WB helps Bangladesh build economic resilience

The government and the World Bank (WB) on Monday signed a $250 million financing agreement to support the country’s reform efforts to sustain growth following the Covid-19 pandemic and to enhance resilience to future shocks, including climate change.

The Bangladesh First Recovery and Resilience Development Policy Credit--the first in a series of two credit--will help Bangladesh build a stronger fiscal and financial sector to sustain growth. It will help streamline the bank recovery framework with all scheduled banks to update recovery plans annually.

The program supports the legislative framework on payments, which will contribute to a more efficient financial system. The program supports adjustments to the interest rates of public savings instruments such as the National Savings Certificates.

Mercy Tembon, World Bank Country Director for Bangladesh and Bhutan, said, “Bangladesh has made a robust economic recovery from the Covid-19 pandemic.”

“This program will further support the government’s policies to make the economy more resilient and competitive as Bangladesh strives to become an upper-middle income country by 2031,” Mercy Tembon added.  

The cancellation of 8,451 MW of investments in coal-fired electricity generation projects will accelerate the country’s transition to decarbonization and a green economy. The revised National Building Code will help the country reduce greenhouse gas emissions by improving energy efficiency in buildings.

 The program will support the National Tariff Policy to modernize taxes and foster a globally competitive export industry. It will help to better leverage digital technologies and enable non-resident firms to submit VAT returns. The increased coverage of the electronic government (e-GP) system will improve efficiency of public procurement.

It will also support the coverage, speed, and efficiency of social protection programs to help the government rapidly respond to extreme climate events such as floods and cyclones.

By using the government-to-person payment platform for cash transfers, the government can identify new and existing beneficiaries for emergency assistance while also capturing gender-disaggregated payment data.

The credit is from the World Bank’s International Development Association (IDA), which provides concessional financing, has a 30-year term, including a five-year grace period. Bangladesh currently has the largest ongoing IDA program totaling 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.