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Down to Earth IFIs Factsheet Series

No 1, February 2000: The World Bank Group

IFIs in Indonesia

This new series of monthly factsheets on International Financial Institutions (IFIs) will provide information on the World Bank Group, the International Monetary Fund (IMF) and the Asian Development Bank (ADB) focussing on their involvement in Indonesia.

The World Bank Group

What is it?

The World Bank Group is a multilateral lending agency made up of four closely related institutions: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). The World Bank provides loans to developing countries to help reduce poverty and to finance investments that contribute to economic growth.

The International Bank for Reconstruction and Development (IBRD), frequently called the World Bank, provides funding for creditworthy developing countries with relatively high income per person. IBRD raises the money through the sale of bonds in international financial markets that are absolutely guaranteed to be repaid.

The International Development Association (IDA) lends to countries at a cheaper rate of interest than the current market rate of interest. IDA lends to the poorest developing countries (per person incomes below $925 in 1996 dollars) that are not sufficiently creditworthy for IBRD financing. It receives its funding largely from contributions from its wealthier member countries. IDA loans do not have to be fully repaid for 35 to 40 years (depending on the level of development of the borrower), including a ten-year grace period and no interest but a 0.75 percent annual service charge. IDA credits are made only to governments.

The International Finance Corporation (IFC) provides project financing for private investment in developing countries. IFC offers long-term loans and equity investments, as well as other financing services. IFC will generally invest up to 25 percent of the total project cost.

The Multilateral Investment Guarantee Agency (MIGA) was established in April 1988 to help investors overcome the problems of political risk. Investors' concerns about political risk (such as social unrest) had the effect of slowing down the flow of foreign direct investment. MIGA aims to insure against these risks.

Recent Lending to Indonesia

The World Bank is the second largest aid donor to Indonesia. It has a large resident office in Jakarta.

1997/8US $1.5 bn
1998/9US $2.7bn
1999/00US $1.5bn
2000 (forecast)US $1.1bn

Examples of World Bank projects in Indonesia include: Social Safety Net Loans; Book and Reading Development II Education Loan; Suralaya Thermal Power Project Energy Loan; Banking Reform Assistance Project Loan; Telecom Sector Modernization Loan and Water Supply & Sanitation for Low Income Communities Loan.

Consultation with civil society and campaigns

The World Bank has a better record on consultation than the IMF. As with the IMF, NGOs can insist on meeting with mission teams and highlight policies that are problematic, suggest other policies are included and again highlight policies/targets that have not been implemented (lending can be suspended).

Note: The following section was updated in 2007:

Permanent Office in Indonesia

Acting Indonesia Director: Joel Hellman
Address:JSE Building,
Tower 2, 12th floor, Jakarta Selatan 12190,
Telephone: 021-5299 3000
Fax: 021-5299 3111
Main web-site:

Head Office, Washington

Address: The World Bank
1818 H Street, N.W.
Washington, DC 20433 U.S.A.
Tel: 1-202- 477-1234
Fax:1-202- 522-3405

For further contacts see also:,,contentMDK:20035595~menuPK:36691~pagePK:116743~piPK:36693~theSitePK:4607,00.html

Coming soon: factsheets on the IMF, ADB and who runs the IFIs.

This IFI factsheet is published by Down to Earth, the International Campaign for Ecological Justice in Indonesia.

DTE IFIs updates and factsheets are available in English and Bahasa Indonesia.

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