Govt looks beyond regular WB aid for $10b to ease economic, subsidy shocks
Negotiation with IMF for $4.5b in loan ongoing, says finance minister
Bangladesh is seeking an additional $10 billion in loans from the World Bank over the next three years, beyond its regular assistance, to cover rising energy subsidy costs and ease broader economic pressures.
The request was raised at a meeting between a Bangladesh delegation and World Bank officials yesterday, the opening day of the World Bank-IMF Annual Meetings in Bangkok.
The government is also working to finalise a three-year Country Partnership Framework (CPF) with the World Bank. The framework will outline the lender's support for Bangladesh, including the proposed additional financing.
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After the meeting, Finance Minister Amir Khosru Mahmud Chowdhury told reporters that the World Bank has pledged to help Bangladesh. However he did not mention the amount Bangladesh had sought.
A senior finance ministry official, who attended the meeting told The Business Standard, requesting anonymity, that Bangladesh had sought an additional $10 billion.
The delegation also included Prime Minister's Economic Adviser Rashed Al Mahmud Titumir, Bangladesh Bank Governor Mostaqur Rahman, and other senior officials.
Khosru further said oil and gas prices have risen in Bangladesh in line with global market trends amid the war in the Middle East, increasing the government's subsidy burden.
He said the bank would help create a financial safety net over the next two to three years to ease current economic pressures. Work is under way to finalise the CPF, which will set out a clear framework for future cooperation.
On the prospect of additional loans, Khosru said Bangladesh could secure further financing to manage the higher costs arising from elevated global oil and gas prices. A World Bank delegation is expected to visit Dhaka soon to finalise the discussions, he added.
$4.5b from IMF
Bangladesh is also discussing with the IMF how to implement the conditions attached to its proposed $4.5 billion loan in phases rather than all at once.
The finance minister said the government believes the conditions could be adjusted through mutual discussions to reflect Bangladesh's economic realities.
On whether the conditions would be difficult to implement, he said negotiations are under way on specific conditions and that adjustments could be made through dialogue.
"The government is prioritising phased implementation instead of undertaking numerous reforms simultaneously," he said.
Meetings with the IMF on the conditions will continue over the next two days, he added.
The minister further said Bangladesh's own economic plans do not differ significantly from the reform programmes proposed by the World Bank and the IMF.
The government remains optimistic that outstanding issues could be resolved through negotiations and mutual understanding, he added.
Earlier, Bangladesh's decision to move away from its existing IMF loan programme stemmed from disagreements over the reform conditions attached to the $5.5 billion facility secured under the previous administration.
Bangladesh had received approximately $3.6 billion under the previous programme before the government sought to suspend the arrangement and negotiate a new one.
It has since pursued a fresh IMF loan package of around $4 billion to $4.5 billion, with reforms to be implemented in phases in line with the government's priorities.
IFC interested in bank recapitalisation
The finance minister also said the International Finance Corporation (IFC), the World Bank Group's private-sector arm, has expressed interest in supporting bank recapitalisation.
Private equity investors have also responded positively, he added.
Governor Mostaqur said Bangladesh will need to allocate Tk60,000 crore annually from the national budget over the next five to eight years to address losses in the banking sector.
Responding to a question on the estimated requirement, Khosru said the government had already allocated funds for the process. However, meeting the sector's capital needs solely through public financing would be difficult.
The minister expressed confidence in the banking sector's recovery, claiming that concerns among depositors had subsided and that deposits are returning to banks.
He also said the stock market is showing signs of recovery and foreign investors are again expressing interest in investing in Bangladesh.
WB launches philanthropy platform
The World Bank Group yesterday formally launched a new platform called the Philanthropy Hub to mobilise the funding, expertise and global networks of philanthropists and charitable organisations for development initiatives.
The global lender said the initiative would help innovative ideas and pilot projects expand to a larger scale. It also signed memorandums of understanding with the Asian Venture Philanthropy Network (AVPN) and Temasek Trust to strengthen cooperation on priority development projects, including sustainable healthcare.
The initiative aims to accelerate sustainable development worldwide by leveraging private and philanthropic funding, expertise and networks amid constraints on public resources.
