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Asian Development Bank Pledges $600 Million in Tsunami Aid

  • Tim Johnston

The Asian Development Bank has promised $600 million in grants to the five countries worst affected by December's Indian Ocean tsunami. The president of the bank, Haruhiko Kuroda, who is visiting Indonesia, says the aid will be carefully monitored to avoid corruption.

The $600 million trust fund is to be distributed to Indonesia, India, the Maldives, Sri Lanka and Thailand. The Asian Development Bank says half the money will go to Indonesia, the hardest-hit country, with more than 220,000 dead and missing, and huge areas swept clean of housing and infrastructure.

Haruhiko Kuroda is the president of the ADB, a non-profit lending organization. After his meetings with Indonesian officials in Jakarta Thursday, he said that bank officials will monitor the funds closely.

"We have to secure assistance actually reaches to the people who need assistance," he explained. "Here we have, of course, many mechanisms to assure that assistance will actually reach the people who need assistance."

He said the bank and the international anti-corruption watchdog Transparency International will hold a meeting in April in Jakarta to look at ways to ensure that tsunami aid is not misused.

Mr. Kuroda also is meeting with Indonesian officials to discuss broader economic issues. He says he believes that the Indonesian economy, currently expanding at just over five percent a year, could grow by more than six percent if foreign direct investment, or FDI, can be attracted to the country.

"For Indonesia, I think FDI is much needed because domestic consumption recovered, domestic investment is recovering, but FDI is not and if FDI can be attracted more in coming years that would certainly contribute to export growth, investment growth and total economic growth," he said.

He says the private sector will have to play a significant role in attracting investment. He also warns that the government needs to continue tackling corruption and the legal uncertainties that have made investors, both domestic and foreign, wary of putting money into Indonesia.