Asian Development Bank and Indonesia Fact Sheet Gross Domestic Product

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					                                                                  Asian Development Bank &
                                                                  FACT SHEET

Table 1. Indonesia: Development                                   Indonesia has experienced strong economic expansion since recovering from the 1997
         Indicators                                               Asian financial crisis. Economic growth accelerated to a 10-year high of 6.3% in 2007 and a
                                                                  respectable 4.5% in 2009, making the country one of the best performers within the global
Population in millions                 231.37 (2009)
                                                                  recession. At the end of December 2009, international reserves rose to an all-time high of
Annual population                                                 $66.1 billion, or 7.1 months of merchandise imports. Confidence in the country’s reserves was
 growth rate (%)                       1.3 (2007–2009)            further bolstered by substantial currency swap agreements in the total amount of more than
Adult literacy rate (%)                92.0 (2006)                $30 billion. The overall fiscal deficit for 2009 was 1.6% of gross domestic product (GDP) and
Percent of population                                             included a substantial fiscal stimulus. Indonesia’s debt-to-GDP ratio has continuously declined
 in urban areas                        51.5 (2008)
                                                                  from 57% in 2004 to 28% by the end of 2009.
                                                                        Robust economic growth prior to the crisis and sound macroeconomic management during
Percent of population living
 on less than $1.25 a day              29.4 (2007)                the crisis are reflected in Indonesia’s employment numbers. Indonesia’s unemployment rate
Percent of population living                                      shrank from 11.2% in 2005—the highest rate in the last 5 years—to 7.9% in August 2009.
 below the national poverty                                       However, poverty remains challenging, with 14.1% of Indonesians living below the national
 line                                  14.2 (2009)
                                                                  poverty line while the informal sector accounts for about 70% of the workforce.
Under-5 mortality rate per
 1,000 live births                     41 (2008)                        GDP growth is forecast to accelerate to 5.5% in 2010 driven by domestic consumption
Percent of population using                                       and a recovering global economy. Under its 2010−2014 Medium-Term Development Plan,
 an improved drinking water                                       the government identified 11 national priorities: (i) bureaucracy reform and good governance;
 source                                80 (2006)
                                                                  (ii) education; (iii) health; (iv) reducing poverty; (v) food security; (vi) infrastructure;
… = data not available, MDG = Millennium Development Goal.        (vii) investment and business climate; (viii) energy; (ix) environment and overcoming disasters;
Sources: ADB. 2010. Basic Statistics 2010. Manila.
         UNESCO. 2010. Institute for Statistics Data Centre.
                                                                  (x) less developed, border, and post-conflict regions; and (xi) culture, creativity, and technological
         World Bank. 2010. World Development Indicators Online.   innovations.

                                                                   Relationship with ADB
                                                                  Indonesia is a founding member of the Asian Development Bank (ADB) since 1966 and, by the
                                                                  end of 2009, had received 303 loans amounting to $25.7 billion and 504 technical assistance
                                                                  (TA) projects amounting to $282.9 million. Measured by loan approvals, Indonesia is ADB’s
                                                                  largest client, and its second largest recipient of TA support.
                                                                       Measured in cumulative ADB lending, 41% of overall lending supported agriculture and
                                                                  natural resources, energy, and transport and communications. Law, economic management, and
                                                                  public policy accounted for 16% of the total lending, reflecting the significance of policy-based
                                                                  lending since the 1997 Asian financial crisis.

                                                                   Impact of Assistance
                                                                  ADB’s engagement with Indonesia has been increasingly defined by the complex development
                                                                  needs of a rapidly evolving middle-income country. Within this context, ADB’s policy-based
                                                                  operations have increased over the past few years to support the government’s reform agenda.
                                                                  This was compounded in 2009 through support of the government’s global economic crisis
                                                                  management initiatives.

