Bangladesh seeks $2.0b from World Bank, ADB to stabilise economy

[Black_cats]

Bangladesh seeks $2.0b from World Bank, ADB to stabilise economy​

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FE ONLINE DESK | Published: July 29, 2022 10:43:38 | Updated: July 29, 2022 11:18:21

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The government has requested $2.0 billion from the World Bank and the Asian Development Bank in budget aid to prop up the economy on the edge due to the Ukraine-Russia war following the pandemic.

Bangladesh asked for fund assistance of $1.0 billion from the ADB and $750 million from the World Bank and another $250 million from its fund for the countries affected by climate change, according to Economic Relations Division officials, reports bdnews24.com.

The government also applied to borrow $4.5 billion from the International Monetary Fund or IMF.

Md Abdul Baki, additional secretary at the ERD’s World Bank Wing, said: “We’ve forwarded a plan to the World Bank seeking $25 million assistance in each of the next three fiscal years.”
Bangladesh is likely to finalise a structure for the fund assistance in a meeting with the World Bank slated for October.

In the 2020-21 financial year, the government reached an agreement for $500 million to combat the impact of the COVID-19 pandemic, but the World Bank has released $25 million so far. The rest of the fund will arrive this financial year.

Pear Mohammad, additional secretary at the ERD’s ADB Wing, said the $1 billion assistance from Bangladesh’s Asian development partner is to balance out the potential impact of the global food price hike on the economy.

He added that Bangladesh applied for the fund in April. “The ADB has not said anything conclusive so far. But we're hoping that they will soon let us know.”

The government will table a $500 million or a $250 million per fiscal year plan.

Before this, the ADB agreed to deliver $940 million in funds to combat the pandemic.

Pear said the lending agency is yet to release another $250 million as part of the agreement, which will arrive in the first half of this financial year.

Bangladesh seeks $2.0b from World Bank, ADB to stabilise economy

The government has requested $2.0 billion from the World Bank and the Asian Development Bank in budget aid to prop up the economy on the edge due to the Ukraine-Russia war following the pandemic. Bangladesh asked for fund assistance of $1.0 billion from the ADB and $750 million from the World...

thefinancialexpress.com.bd

 

[Imran Khan]

Good to see

 

[LakeHawk180]

I know for a fact that as a consequence of this a lot of Bangladeshi companies are quickly restructuring and professionalising their businesses to improve investment attractibility to WB and ADB.

Probably a good thing in the long run if WB decides to extend aid.

 

[Bilal9]

Well this is in addition of the $4.5 Billion from IMF.

What is spooking these people?

The fading prospect of stealing more money?

 

[UKBengali]

"prop up the economy on the edge"


No BD economy is not on the "edge" as they say.

BD government can slash areas of public spending as alternative but it thinks that cheapish loans are a better option.

The country is in no way in a dire crisis and the money it is looking for is just 20% of its total foreign currency reserves.

 

[Destranator]

Well this is in addition of the $4.5 Billion from IMF.

What is spooking these people?

The fading prospect of stealing more money?

My prediction was the govt would trigger the panick button as soon as the reserves deplete below the $40 billion mark (keeping in mind that our imports last financial year was $80 billion+) - this is exactly how it has turned out.
The govt is being proactive by lining up forex support rather than wait until the well is completely dry. Having said that, Kamal chora must be replaced by a competent finance professional with solid experience in macroeconomic and fiscal management. We cannot have an incompetent fraud in charge of fiscal policy-making. This dude forces the bureaucracy to dish out misleading propaganda to paint a rosy picture.
It was only a few weeks ago when he said we don't need external forex support and look where we are now.

 

[bluesky]

Well this is in addition of the $4.5 Billion from IMF.

What is spooking these people?

The fading prospect of stealing more money?

This year, the country will pay back $2.5 billion to its lenders. So, the net amount to be received is {($4.5 b + $2 b)} - $2.5 b = $4.0 billion. Please note that this $2.5 billion repayment will rise between $4 billion to $5 billion after 2026.

BD cannot repay this amount with just its additional export earnings. If the country cannot collect more amount of taxes, but a huge amount of dollars is bought from the market/ BB by the GoB with printed paper money, it will initiate heavy inflation each time it is done.

It has already started this year. We are already seeing the result of borrowing money to eat Polua and Kopta.