Govt seeks more cheap loans from WB
The government yesterday sought more loans in concessional terms from the World Bank despite being the largest recipient of such funding as well as more budget support as it looks to shake off the impacts of the pandemic and the Ukraine war.
The call came during Finance Minister AHM Mustafa Kamal's meeting with Martin Raiser, the WB's vice-president for the South Asia region, and Abduoulaye Seck, the incoming country director for Bangladesh and Bhutan.
In IDA20, the World Bank Group's ongoing concessional lending cycle for the world's 74 poorest countries, Bangladesh would be receiving $6.15 billion, up 29.5 percent from IDA19.
It is 6.5 percent of the pot of $93 billion raised for the three-year lending programme starting from July 2022 and ending in June 2025, which is the highest allocation for a single country.
And yet, the government is seeking a bigger share of the pie as well as more budget support, according to people informed on the contents of the WB delegation's meetings throughout the day.
Earlier in the day, Raiser met with the Economic Relations Divisions, where he was briefed on the impacts of the Ukraine war on the Bangladesh economy.
Because of the war, the prices of 6-7 items have spiralled, which meant an additional $820 million had to be spent on imports, the ERD officials told the WB delegation.
Subsequently, the government sought an additional $1 billion in budget support earlier in June.
This fiscal year, Bangladesh is expected to receive $500 million from the WB in budget support, said a press release from the finance ministry. The same amount is expected next fiscal year.
In exchange for the funds, the Washington-based multilateral lender has put forward 12 reform actions pertaining to the economy and mitigating the effects of climate change.
The government is yet to fulfil any of the conditions, which encompass reforms in fiscal policy and the financial sector and setting guardrails to future shocks.
In response to Kamal's request, the WB delegation said more funds would be made available as soon as Bangladesh starts implementing the reforms stipulated.
Prior actions are needed to get these funds released as they are not tied to any infrastructure project.
Kamal told Raiser that the reforms are at various stages of implementation.
Between 2019 and April this year, the WB has provided $1 billion in budget support, according to the finance ministry press release.
Also at yesterday's meeting, Kamal asked the WB to sync its Country Partnership Framework for fiscals 2022-23 to 2026-27 with the 8th Five Year Plan, Vision Plan and Delta Plan and the other government master plans, sectoral plans and policies such that Bangladesh can reach its goal of becoming a developed country by 2041.
Kamal also thanked the WB for providing technical assistance to a project named "Beautification of Dhaka" involving the restoration of rivers around Dhaka city and improving their navigability of rivers around Dhaka city and enhancing the beauty of Dhaka.
Besides, he also discussed the progress of various projects under implementation with WB loans.