                                                                                                              As of 31 December 2009
     In 2009, the Public Expenditure Support Facility (PESF) and                                     25% is expected. The CMDPC led not only to increased diversification
the Countercyclical Support Facility (CSF) in the total amount of                                    of markets but also accelerated capital market growth. Strengthened
$1.5 billion (of a total of $2.184 billion lending in 2009) provided                                 regulatory and supervisory capacity ensured resilience of the finance
assistance to reduce the impacts of the global crisis in Indonesia.                                  sector, protecting the economic development of the economy as
The PESF, supported by several development partners and ADB, is                                      a whole.
a contingent facility to shore up confidence by providing access to
finance in the event that credit markets become prohibitively expensive,
as during the height of the global crisis. This facility contributed
                                                                                                          Future Directions
to improve risk perception. The CSF was an additional measure                                        ADB’s 2006–2009 Country Strategy and Program has recently focused
to provide timely support to assist the government in financing a                                    on accelerating growth, job creation, and poverty reduction through
temporary fiscal expansion to stimulate the economy and assisted                                     improving the quantity and quality of physical and social infrastructure
to ensure implementation of social spending and poverty alleviation                                  and by effectively using public, external, and private sector resources.
programs. The impact of both programs and the continuation of prudent                                Policy, institutional, and regulatory reforms remain vital for improving
macroeconomic management helped the government weather the global                                    public sector governance and enhancing investor confidence.
financial crisis well.                                                                                    ADB is developing a new County Partnership Strategy (CPS) in the
     The Fifth Development Policy Support Program (DPSP) improved                                    coming year. Lending and TA support under the new CPS will be aligned
the investment climate through streamlined investment regulations,                                   with the government’s new Medium-Term Development Plan 2010–
improved tax administration, reduced tax burden, and improving the
framework to increase access to credit for small and medium-sized
enterprises. In public financial management and governance, the DPSP                                  Table 4. Indonesia: Cumulative ADB Lending
supported the government’s efforts to move toward a results orientation                                        as of 31 December 2009
with a revised program structure for the government’s new medium-                                                                                              Loans             Amount
term development plan, the implementation of the single Treasury                                      Sector                                                    (no.)           ($ million)         %a
account, and steps toward an integrated financial management system.                                  Agriculture and Natural Resources                           99             4,047.00          15.74
With support from DPSP poverty alleviation and public service delivery                                Education                                                   32             2,222.35           8.64
were improved, with an increase in the block grant from the budget for                                Energy                                                      31             3,781.05          14.71
the poorest subdistricts under PNPM Mandiri, the government’s flagship                                Finance                                                     20             3,526.10          13.72
poverty alleviation program.                                                                          Health and Social Protection                                13             1,068.30           4.16
     The Capital Markets Development Program Cluster (CMDPC)                                          Industry and Trade                                         12                645.70           2.51
improved greater finance sector diversification and resilience. As the                                Public Sector Management                                   16              4,167.22          16.21
cluster began in 2006, the nonbank finance sector’s share was less                                    Transport and ICT                                          33              2,713.86          10.56
than 20% out of total finance sector assets; by 2010, an increase to                                  Water Supply and Other Municipal
                                                                                                         Infrastructure and Services                             31              1,949.74           7.58
                                                                                                      Multisector                                                16              1,586.22           6.17
                                                                                                      Total                                                     303             25,707.54         100.00
                                                                                                      – = nil, ICT = information and communication technology.
 Table 2. Indonesia: Economic Indicators, 2005–2009
                                                                                                          Total may not add up because of rounding.
 Economic Indicator                      2005         2006           2007        2008        2009
 Per capita GNI, Atlas method ($)       1,250        1,410          1,650       2,010          …
 GDP growth
    (% change per year)                      5.7         5.5           6.3          6.0        4.5
                                                                                                      Table 5. Indonesia: Project Success Rates
 CPI (% change per year)                    10.5        13.1           6.4          9.8        5.0                                                                                            No. of Rated
 Unemployment rate (%)                      11.2        10.3           9.1          8.4        …      By Sector                                                       Percentagea              Programs
 Fiscal balance                                                                                       Agriculture and Natural Resources                                  42.6                      68
    (% of GDP)                              -0.5         -0.9         -1.3         -0.1       -1.6
                                                                                                      Education                                                          95.2                      21
 Export growth
    (% change per year)                     22.9        19.0          14.0         18.3      -14.4    Energy                                                             69.6                      23
 Import growth                                                                                        Finance                                                            77.8                        9
    (% change per year)                     37.2          6.3         15.4         36.9      -27.7    Health and Social Protection                                       71.4                        7
 Current account balance                                                                              Industry and Trade                                                 16.7                        6
    (% of GDP)                               0.1          2.9          2.4          0.0        2.0    Multisector                                                        50.0                        4
 External debt (% of GNI)                   49.5        38.0          34.1         31.3        …      Public Sector Management                                          100.0                        5
  … = data not available, CPI = consumer price index, GDP = gross domestic product,                   Transport and ICT                                                  95.8                      24
  GNI = gross national income.
