September 16, 2026 | 06:25 pm
TEMPO.CO, Jakarta - The Asian Development Bank (ADB) has approved a US$650 million loan program, equivalent to Rp11.5 trillion, to assist Indonesia in modernizing regional fiscal management, advancing digital governance, and improving public service delivery.
Under the Accelerating Decentralization for Improved Local Governance (ADIL) subprogram, ADB's financing facility aims to strengthen coordination between the central and regional governments in managing public funds.
“This program will support a new national digital platform for fiscal data integration and reporting, alongside equitable property tax assessments to boost regional revenue,” ADB Country Director for Indonesia Bobur Alimov said in a statement in Jakarta on Wednesday, September 16, 2026, as reported by news agency Antara.
Additionally, the cooperation framework also addresses key civil rights protections, incorporating gender-responsive planning and budgeting to safeguard women and girls, alongside integrated disaster risk management.
“The Indonesian government's aspiration to become a high-income country by 2045 is strategically supported by economic development across provinces, regencies, and villages where essential public services are delivered. A stronger fiscal and digital architecture of the country will enable more effective service delivery for the public,” Alimov said.
He noted that regional authorities manage between 35 and 40 percent of total public expenditure, including on education, healthcare, and local infrastructure.
Therefore, he emphasized that reinforcing regional public financial management systems is critical to bridging gaps in fiscal and administrative capacity. These disparities can otherwise disrupt tax administration, policy coordination, and public service delivery across different regions.
The ADIL program is a follow-up to the Law on Financial Relations between the Central Government and Regional Governments. It is designed to tackle various structural challenges within Indonesia's regional fiscal system.
The initiative aligns with the 2025–2029 National Medium-Term Development Plan (RPJMN) and Indonesia’s Vision 2045, specifically targeting accelerated economic growth, poverty and inequality reduction, and environmental sustainability.
ADB operates as a multilateral development bank dedicated to fostering sustainable, inclusive, and resilient growth across the Asia-Pacific region. The institution works alongside member countries and regional partners to resolve complex development challenges through targeted financing and strategic collaboration.
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