ADB Debts 500 Million US Dollars To Indonesia To Strengthen Competitiveness To A Green Economy

ADB (Photo: Antara)

JAKARTA The Asian Development Bank (ADB) has approved a policy-based loan worth 500 million US dollars to Indonesia.

The loan will be used to further strengthen competitiveness, encourage green growth, and accelerate Indonesia's trade through the third sub-program of the Trading, Industrial Modernization and Trade Acceleration Program (CITA/Competitiveness, Industrial Modernization, and Trade Acceleration Program).

"Indonesia is committed to achieving the status of a high-income country by 2045, an effort that requires sustainable economic growth and structural transformation," said Director of ADB for Indonesia Jiro Tominaga.

Jiro conveyed that policy reform under the CITA sub-program will help attract more investment in the green and sustainable business sector, reduce trade barriers, and empower regional businesses, especially women's-owned businesses.

According to him, this program seeks to create an environment that supports investment, reduce trade barriers, increase business scale, and strengthen Indonesia's efforts to develop green industries in response to climate risk.

Meanwhile, this subprogram continues the momentum of the two previous subprograms approved in October 2021 and September 2023.

Through subprograms 1 and 2, ADB supports the government in creating an economy that is better able to compete and be investment-friendly in order to accelerate Indonesia's recovery from the COVID-19 pandemic.

"The achievements include launching an online platform to accelerate business licensing, implementing national logistics plans to increase trade, as well as creating a single-window system to simplify international trade procedures," he said.

Subprogram 3 continues this progress by making Indonesia a more attractive investment destination, overcoming trade barriers, and continuing to support micro, small and medium enterprises (MSMEs).

Jiro conveyed a number of important initiatives including issuing automatic permits through an updated online system, encouraging green growth by providing tax breaks for the electric vehicle industry, as well as strengthening support for small businesses through new incubator programs and national censuses to better understand the needs and potential of these small businesses.

Furthermore, ADB noted that Indonesia is taking a major step towards gender equality and financial inclusion by becoming the second country to adopt the Women Entrepreneurs Finance Code, which encourages financial institutions to increase lending to women-led businesses.

Guidelines for sustainable procurement have been issued to encourage the participation of MSMEs and women's businesses.

CITA is in line with Indonesia's 2045 Vision and the 2025'2029 National Medium-Term Development Plan, and is an important part of the 2025'2029 ADB State Partnership Strategy for Indonesia, especially strategic routes to increase economic competitiveness.