                                                                                                      Water Supply and Other Municipal
  Sources: ADB. 2010. Asian Development Outlook 2010. Manila.                                            Infrastructure and Services                                     52.4                     21
           ADB staff estimates.
           World Bank. 2010. World Development Indicators Online.                                            Total                                                       63.3                    188
                                                                                                      By Year of Approval
                                                                                                             1960s                                                      100.0                      2
                                                                                                             1970s                                                       59.0                     39
 Table 3. Indonesia: 2009 Loan, TA, and Grant Approvals ($ million)                                          1980s                                                       61.1                     54
                    Loans                                                                                    1990s                                                       63.9                     83
      Sovereign              Nonsovereign               TA              Grants             Total             2000s                                                       80.0                     10
       2,184.24                     –                  6.30             5.00              2,195.54    ICT = information and communication technology.
 – = nil.                                                                                             a
                                                                                                          Based on aggregate results of project/program completion reports (PCRs), PCR validation reports
                                                                                                          (PCRVRs), and project/program evaluation reports (PPERs) using PCRVR or PPER ratings in all cases
 Cumulative Lending (as of 31 Dec 2009)                                     : $25,707.54 million          where PCR and PCRVR/PPER ratings are available.
 Cumulative Disbursements (as of 31 Dec 2009)                               : $19,140.92 million      Sources: PCRs, PCRVRs, and PPERs containing a rating circulated as of 31 December 2009.
2014 and the core areas identified under ADB’s Long-Term Strategic                                     together with the World Bank and the Governments of Japan and
Framework. It will aim to reduce the transaction costs of designing and                                Australia, supported the $5.5 billion Public Expenditure Support Facility
delivering assistance. The new CPS will entail extensive consultations                                 provided last year.
with the government, development partners, civil society, and the                                           In addition, several development partners are supporting various
private sector.                                                                                        technical assistance, such as the Governments of the Netherlands and
                                                                                                       Australia, in areas of infrastructure, education, health, and public
                                                                                                       sector and water resources management; the Governments of the
     Operational Challenges                                                                            United Kingdom and Canada in areas of water supply and health; and
Given Indonesia’s size and diverse needs, past ADB-supported projects                                  the European Union in education.
have had wide geographic and sector coverage. Looking ahead,                                                Further partnerships are related to various trust funds ADB is
greater selectivity and a more balanced program and project pipeline                                   implementing on behalf of other bilateral partners.
are expected to be developed. The decentralized nature of the country                                       There was broad collaboration between ADB and many
has meant lengthy project preparation times and high implementation                                    development partners in the emergency reconstruction support for
costs. This calls for more innovative modalities, and ADB is applying                                  tsunami-affected areas in Aceh and North Sumatra provinces and
its Innovation and Efficiency Initiatives to foster better implementation                              earthquake-affected areas around Yogjakarta and Padang.
results.                                                                                                    Partnerships with various civil society organizations, and recently
                                                                                                       with major Indonesian universities, support knowledge exchange. Close
                                                                                                       collaboration is pursued with banks and representatives from private
     Partnership                                                                                       sector organizations.
ADB collaborates closely with the World Bank and the Government
of Japan in supporting the Government of Indonesia’s development
policy agenda in areas of public financial management, infrastructure
                                                                                                        Cofinancing and Procurement
development, investment climate, and public service delivery. ADB,                                     Cofinancing operations enable ADB’s financing partners—government
                                                                                                       or their agencies, multilateral financing institutions, and commercial
                                                                                                       organizations—to participate in financing ADB projects. The additional
                                                                                                       funds are provided in the form of grants, guarantees, loans, or
 Table 6. Indonesia: Portfolio Performance Quality Indicators                                          syndications.
