Govt still wants cheap WB funds as budget support

The government is seeking to borrow $500m under the World Bank’s Development Policy Credit (DPC) programme in the next fiscal year, Finance Division sources said. The Economic Relations Division started negotiating with World Bank for the loan when this government came to power in 2009. But the global lender has not approved the loan, citing the government’s failure to carry out prescribed reform. Macro economic wings of Finance Division recently sent a letter to ministries and divisions seeking information about reforms taken by different ministries and divisions as conditions set by the World Bank. Officials said the government agencies concerned would try to get the World Bank’s soft loans to the last, but there are still shortcomings related to reforms at the power and telecommunication ministries. “We are in doubt if the government will get Development Policy Credit,” official said. According to the sources at the Power Division, the National Board of Revenue, power and telecom ministries have failed to complete major reforms within the deadline. The World Bank conditions include implementation of power ministry’s proposal to create companies in Chittagong, the new VAT law of the NBR and amendment to the Bangladesh Telecommunications Act 2001. The government rejected the World Bank projects aimed to improve performance of the state-run banks by automating the business and transaction process. Besides, the government is set to lay down an ambitious foreign aid utilisation target for next fiscal year with the aim of quick implementation of many transformational infrastructure projects. Foreign aid will account to about $7bn in fiscal year 2017-18’s development budget, said officials of finance and planning ministries -- almost double the country’s overseas fund utilisation record. Bangladesh could never utilise more than $4bn of foreign aid in a year. Some Tk35,797 crore of foreign aid has been allocated for this fiscal year but only 42% of the amount could be utilised in the first nine months.