A US$300 million loan approved today by the World Bank’s Board of Executive Directors will help the Government of Indonesia deepen reforms to reduce the costs and improve the reliability of the country’s maritime logistics. This is good for investment in Indonesia.
The Second Indonesia Logistics Reform Development Policy Loan (DPL) builds on the reforms supported by the first Logistics DPL approved in November 2016 and addresses some of the key bottlenecks in the movement of goods within and across Indonesia’s borders.
Efficient maritime logistics is vital for higher growth of the manufacturing, agriculture and service sectors. Better logistics will increase the country’s competitiveness and also help poverty reduction by lowering the price of goods and services in remote regions, especially in Eastern Indonesia. This means investing in Indonesia requires good logistic.
Inefficient port operations, uncompetitive logistics services markets and lengthy trade procedures hinder Indonesia’s competitiveness. Ports are often a bottleneck in the country’s logistics chain, hampered by inadequate infrastructure, burdensome regulations and low productivity. That is why investing in Indonesia's infrastructure is a must.
The World Bank’s support to Indonesia’s logistics sector is a vital component of the World Bank Group’s Country Partnership Framework for Indonesia, which focuses on government priorities for transformational development impact. This DPL is also leveraging additional lending from the Government of Germany through the German Bank for Development (KfW) and the Government of France through the Agence Française de Développement (AFD).