WB weighs raise in lending to Bangladesh: Zoellick

FE Team | Published: November 04, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The World Bank (WB) Saturday said it will scale up lending, including budgetary support, for Bangladesh, providing rich nations commit increased funds for its concessional lending arm that provides soft loans to the poorer nations.
The global lender also agreed to finance the country's power sector if the caretaker government carries out certain policy reforms.
"We're actively considering increasing lending to Bangladesh, although it will depend on the success of our drive to mobilise funds from the world's wealthy countries," Finance Adviser Mirza Azizul Islam quoted visiting bank president Robert Zoellick as saying.
The finance adviser had a formal meeting with Zoellick, who is visiting Bangladesh as part of his "global listening tour."
Talking to newsmen after the meeting with the Bank's president at the National Economic Council, Islam said the global lender was trying to mobilise resources from donor countries to fund the International Development Association (IDA), the bank's soft-lending arm.
The finance chief noted that the bank itself would inject US$3.5 billion from its own source into the IDA in a move to help continue its anti-poverty mission.
Islam also pointed out Zoellick held out the assurance of extending $130 million in loan for the post-floods reconstruction project. The Washington-based lender has already provided $75 million as budgetary support, he added.
The WB president, who is now in the city on the last leg of his South Asian tour, also expressed its interest to take up a Coastal Zone Management Project to help Bangladesh respond to the climatic change.
The finance adviser said he made it clear that Bangladesh was "pledge-bound" to maintain the macro-economic stability and continue institutional reforms intended to crack down on corruption, spur growth and "lay the foundation for the private sector-led growth."
"Our goal is to accelerate growth so that Bangladesh can graduate to the rank of a middle-income country in the near future and accelerate growth," he told the bank's top boss who took the helm of the world's largest development agency just four months ago after the scandalous exit of his predecessor Paul Wolfowitz.
Islam noted that he had sought the Bank's support for power, road, Padma Bridge, health and education sectors.
He, however, reminded the Bank's president of the current challenges facing the economy, notably global price spiral and impact of the recent floods on budget.
In this connection, the finance adviser urged the WB to jack up the budgetary support in the form of transitional budget support and project financing in line with the Country Assistance Strategy.
"We've asked the Bank president to make the power sector programme a first-track one," he told reporters.
Referring to the energy sector, the finance adviser said the WB president wanted to know how Bangladesh was "reacting to the rocketing prices of petroleum products in the international market."
The Bank's new president urged the top finance and aid officials to help bolster public-private partnership and increase the involvement of the International Finance Corporation in the country's development.
In the meeting with top finance and planning officials, Zoellick, a former US trade negotiator, a deputy secretary of state and a Golman Sachs executive, lauded the caretaker authority's institutional reforms such as separation of the judiciary from the executive, the Election Commission, the Anti-Corruption Commission and the Public Service Commission.
Zoellick arrived in a chartered flight at 6.0 pm and finance adviser Mirza Azizul Islam received him at the Zia International Airport.
The WB president is scheduled to meet Chief Adviser Fakhruddin Ahmed, Nobel laureate Muhammad Yunus, private sector representatives, civil society members and some selective editors today (Sunday).
The World Bank boss would conclude his South Asia visit with Bangladesh as he is scheduled to leave Dhaka Sunday night.
Earlier, he visited Pakistan and India.