Jakarta (VNA) – The World Bank’s Board of Executive Directors on June 16 approved a 800-million-USD loan to support reforms of Indonesia’s investment and trade policies and to help accelerate the country’s economic recovery and transformation .
The loan is intended to aid Indonesia’s ambitious reform programme to attract investment and increase the country’s economic competitiveness, said Satu Kahkonen , WB Country Director for Indonesia and Timor-Leste.
“These reforms have the potential to support an economic transformation away from commodities and towards higher value-added sectors. This could provide a much-needed boost to the post-pandemic economic recovery.”
High barriers to investment and trade have limited Indonesia’s ability to attract export-oriented foreign direct investment, reduced its integration into the global economy, and increased the cost of food in the country. These limitations also have slowed the growth of manufacturing and non-commodity sectors. The lion’s share of jobs in the past decades have been created in the commodities and low-productivity service sectors, which often pay below middle-class wages.
As a result of the pandemic, Indonesia has entered its first recession in two decades. This has exacerbated the challenges the economy is facing in expanding to more sophisticated sectors to help create better-paying, higher-productivity jobs./.