The World Bank (WB) is going to provide USD 500 million budgetary support to Bangladesh for the next fiscal year, sources at the Economic
Relations Division (ERD) told The Independent on Thursday.
The government has to utilise the money in three segments – social safety net programme (SSNP), capacity building of disaster management ministry and its staff and preparing a poverty database. Sources said USD 430 million would be earmarked for the SSNP, USD 40 million for preparing a poverty database and USD 30 million for the capacity building programme. The government’s negotiation with the WB ended on Wednesday and it will be approved by the bank board by June, they added.
ERD additional secretary Arostoo Khan said the WB would provide the amount as budgetary support for the next fiscal year, based on the performance of the poverty reduction programme.
During finance minister AMA Muhith’s visit to Washington in February, a senior official at the WB headquarters informed the minister that the WB had decided to increase the amount of credit for SSNP. The allocation has been hiked from USD 300 million to USD 500 million and it will be presented to the Board in September.
The finance minister was also informed that Bank would try to prepare projects that could provide indirect budgetary support to Bangladesh. Besides, the official informed that the USD 1.2 billion IDA loan that was cancelled after being allocated for the scam-tainted Padma bridge project will be restored to Bangladesh through other projects.
The WB postponed the budgetary support for Bangladesh for the last three years citing different excuses, including corruption, the sources added.
During the caretaker government, the WB had provided two budgetary support programmes worth USD 320 million to assist the government implement its wide-ranging governance and economic policy and energy reforms in 2008.
Of the funds, USD 200 million was provided as Transitional Support Credit (TSC) to help lessen pressure on the 2007-08 budget and the rest for power sector reforms.
But in 2011, the WB and the International Monetary Fund did not provide the government over USD 500 million of budgetary support during the current financial year because of concerns over governance issues, including anti-corruption and telecom licensing, the sources said.
-With The Independent input
