Fourth Infrastructure Development Policy Loan

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The Fourth Infrastructure Development Policy Loan Program for Indonesia aims to increase the quantity and efficiency of Government spending on infrastructure with reduced and better targeted Public Service Obligation (PSO), and expenditure planning and budgeting. In the face of Indonesia's rising demand for infrastructure services, the Government has committed to more investment and improved services in 2010 during the first year of the new administration. On top of a substantial 33 percent increase in the Government's spending on infrastructure as part of the 2009 fiscal stimulus package that was maintained in the 2010 budget, the Government proposed raising the budget allocation to infrastructure a further 55 percent for 2011. The Government's program is also being supported by a parallel series of policy loans by the Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA), both of which give recognition to the reforms being undertaken. As there is close coordination between the agencies to ensure consistent messages, the World Bank, ADB and Japanese support helps to ensure heightened attention to the most critical reforms while encouraging momentum across the broad reform agenda.