Indonesia facing seven main economic development problems, says ADB

Jakarta (Antara News) - The Asian Development Bank (ADB) said Indonesia faced seven main problems in its economic development, poverty alleviation and reducing the unemployment, as projected in the National Medium-Term Development Plan, an official said.

The seven main problems include inconducive investment climate, limited infrastructure development, undeveloped financial sector, low decentralization capacity, incorrect management of natural resources, low development spendings and ailing public sector management, ADB vice president C. Lawrence Greenwood said here on Tuesday.

Greenwood said that the inadequate infrastructure development was the result of lack of project designing, executing capacity and limited funding, although the government has projected an investment of US$65 billion this year.

According to the ADB, despite the government`s hope for private sector role in the building of infrastructure projects, additional products for non-bank investment would be necessary.

Meanwhile, ADB chief economist Ramesh Subramaniam said 85 percent of investment projects was funded by banks.

The ADB, therefore, would support the Indonesian government`s efforts of solving the problems and help it reach its two aims, namely stable economic growth and the Millennium Development Goals.

The Asian Development Bank (ADB) would make efforts to catalyze investments in the public and private sectors through reforms in the macro-economy, infrastructure, finance, infrastructure investment selection, and private capacity development projects, in order to revive the economic sector and lower the unemployment rate.

The ADB would focus its mission on a balanced, transparent and sustainable fiscal decentralization to help provincial administrations restore the quantity and quality of public services.(*)
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