South Korea to provide $50m in budget support
South Korea has agreed to provide $50 million in budget support to Bangladesh to help the country continue its fight against the coronavirus pandemic.
In June, Bangladesh had urged the South Korean government for financial aid amid the crisis.
And recently, the South Korean embassy in Dhaka informed both the finance and the foreign affairs ministries that Seoul has accepted Bangladesh's request.
As such, the government of South Korea will provide $50 million loan under the Economic Development Cooperation Fund to help Bangladesh address the Covid-19 fallout.
The embassy has requested the government to complete the official procedures needed to finalise the loan agreement, which will be disbursed through Korea Eximbank.
"I am confident that this provision will lend adequate support for Bangladesh's fight against the Covid-19," said Lee Jang-keun, South Korean ambassador to Bangladesh, in the letter.
"I would like to assure you of Korea's firm solidarity with the people of Bangladesh in this joint fight against the pandemic."
Bangladesh has so far received more than $2 billion as financial support from its various multilateral and bilateral partners to recover from the economic downturn.
This includes aid from the World Bank, the International Monetary Fund, and the Asian Development Bank.
The IMF is providing $732 million as emergency assistance, the largest financial support provided by any entity to Bangladesh to deal with the Covid-19 fallout.
The ADB provided $608 million as budget support and technical assistance, and the fund has already been deposited to the government treasury.
The ADB extended the support to Bangladesh to help the country address its immediate public health requirements.
The Manila-based lender funded the immediate procurement of equipment and supplies needed for testing and upgrading the country's medical infrastructure.
It also helped develop a system and community capacities for surveillance, prevention and response to the pandemic.
The WB is providing more than $600 million to help the country take preventive measures amid the global pandemic.
Of the assistance, $100 million was used to help Bangladesh prevent, detect, and respond to the Covid-19 pandemic and strengthen its national system for public health emergencies.
The remaining $500 million is for providing budget support for different projects.
The government has sought $1 billion from the Japan International Cooperation Agency (Jica). Officials of the Economic Relations Division said they were hopeful about getting support from the Jica.
Besides, the government is seeking financial assistance from its development partners to procure Covid-19 vaccines as soon as it hits the international market.
The ministry estimates that Bangladesh might need between $1.65 billion and $2 billion to vaccinate the 165 million people in the country.
The ERD sought $500 million from the WB, $500 million from the ADB, $500 million from Japan and $200 million from the Asian Infrastructure Investment Bank to purchase, store, transport and distribute the vaccines.
Bangladesh needs external financing to implement its $14 billion stimulus packages introduced to help its people cope with the losses caused by the pandemic. The packages are equivalent to 4.03 per cent of the GDP.