Over the next four years, the World Bank Group will provide Bangladesh with more than $2 billion annually to assist the country in preparing for its next phase of development.
The World Bank Group (WBG) is preparing Bangladesh’s Country Partnership Framework (CPF) for FY 2023-2027. The Framework will outline the World Bank Group’s overall support for Bangladesh over the next four years in order to achieve the country’s development and growth goals, as well as provide a loan of $8 billion over the next four years.
The new country partnership framework (CPF) for 2023-27, which will be approved by the WB board prior to Prime Minister Sheikh Hasina’s visit to Washington, D.C. to commemorate 50 years of partnership with the multilateral lender, outlines the lending plan over the next four years.
The $8 billion loan to attain various objectives and projects
In recent years, the World Bank has committed up to $2 billion annually ($8 billion in 4 years). The government’s eighth five-year plan is the foundation for the impending CPF, which has been developed in consultation with a wide range of stakeholders.
It will have eight objectives to increase private sector employment, improve socioeconomic inclusion, and strengthen climate resilience. “The WBG anticipates robust engagement during the CPF period,” stated the preliminary document submitted to the board for approval.
It is anticipated that the annual allocation from the International Development Association (IDA), the World Bank arm that provides concessional financing to impoverished nations, will fall within the range of $1.5 billion to $2 billion per year.
“Together with a current balance of about $8.24 billion to be disbursed under the existing projects, this offers an opportunity for series of transformational projects across key sectors,” the document reads.
The impacts of projects and investments
The modernization of public sector operations, the acceleration of learning in secondary school, and the construction of an economic corridor centered on the Jamuna River are just some of the transformational projects planned. In addition, the International Finance Corporation (IFC), a division of the World Bank that assists in the development of the private sector in developing nations, will endeavor to increase its investment program to $900 million annually, including mobilization.
The Multilateral Investment Guarantee Agency (MEGA), a division of the World Bank that encourages investment in developing nations by providing insurance against political and economic risk, will continue to support its existing portfolio of $1.1 billion in gross outstanding exposures in the energy and manufacturing sectors.
In collaboration with the IFC, MIGA will look for opportunities to use its trade finance support instruments as well as its guarantee instruments to support foreign direct investment in the country. The WB stated that promoting the entry of new firms into markets and their development will help to diversify the private sector.
Consequently, it will assist Bangladesh in developing a diversified and competitive private sector by fostering the development of new enterprises and Foreign Direct Investments (FDI). It will support necessary reforms and use its instruments to facilitate the market entry of new domestic and international firms by simplifying regulations.
During the CPF, the WB will also strive to promote the efficient and sustainable use of energy resources. “The recent energy crisis in Bangladesh underlines the vulnerability of the sector due to high dependency on fossil fuels,” it said.
In addition to the new CPF, the WB board will authorize a $500 million budget support and a $250 million new initiative.
An enhanced relationship between WB and Bangladesh with HPM’s visit
During Sheikh Hasina’s visit to Washington on May 1, loan agreements for three projects totaling $1.53 billion will also be signed. On May 1 at the WB headquarters in Washington, DC, the lender will present the results of its collaboration with Bangladesh, which has enabled the country to achieve lower middle-income status in less than four decades since its independence.
In addition to speaking at the meeting of the WB board of directors and participating in a panel discussion, HPM Hasina would also deliver a speech.
Government policymakers and economists believe that Sheikh Hasina’s visit to Washington will pave the way for a new relationship between Bangladesh and the World Bank. According to them, the tension in the relationship between the World Bank and Bangladesh regarding the financing of the Padma bridge will be entirely resolved by attending an event hosted by the organization’s president, David Malpass.
The two dreams of Bangladesh, achieving sustainable development goals by 2030 and building a developed and prosperous Bangladesh by 2041, will be facilitated by this positive relationship.
Aids provided by WB so far
The financing of the Padma Bridge strained relations between Bangladesh and the World Bank approximately ten years ago. Bangladesh’s relationship with the World Bank has not significantly deteriorated, despite the absence of a loan for the Padma bridge’s construction. The development agency continues to fund a variety of Bangladeshi initiatives. In addition to what was intended for the Padma Bridge, it has likewise funded other initiatives.
In the past fifty years, the World Bank has provided Bangladesh with a total of $3,800 crore (38 billion dollars). This money has been utilized to alleviate poverty and development. This multilateral organization has also provided funding for the construction of major infrastructures, such as roads and buildings.
Aside from this, the World Bank has provided funding for decades to a variety of sectors, such as education, health, social security, environmental protection, and employment. The World Bank has currently invested $1.6 billion in 57 ongoing initiatives.
In the 1970s, the World Bank primarily funded initiatives for rehabilitation and reconstruction. In the 1980s, it made substantial investments in the agricultural sector. From 1978 to 1994, it provided economic and trade sector reforms with financial and technical assistance.
The World Bank is funding two significant infrastructure projects in Bangladesh. These are the Bangabandhu Multi-Purpose Bridge (Jamuna Bridge) and the Dhaka-Chattogram highway (two lanes) construction projects. With WB’s assistance, a total of 1,600 kilometers of rural roads were constructed in 26 districts.