Islamic Development Bank Announces Plan to Provide COVID-19 Emergency Funds for Indonesia

Islamic Development Bank (IsDB) Logo.

In a bid to support countries in the efforts to tackle the impact of the COVID-19 pandemic, the Islamic Development Bank (IsDB) Group has launched a 3-R approach program for member countries with each component focusing on respond, restore and restart programs.

According to Indonesian Minister of Finance Sri Mulyani Indrawati, the IsDB Group has prepared a total loan of US$ 2.3 billion for the COVID-19 pandemic relief.

For Indonesia, the amount of the emergency funds from the IsDB Group is still under negotiation process.

“The COVID-19 emergency funds from the IsDB worth US$ 200-250 million is being negotiated,” Sri Mulyani Indrawati said after meeting with President of the IsDB Group Dr. Bandar Hajjar through video conferencing, Sunday (26/4).

In addition, the Minister continued, the World Bank and the Asian Infrastructure Investment Bank (AIIB) have also expressed their commitment to making a contribution of US$ 250 million to assist Indonesia in the handling of COVID-19.

Sri Mulyani added that it is estimated that Indonesia will receive loans amounting to US$ 750 million from the three multilateral financial institutions that will be allocated to health sector, for social aids, as well as for assistance for micro, small and medium enterprises.

Based on the results of the meeting, the IsDB Group 3-R approach programs are as follows:

Respond, the program aims to provide immediate action through cooperation between South-South countries and North-South countries with Reserve Linkage Operations that focuses on strengthening health sector to provide COVID-19 treatment, improving capacity in testing kits and vaccines production, and improving pandemic preparedness, as well as boosting cooperation with the G20 Global Initiative member countries.

Restore, the program aims to provide medium-term action through financing channels for trade sector and small and medium enterprises to maintain activities in the core of the strategic value chain, as well as to ensure continuity of supply for health sector, food security, and other important commodities.

Restart, the program aims to provide long-term action to build a resilient economy based on a solid foundation and to boost private investments by supporting economic recovery and countercyclical spending. (Ministry of Finance / EN)

Translated by: Syarifah Aisyah
Reviewed by: M. Ersan Pamungkas