          for Sovereign Lending, 2008–2009
 Number of Ongoing Loans (as of 31 Dec 2009)                                              30
                                                               2008 ($ million)     2009 ($ million)
 Contract Awards/Commitments                                      1,031.2               721.9
 Disbursements                                                      949.6               732.7           Table 8. Indonesia: Contractors/Suppliers Involved in ADB Loan
 Loans at Risk (%)                                                      –                10.0                    Projects, 1 January 2005–31 December 2009
 – = nil.                                                                                                                                                                       Contract Amount
 Note: Totals may not add up because of rounding.                                                       Contractor/Supplier                                   Sector               ($ million)
                                                                                                        Waskita Karya                                Multisector                      53.36
                                                                                                        Areva T&D - Multi Fabrindo
 Table 7. Cumulative Nonsovereign Operations Portfolio Distribution                                       Gemilang                                   Energy                           33.22
          by Top Countries, 1983–2009a,b                                                                Seneca - Perwita, JO                         Transport and ICT                24.30
                                                                                                        Balfour Beatty Sakti Indonesia               Energy                           20.95
                                                                                     Total ADB
                                                                                     Approvals          Adhi Karya Persero                           Transport and ICT                20.49
 Country                                                 No. of Projects             ($ million)        Brain-ZMEC Consortium                        Energy                           14.19
 China, People’s Republic of                                  24                       2,188            PAL Indonesia                                Energy                           11.63
 India                                                        35                       2,129            B-Care JV                                    Energy                           10.00
 Indonesia                                                    15                         919            Conbloc Infratecno                           Transport and ICT                 8.76
 Philippines                                                  26                         768            Hutama Karya - CTA                           Transport and ICT                 8.59
 Pakistan                                                     24                         721            ICT = information and communication technology.
 Thailand                                                     10                         395
 Kazakhstan                                                     4                        375
 Sri Lanka                                                    12                         280            Table 9. Indonesia: Top Consultants (Individual Consultants and
 Viet Nam                                                       7                        280                     Consulting Firms) Involved in ADB Loan Projects,
 Bangladesh                                                     8                        242                     1 January 2005–31 December 2009
 Afghanistan                                                    6                        198                                                                  Number of Times   Contract Amount
 Lao People’s Democratic Republic                               1                        100            Consultant                                              Contracted         ($ million)
 Azerbaijan                                                     4                         66            Multi Area Conindo (Macon)                                   8               12.39
 Nepal                                                          4                         59            Inacon Luhur Pertiwi                                         4                7.60
 Georgia                                                        1                         25            Lenggogeni, Rifa Bestari, Tridarma Fifita                    6                4.66
 Papua New Guinea                                               1                         25            Yayasan Agribisnis                                           1                4.19
 Other DMCs                                                   12                          62            Euroconsult Mott Macdonald BV                                3                4.07
 Regional                                                     38                       1,895            Reka Spasia Indonesia                                        5                3.91
 DMCs = developing member countries.                                                                    Katahira and Engineers and Association                       1                3.65
   Includes nonsovereign projects processed by the Private Sector Operations Department and             Surya Abadi Konsultan JV Arkonin and Ruptek                  2                3.46
   various regional operations departments of ADB. Regional operations departments started              China Engineering Consultants Incorporation                  1                3.22
   nonsovereign operations in 2007.
   Net of facilities cancelled in full before signing.                                                  Rifa Bestari, Bina Swadaya Konsultan                         2                2.69
 Source: Private Sector Operations Department.                                                          Individual Consultants                                     49                 2.47
     As of year-end 2009, cumulative direct value-added cofinancing                From 1 January 1968 to 31 December 2009, consultants were
for Indonesia amounted to $2.5 billion for 25 investment projects, and         involved in 10,945 contracts for ADB loan projects worth
$47.6 million for 57 TA projects.                                              $4.38 billion. During the same period, consultants from Indonesia
     A summary of projects with cofinancing from 1 January 2005 to             were involved in 2,850 contracts for ADB loan projects worth
31 December 2009 is available at                   $557.70 million.
Sheets/Indonesia/cofinancing.asp.                                                  From 1 January 1968 to 31 December 2009, consultants were
     From 1 January 1968 to 31 December 2009, contractors and                  involved in 20,087 contracts for ADB TA projects worth $2.52 billion.
suppliers were involved in 186,281 contracts for ADB loan projects             During the same period, consultants from Indonesia were involved in
worth $96.29 billion. During the same period, contractors and suppliers        553 contracts for ADB TA projects worth $37.42 million.
