ADB to increase annual aid package by 33pc

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FE Team | Published: July 24, 2009 00:00:00 | Updated: February 01, 2018 00:00:00

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FE Report
Asian Development Bank (ADB) is going to increase the annual assistance package to Bangladesh by 33 per cent to $800 million annually for 2009-11 period, said its president Haruhiko Kuroda on Thursday.
The country in 2006-08 period had a package of annual $600 million from the multilateral lending agency.
The bank is planning to provide support to Bangladesh from the newly established $3.0 billion Countercyclical Support Facility fund to scale up development programmes in response to the global crisis, he said at a press briefing following his meetings with the prime minister and finance minister.
"The amount will be used particularly for infrastructure development and strengthening social safety nets to cushion the impact on the poor and vulnerable," he added.
The ADB president came to Bangladesh on Thursday on a two-day trip and met ministers, senior government officials and members of the civil society.
The country has escaped the first round of shock of the recession partly due to its long track record of prudent macroeconomic management, Mr Kuroda said.
He, however, said Bangladesh has now begun to feel the second round effects of the global slowdown through slower growth of export, remittance and revenues and declining import.
"I think the worst part is over and from the next year there will be a turnaround," he said.
Bangladesh is expected to have 5.0 to 6.0 per cent growth rate for the current fiscal year, he added.
The ADB is planning to place an additional $10 billion to supplement its assistance to developing member countries over 2009 and 2010 periods and it has also established the $3.0 billion fund to counter the immediate adverse impacts of the crisis and help sustain longer-term economic growth, Mr Kuroda said.
The bank has raised its capital base three-fold to respond to the global economic crisis and to the region's longer term development needs. He said.
The new government is committed to continuing with critical reforms, particularly to scale up infrastructure investment, that will benefit the people, the ADB president said.
"Infrastructure is essential for faster and more inclusive economic growth and the ADB is encouraged by the new government's commitment to continue reforms," he said.
The ADB is committed to working in close partnership with the government to develop both basic physical infrastructure such as roads, bridges, railways, power and energy development, and social infrastructure for health and education, and water supply and sanitation, he added.
Mr Kuroda said the government should take strong measures to improve governance and law and order.
"Unless these aspects are strengthened, they will become obstacles to private investment, both domestic and foreign, which is critical for sustaining and increasing economic growth and reducing poverty," he said.
The government is keen to move forward with private sector development through public-private partnerships and the ADB is also keen to assist, he added.
He said: "I am pleased that, for the first time, an active policy of private sector development through public-private partnerships has been announced in the FY2010 budget. The government is keen to expeditiously move forward on this agenda, and ADB is keen to assist."
The ADB president urged the South Asian nations to enhance sub-regional cooperation to capture economies of scale, build on complementarity among neighbouring countries, and ensure regional economic and financial stability.
"These measures will also help Bangladesh draw much needed private sector investment," he said.
The Manila-based bank is ready to assist in regional cooperation in transport and power sectors as it will improve the socio-economic condition of the region, he added.
Climate change is particularly important for Bangladesh as it is on the front lines in dealing with the impacts, Mr Kuroda said.
"All ADB projects in Bangladesh are designed to mainstream climate change and we have also prepared the Bangladesh Climate Change Implementation Plan, and are providing a $2.0 million grant to support a variety of related initiatives," he said.
Bangladesh is one of eight countries selected to participate in the Pilot Programme for Climate Resilience.
This joint initiative of the multilateral development banks, including ADB, will provide Bangladesh with about $50 million grant to test new approaches to integrating climate change dimensions into core development planning, he added.
Collaboration between Bangladesh and ADB has increased substantially since the country became a member in 1973 and is one of the largest recipients of concessional Asian Development Fund resources, the president said.
"Over the years, ADB has provided Bangladesh with $9.86 billion in loans and $183.16 million in technical assistance, and we have seen excellent results," he said.
The bank has a long and active presence in Bangladesh, partnering to the government on a range of poverty alleviation and infrastructure development projects. Among the key development initiatives, it is currently involved in the design and construction of the Padma Bridge, and the programmes to help mitigate the impact of climate change.
Mr Kuroda was elected President of ADB's board of governor in 2004 and reelected in November 2006 for a new five-year term.