Slow reforms delay $1b fund
The release of the World Bank's budget support of $1 billion will be deferred from the current fiscal year to the next due to slow progress in government reforms, especially in telecoms.
As the fund was to be disbursed in three fiscal years starting in the current year, the government had earlier estimated that $300 million to be available this year would be used for the current annual development programme, finance ministry officials said.
The government will now manage the outlay from other allocations of the WB. Both the finance minister and the development partner have confirmed the delay in fund disbursement. Earlier this month, the government in its revised ADP cut more than Tk 3,000 crore from project aid, but budget support remained the same.
The finance ministry officials said the WB objected to the draft telecoms and mobile phone operators' licence renewal policy.
Under the proposed telecoms guideline prepared by the telecom regulator, Grameenphone, Banglalink, Robi and Citycell will have to pay a combined Tk 28,000 crore in spectrum charges during their licence renewal this year. The operators and telecom analysts said the fees are too high and irrational.
Last week, the WB country director and other officials held a meeting with Finance Minister AMA Muhith to discuss the overall reform programmes, especially the telecoms policy, the ministry officials said.
WB Country Director Ellen Goldstein said to The Daily Star: "Recently, at the request of the government, the World Bank agreed to postpone the first credit until the next fiscal year in order to better assess progress on reforms relating to macroeconomic management, governance and anti-corruption and telecommunications policy and licence renewal."
Meanwhile, the issues of Grameen Bank and its founder Prof Muhammad Yunus came up during the credit talks last week with the WB and another development partner, the IMF. A team of the International Monetary Fund (IMF) concluded talks with the government last week over the $1 billion loan as Extended Credit Facility.
Both the WB and IMF teams separately met the finance minister and talked about the Grameen and Yunus issues. After the meetings with the two development partners, Muhith said: "On Grameen Bank they (WB, IMF staff) say 'many of our members have interest about Grameen Bank; so you take care of it'.”
However, the World Bank country director told The Daily Star that decision-making about Grameen and Yunus is largely a Bangladeshi affair, which requires careful consideration.
Goldstein said Bangladesh is known worldwide as a pioneering nation in innovative approaches to poverty reduction, including through microfinance. Grameen and Yunus have emerged as symbols of Bangladesh's innovative and successful track record of poverty reduction and development, she said.
“Careful review is warranted to see how best to reinforce positive perceptions and nurture this home-grown institution, and we would expect the findings of the review currently underway to provide valuable information to the government and general public," Goldstein said.
"Decisions taken now in Bangladesh will have an echo worldwide which merits some reflection as the country seeks to increase public and private investment in order to accelerate growth and ensure a prosperous future for its citizens," she said.