WASHINGTON, DC: Oct 10: The World Bank (WB) is expected to provide Bangladesh with $500 million in budgetary support for the next fiscal year (FY).
Finance Minister AMA Muhith expressed his hope here on Saturday that the WB would provide the budgetary support from the FY 2015-16.
His ministry would send a letter to the WB seeking the funding support from the multilateral bank shortly.
Mr Muhith was talking to a group of visiting journalists at the office of the Alternative Executive Director (AED) of the WB, after attending the inaugural session of the WB-IMF annual meeting.
The three-day annual meeting began on Friday in the US capital. It is scheduled to conclude on Sunday (today). About 188 finance ministers and central bank governors from the member countries of the WB and the IMF are attending the annual meeting. It is the 70th anniversary of the two international institutions.
"We discussed the issue of $500 million budgetary support with Philippe H Le Houerou, vice president of the WB. Negotiation will begin in this connection," he said.
Mr. Muhith expected the final deal on it to be signed in the current fiscal and the amount released next fiscal.
Bangladesh got the WB budgetary support from the WB last in 2003. Since then the WB had not extended the facility due to its reservations about governance issues of the then government.
There are two programmes of the International Monetary Fund (IMF) with Bangladesh. These are implementation of the VAT Act and the Extended Credit Facility (ECF).
"We had committed to implement the VAT Act by last budget. But we could not implement it. We informed the IMF that it would take one more year," the minister said.
A report on implementation of the VAT law has been placed by the IMF team that visited Bangladesh from September 17 to 30 last. They reminded the authority of the government's commitment to make the law effective by 2016, he mentioned.
The team during its visit to Dhaka met the finance minister, commerce minister, economic affairs adviser to the Prime Minister, finance secretary, Bangladesh Bank governor and other senior officials, development partners and private sector stakeholders. On the other hand, a meeting was held with the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) about review of the VAT law.
The IMF was worried following the meeting with the FBCCI. The IMF feared that their programme would be hampered, if the VAT Act is changed substantially, the finance minister said.
"The VAT law has been approved by the government on principle," the minister said.
The VAT law implementation is one of IMF's major conditions against release of the fund under the ECF scheme involving $1.0 billion. The IMF has so far released about $ 704.3 million in five instalments.
"As all of us here know, we're passing a period of uncertainty. This year we're seeing slow growth in the United States, Europe and Japan --but we must also note that this is the first time in several years that all three are moving in a positive direction. Growth in developing countries slowed in the first half of the year, but early indications point to stronger momentum in the third quarter," said World Bank Group President Jim Yong Kim.
He made the observation on Friday during the inaugural session of the IMF-WB meeting.
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