Staff Reporter :
The World Bank (WB) has agreed to give budgetary support to Bangladesh after five years of discontinuation.
Apart from other development assistance, the multi-lateral lending agency will give $500 million as budget support in the next fiscal year 2015-16, Finance Minister AMA Muhith told reporters at the sideline of the WB-IMF Annual Meeting started on Friday in Washington DC (Local Time).
WB Chairman Patrick Pruaitch, its President Jim Yong Kim, and IMF Managing Director Christine Lagarde addressed, among, others at the inaugural session of the meeting.
In the 3-day conference, attended by finance ministers, central bank chiefs and top officials of 188 countries, the WB and the IMF will finalise their plans for the next one year.
Finance Minister AMA Muhith is leading the Bangladesh delegation at the WB-IMF Annual Meeting.
Earlier, the Finance Minister in Dhaka said that he would discuss the issue of $500 million budget support from the WB on the sidelines of the WB-IMF annual meeting. Muhith expects the agreement to be signed this fiscal year and the amount may be released next fiscal year.
In the last annual general meeting of the WB-IMF in 2013, the Finance Minister requested the WB for extending budgetary support for Bangladesh.
Officials of the External Relations Division (ERD) in Dhaka said that Bangladesh government well get the budget support from the WB on reforms of various areas in governance.
“The government will have to carry out a new round of reforms in various sectors to get the loan,” a senior ERD official told The New Nation on Condition of anonymity.
He said, the WB will also set priority sector to provide the budgetary support.
“The government recently approached for $1.5 billion fund from the WB and IMF for the budget financing in the next fiscal year,” he said, “The officials of WB during a meeting held in Dhaka assured us to provide the fund. And now their promise translated into the reality following announcement of the Finance Minister”.
The ERD official also said, a WB team in August visited Dhaka for reviewing necessity of budgetary support credit for the government.
He further said, discussions on another $1.0 billion loan will begin after the government gets the last instalment of a $1 billion IMF loan under its extended credit facility (ECF) next year.
“We’re hopeful of getting the fund from the IMF to be utilized as deficit financing,” he added.
According to him, the WB last provided $200 million budgetary support in 2008 for the Bangladesh to meet deficit financing of the national budget in the aftermath of a devastating cyclone and two consecutive floods in 2007.
During the Awami League government’s last tenure, they wanted budget support from the WB, but did not get it, as the global lender had various reservations about governance-related issues.
