WB urged to increase budget support under ongoing schemes

Bangladesh has proposed that the World Bank increase the volume of ongoing budget support schemes instead of offering new and separate ones, according to officials after a meeting with the Washington-based lender's South Asia Vice-President Martin Raiser on Monday.  

Economic Relations Division officials said budget support talks dominated the discussions on the first day of Martin Raiser's three-day visit to Bangladesh.

The global lender will provide Bangladesh with a $250 million budget support from the "Bangladesh Second Recovery and Resilience" credit scheme. Besides, there have been talks about another $250 million from the "Bangladesh Green, Resilient and Inclusive Development Policy Credit" programme.

The government sought $1 billion more in budget support from the World Bank in late June to counteract the fallout stemming from the Russia-Ukraine war. 

The ERD officials said new budget aid will require new rounds of negotiation over terms and conditions. On the other hand, increasing the allocation under the ongoing schemes could make the loan process easier.

Although there was no immediate reaction to the proposal for a raise in the aid volume at the meeting, the Economic Relations Division is hopeful about getting the World Bank's response soon.

Apart from budgetary support, the officials said the introductory first day meeting also discussed a speeding up of loan disbursement.

The World Bank vice-president laid stress on a streaming of fund disbursement and joint efforts to settle disbursement related issues.

Among others, Prime Minister's Principal Secretary Ahmed Kaikaus and Economic Relations Division Secretary Sharifa Khan were present at the meeting at the NEC Conference Room in Dhaka's Sher-e-Bangla Nagar.

In a separate development on Monday, another World Bank team led by Regional Director Mathew Verghis met with State Minister for Planning Shamsul Alam.  

They discussed the current state of Bangladesh's economy and outlook, key reform areas for the government to accelerate growth and strengthening public investment management.

"The World Bank is assessing the economic condition of Bangladesh before providing budget support. This meeting was held as part of this," the state minister told journalists after the meeting.

He said the team inquired about the country's macroeconomic condition, forex reserve, inflation, value-added law reform, progress in making the Central Procurement Technical Unit the procurement authority and slow pace in project implementation.

"The depleting reserve is a challenge. But export growth and remittance inflow still put us in a comfortable zone," said the state minister.

He also said the inflation surge is due to external effects and the inflationary pressure would ease up soon.  

"We have the economic situation under control, but we need budgetary support to maintain the forex reserve. We need a lot of foreign borrowing and direct investment."

He said efforts are on to speed up project implementation since Bangladesh focuses on green growth. 

"However, management inefficiency still remains the biggest challenge in project implementation," he added.