of small and medium enterprises.