The latest talks between the World Bank (WB) and the government on the prospect of getting a US$500 million budget-support credit by the latter anytime soon failed to yield any positive results.
Officials said Friday the government finds the terms set by the lender too tough to meet, as some of those entail critical reforms.
The failure would delay confirmation of the expected budget support further, they added.
A Ministry of Finance official said a World Bank mission had a wrap-up meeting with the MoF Thursday on progress over the 'policy reform matrix' where the government side could not give satisfactory answers on the reforms.
During their stay in Dhaka on September 13-18, the WB mission members met with the finance ministry on several occasions to discuss the proposed reforms tagged with the funds.
The Washington-based lender proposed some "policy reform matrices" a year ago for the Bangladesh government under which the latter has to do the restructuring within a certain period to obtain the proposed $500 million credit meant for bankrolling part of the deficit in national budget.
Among the reform proposals are automated fuel-price adjustment, finalisation of the direct income tax law, enactment of the public-private partnership (PPP) law and the formulation of its Rules, corporatisation of some poor- performing power-distribution companies and the strengthening of the Load Dispatch Center of the Power Development Board.
The multilateral funding agency has also asked for formulating a market-based interest rate for the national savings certificates (NSCs) by curbing government intervention and quickening the handover of the lands for the special economic zones (SEZs).
"Some of the World Bank reform proposals are really tough to comply with within the stipulated time. During the talks with the latest Bank mission, we informed them that they would discuss the conditions within the government system and then will reply," said a senior MoF official.
"We have already brought some reforms including formulation of import and export policies, power and gas tariff hike, but still the World Bank is not happy over those. It recommends more reforms to get the budgetary support credit," he said.
The government has tried to get the budget support for more than one year after the global lender assured of providing the loan. But the World Bank is not responding as quickly as the government wants, the officials said.
Meanwhile, Finance Minister AMA Muhith in the next meeting with the WB high officials at the WB-IMF annual meeting in Peru next month would press for the US$500 million budget support as the lender has taken recourse to a 'go-slow' policy on the credit package.
The MoF officials said the credit at this moment looked a "remote possibility" as the lender is dillydallying in finalisation of its promised financial support for Bangladesh.
Early last month, the Finance Secretary, the Economic Relations Division Secretary, the Banking Division Secretary and the Internal Resources Division Secretary sat together for discussing the delays.
They discussed in detail the "policy reform matrix" handed by the WB over the question of loan disbursement.
Nearly a year ago, the Bank had given some policy matrices on the public-sector reforms to the Bangladesh government to obtain the budgetary credit support that will help in offsetting the Tk 866.57 billion budget deficit.
Government's high executives have opined that the government would reiterate the need of the Bangladesh's budget support to the WB and request it to proceed with the assured loan soon, sources said.
The WB is the largest donor to Bangladesh in development funding. It usually makes commitment for disbursing US$1.5 billion in assistance annually and disburses nearly $700 million.
The Bank disbursed a record highest $1.0 billion worth of assistance in the last FY2015 for Bangladesh.
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