This and a second trade adjustment loan in 1988 support the reduction of government expenditures and the liberalization of Indonesia's trade and regulatory environment.
Following a period of rapid growth in the 1970s, economic difficulties emerged in the early 1980s in Indonesia primarily due to the collapse of oil prices. The country addressed its diminishing export income through expenditure reduction and the liberalization of its complex trade and regulatory environment. The World Bank Group's First Trade Policy Adjustment Loan is designed to support these initiatives; a second Trade Policy Adjustment Loan will be approved by the Bank Group in August 1988 for the same purpose. These two loans are ex post in the sense that they are granted in response to actions that were already taken by the Indonesian government.
The memorandum summarizes Indonesia's current economic situation and outlook and describes recently announced trade policy reforms (1058846).
The introduction of adjustment lending to Indonesia is described on pages 34-35 of the transcript.
The project profile contains an overview of the project, financial details, and a list of project documents related to the project.
The report evaluates the completed project and describes implementation issues. The Project Completion Report, also included, describes the project's impacts.
The report describes in detail the trade policy adjustment loan and the policy reforms that the government has agreed to implement as a condition of lending.