from Indonesia were involved in 35,503 contracts for ADB loan projects             A summary of procurement contracts awarded to companies
worth $10.38 billion.                                                          and consultants from Indonesia for goods and works, and consulting
                                                                               services can be found at

 Table 10. Indonesia: Top Consultants (Individual Consultants and               Table 11. ADB Assistance to DMCs, 2008–2009a
           Consulting Firms) Involved in ADB Technical Assistance                                                                         2008              2009        Change
           Projects, 1 January 2005–31 December 2009                                                                                    ($ million)       ($ million)     (%)
                                           Number of Times   Contract Amount    Lending                                                 10,123.92         13,230.19       30.68
 Consultant                                  Contracted         ($ million)     ADF, Sovereign                                           1,763.56          2,210.31       25.33
 Organization for Individual, Spiritual,                                        OCR, Sovereign                                           6,838.78         10,577.01       54.66
    and Cultural Advancement                      2               2.98          OCR, Nonsovereign                                        1,521.58            442.87      (70.89)
 Moores Rowland PT/Now Mazars PT                  1               1.58            Public Sector                                            300.00            134.30      (55.23)
 Inti Hexa Semesta (IHS), PT.                     2               1.02            Private Sector                                         1,221.58            308.57      (74.74)
 PA Consulting Indonesia, PT.                     1               0.74          Equity Investments                                         123.08            220.00       78.74
 Pusat Pengembangan Agribisnis                    1               0.70          Grants                                                     808.90          1,113.48       37.65
 Indokei International, PT.                       2               0.57          Technical Assistance                                       273.20            267.20       (2.21)
 Research Triangle Institute (INO)                1               0.50          ADF = Asian Development Fund, DMCs = developing member countries, OCR = ordinary capital resources.
 Intersys Kelola Maju, PT.                        1               0.50          a
                                                                                    Excludes terminated loans, equity investments, technical assistance, and grants.
 Ernst and Young Advisory Services, PT.           2               0.43
 Multi Area Desentralisasi Pembangun              1               0.40
 Individual Consultants                         197               5.08
  About Indonesia and ADB                                                                                Contacts
  ADB Membership                                                                                         Indonesia Resident Mission
      Joined                            1966                                                             Gedung BRI II, 7 Floor
                                                                                                         Jl. Jend Sudirman Kav. 44–46
  Shareholding and Voting Power
                                                                                                         Jakarta 10210, Indonesia
  Indonesia is the fifth largest shareholder among regional members and the sixth largest
                                                                                                         P Box 99 JKPSA
                                                                                                         Jakarta 10350A, Indonesia
       Figures are as of 31 December 2008, before the fifth general capital increase
                                                                                                         Tel +62 21 251 2721
  process began. The process is ongoing, and the final figures are expected to be
                                                                                                         Fax +62 21 251 2749
  available by 31 December 2010. Current subscription levels are available from
  the Office of the Secretary.
         Shares held                    192,700 (5.43%)
         Votes                          205,932 (4.65%)                                                  ADB Headquarters
                                                                                                         6 ADB Avenue, Mandaluyong City
  Marwanto Harjowiryono is the Executive Director and CJ (Stan) Vandersyp is the                         1550 Metro Manila, Philippines
  Alternate Executive Director representing Indonesia on the ADB Board of Directors.                     Tel +63 2 632 4444
                                                                                                         Fax +63 2 636 2444
  James A. Nugent is the ADB Country Director for Indonesia. The Indonesia Resident            
  Mission (IRM) was opened in 1987 and provides the primary operational link between
  ADB and the government, other development partners, private-sector, and civil-society                  Ministry of Finance
  stakeholders in its activities. IRM engages in policy dialogue and acts as a knowledge                 Jalan Dr. Wahidin No. 1
  base on development issues in Indonesia.                                                               Jakarta, Indonesia
                                                                                                         Tel +62 21 350 0840/381 4324
  The Indonesia government agency handling ADB affairs is the Ministry of Finance.                       Fax +62 21 38500842

                                                                                                         Useful ADB websites
  About the Asian Development Bank
                                                                                                         Asian Development Bank
  ADB is a multilateral development bank owned by 67 members, 48 from the region and           
  19 from other parts of the world. ADB’s main instruments for helping its developing
  member countries are policy dialogue, loans, equity investments, guarantees,                           Country website
  grants, and technical assistance (TA). In 2009, lending volume was $13.23 billion            
  (93 projects), with TA at $267.2 million (313 projects) and grant-financed projects
  at $1.11 billion (64 projects). In addition, $3.16 billion in direct value-added loan                  Asian Development Outlook
  cofinancing was generated. Over the last 5 years (2005–2009), ADB’s annual lending           
  volume averaged $9.18 billion, with TA averaging $245.7 million and grant-financed
  projects $855.4 million. As of 31 December 2009, the cumulative totals were                            Annual Report
  $155.94 billion in loans for 2,206 projects in 41 countries, $5.19 billion for 315 grant     
  projects, and $3.81 billion for 6,863 TA projects.                                                     report/2009/

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In this publication, “$” refers to US dollars.
Data are as of 31 December 2009 unless otherwise indicated. Fact sheets are updated annually in March.                                               April 2010