WB loan to help Bangladesh sustain post-Covid growth

The World Bank has approved a $250 million financing to help Bangladesh strengthen its policies to sustain growth following the pandemic and enhance resilience to future shocks.

The Bangladesh First Recovery and Resilience Development Policy Credit — the first in a series of two credits — 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, the World Bank said in a release.

“Since 2020, the World Bank has provided over $3 billion to Bangladesh to support emergency response, vaccination, and other Covid-19 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 also 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, according to the World Bank.

The programme also supports adjustments to the interest rates of several public savings instruments, bringing them closer to the market to reduce distortions.