Bangladesh gets $250m WB loan to sustain post-pandemic growth

The World Bank on Friday approved $250 million in financing to help Bangladesh strengthen policies to sustain growth following the Covid pandemic and to enhance resilience to future shocks. 

The Bangladesh First Recovery and Resilience Development Policy Credit, the first of two credit programmes, supports fiscal and financial sector policies to enhance macroeconomic stability and sustain growth. It supports expanding and modernising social protection programmes and energy sector policies to improve efficiency and reduce greenhouse gas emissions. These actions will help the country build resilience against future shocks, including climate change, says a press release.
 
"Since 2020, the World Bank has provided over $3 billion to Bangladesh to support emergency response, vaccination, and other Covid recovery efforts," said Mercy Tembon, World Bank country director for Bangladesh and Bhutan. "This credit will further accelerate the government's endeavours to strengthen its policies and regulatory framework to pave the way for a green, resilient, inclusive recovery and low-carbon growth."
 
This programme supports the development of the National Tariff Policy, which will help modernise trade taxes. New policies also enable foreign firms, including non-resident digital services companies, such as the search, social media, and cloud services firms, to submit VAT returns and make payments. Expanded coverage of the national e-Government Procurement (e-GP) system will increase the efficiency of public expenditure.
 
The financing will help streamline the bank recovery framework. All scheduled banks will prepare recovery plans, which will be updated annually. New legislation will be prepared to strengthen the stability and efficiency of payment and settlement systems, which will also foster digital and mobile financial services. The programme supports adjustments to the interest rates of several public savings instruments, bringing them closer to the market to reduce distortions. 
 
This programme will help the government rapidly scale up cash transfer programmes to respond to future shocks and to expand the use of the government-to-person payment platform for cash-based programmes. This will allow the government to respond more quickly to climate-related crises, including floods and cyclones, by identifying and targeting new and existing beneficiaries for emergency assistance. 
 
The credit is from the World Bank's International Development Association (IDA), which provides concessional financing, with a 30-year term, including a five-year grace period. Bangladesh currently has the largest ongoing IDA programme totalling over $14.5 billion. The World Bank was among the first development partners to support Bangladesh and has committed $35 billion in grants, interest-free, and concessional credits to the country since its independence.