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INDONESIA’S Finance Minister Sri Mulyani Indrawati and US Treasury Secretary Janet Yellen signed the US$698 million (equivalent to IDR10.2 trillion) Indonesia Infrastructure and Finance Compact.
The Indonesia Infrastructure and Finance Compact is a five-year grant between the US government’s Millennium Challenge Corporation (MCC) and the Indonesian government, with contributions of IDR9.5 trillion from the United States and IDR718 billion from the Indonesian government, according to a statement from the US Embassy in Jakarta on Friday (04/14), 2023.
The Indonesia Infrastructure and Finance Compact aims to improve access to finance for Indonesia’s transportation and logistics infrastructure and micro, small and medium enterprises (MSMEs), especially those owned by women.
“Indonesia is taking important actions to build a strong financial environment, which promotes economic growth that benefits everyone,” said Minister Sri Mulyani.
“I am pleased to see how our joint efforts will continue to strengthen economic resilience for current and future generations of Indonesians,” she said.
The agreement signing ceremony was held at the International Monetary Fund (IMF) office in Washington D.C, on Thursday (04/13) local time, with representatives from the US and Indonesian governments.
“This partnership represents the United States’ and Indonesia’s shared belief in democracy and innovation-driven economic growth,” said Secretary Yellen, who is also Vice Chair of the MCC Board of Directors.
“This agreement will support Indonesia’s Just Energy Transition Partnership (JETP), as well as the development of climate-resilient infrastructure that meets standards, under the Partnership for Global Infrastructure and Investment (PGII) … jointly announced by the presidents of our two countries at the G20 Summit,” she continued.
Indonesia’s MSME sector accounts for nearly 97% of the national workforce and contributes around 57% of the total gross domestic product (GDP). While Indonesia continues to invest in the manufacturing sector and in commodity-based exports, high-quality infrastructure is needed to transport workers and goods.
Meanwhile MCC CEO Alice Albright, who participated in the signing of the agreement, said she was proud of the nearly 20-year relationship with the Indonesian government.
“With this investment, our cooperation on various projects will total more than US$1 billion. The agreement signed today will focus on sustainability and scalability, increasing Indonesia’s resilience to climate change and other external shocks while creating greater opportunities for business owners to access market capital,” CEO Albright concluded. [antaranews]
