Indonesia To Add ADB’s Capital
Wednesday, 29 April, 2009 | 16:48 WIB

TEMPO Interactive, Jakarta:The government has confirmed that it will deposit additional capital with the Asian Development Bank (ADB). The allocation for the multilateral funding institution will come from the Amended 2009 State Budget Plan.

Finance Minister and acting Coordinating Minister for the Economy, Sri Mulyani Indrawati, said Indonesia is currently the sixth biggest share holder of the ADB. “This position must be maintained,” she said after attending the Indonesia Infrastructure Forum yesterday.

Sri Mulyani said that at the 42nd Annual Meeting in Nusa Dua, Bali on May 2 - 5, ADB plans to announce an increase of its capital by 200 percent. If successful, its capital will become US $ 100-150 billion. Indonesia currently holds 192.700 shares (5,43 percent), with 205.932 or 4,65 percent vote rights.

However, she could confirm how much funds would be used to add to the Bank’s capital, saying, “It will have to be first discussed with the House of Representatives (DPR).”

Previously, Sri Mulyani had said that this year’s ADB meeting would benefit Indonesia as the increase in its capital allows it to raise the amount of loans for Asian countries by US$ 13 – 15 billion.

Secondly, the minister said, there will also be a meeting among the ASEAN Plus 3 finance ministers to discuss the finalization of the Chiang Mai Initiative and the use of the members’ US$ 120 billion funds.

“Indonesia can access US$ 14 billion from the emergency fund,” Sri Mulyani. Indonesia will also gain US$ 7,5 million in foreign exchange from the ASEAN Showcase and Finance Ministers Road Show. “And certainly from the visits of the expected 2.500 foreign participants.”

In a press release yesterday, the ADB released its newest research titled “The Economics of Climate Change in Southeast Asia: A Regional Review”. The research results cited hundreds of small islands in Indonesia which may disappear due to the rise in the sea level.

If the problem is not immediately addressed, Indonesia will face serious economic problems. The study stressed that if the world continues to act business as usual, Indonesia, the Philippines, Thailand, and Vietnam may suffer losses which, if combined, would be equivalent to six percent of the four countries’ GDP every year. That figure is beyond the loss caused by the current financial crisis.

“The climate change is really threatening Indonesia’s economic development. The worst could still happen,” said ADB economist assistant, Juszhong Zhuang.


AGOENG WIJAYA | EFRI RITONGA