The Compact is a five-year agreement between the US government’s Millennium Challenge Corporation (MCC) and the Government of Indonesia, with contributions of US$649 million (Rp9.5 trillion) from the United States and US$49 million (Rp718 billion) from the Government of Indonesia, according to a statement issued by the US Embassy in Jakarta on Friday.
The Indonesia Infrastructure and Finance Compact aims to improve access to finance for the country’s transport and logistics infrastructure and MSMEs, especially those owned by women.
"Indonesia is taking crucial action to build a robust financial environment, promoting economic growth that benefits everyone," Minister Indrawati stated.
"I am excited to see how our joint efforts will continue to strengthen economic security for current and future generations of Indonesians," she stated.
The signing ceremony of the Compact was held at the International Monetary Fund (IMF) Office in Washington D.C., on Thursday, with representatives from the U.S. and Indonesian governments.
"This partnership represents the United States’ and Indonesia’s shared belief in democracy and innovation-driven economic growth,” Secretary Yellen, who is Vice Chair of MCC’s Board of Directors, stated.
"The compact will support Indonesia’s Just Energy Transition Partnership and the development of climate-resilient infrastructure that meets the standards under the Partnership for Global Infrastructure and Investment (PGII) – jointly announced by our presidents at the G20 Leaders’ Summit," she added.
Indonesia’s micro, small and medium enterprises (MSMEs) employ almost 97 percent of the nation’s workforce and contribute around 57 percent of the total gross domestic product (GDP).
As the country continues to invest in manufacturing and commodity-based exports, high-quality infrastructure is needed to transport workers and goods.
MCC Chief Executive Officer (CEO) Alice Albright, who joined the signing ceremony, said she was proud of MCC's nearly two-decade-old relationship with the Government of Indonesia.
"With this investment, we will have worked together on projects worth, in total, over $1billion. The compact signed today will focus on sustainability and scalability, improving the country’s resilience against climate change and other external shocks while creating more opportunities for business owners to access market capital," Albright stated.
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Reporter: Yuni Arisandy Sinaga
Editor: Rahmad Nasution
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