$130m WB food support credit for Bangladesh
Monday, 15 September 2008
FE Report
The Bangladesh government successfully concluded negotiations with the World Bank (WB) for a US$130 million Food Crisis Development Support Credit.
The proposed programme will assist the Bangladesh government to implement its on-going policies and pro-poor programmes to cope with high food prices, said a WB press release.
Secretary of finance division Mohammad Tareque and Vinaya Swaroop, Lead Economist, WB Office Dhaka led the government and the IDA delegations respectively in the negotiations.
Following the international food price hike that affected the whole world this year, the WB created a US$1.2 billion Global Food Response Program (GFRP).
In response to the Bangladesh government's request, the WB would provide the emergency credit under this fast-track approval facility.
"The food price inflation has caused enormous hardship to the poor and low-income people in Bangladesh," said Zahid Hussain, WB's Acting Country Director.
"The Bangladesh government has taken commendable steps including Open Market Sales for rice and 100-Day Employment Guarantee program to help the poor. The proposed assistance will help the government by generating fiscal space to absorb the pressure from the expansion of safety nets programs," he added.
In its FY09 budget, the government has allocated over US $600 million in additional funds for food-based safety net programs including US$300 million in the new 100-Day Employment Guarantee Scheme.
The government has also raised the strategic public food reserve from 1 to 1.5 million tons-at an additional cost of roughly US$200 million. The proposed operation would create fiscal space in the government budget, to partially finance the projected FY09 deficit of 5 percent of GDP.
The credit is scheduled to be discussed for approval on October 10, 2008.
The credit from the WB has 40 years to maturity, including a 10-year grace period, and carries a service charge of 0.75 percent.
The Bangladesh government successfully concluded negotiations with the World Bank (WB) for a US$130 million Food Crisis Development Support Credit.
The proposed programme will assist the Bangladesh government to implement its on-going policies and pro-poor programmes to cope with high food prices, said a WB press release.
Secretary of finance division Mohammad Tareque and Vinaya Swaroop, Lead Economist, WB Office Dhaka led the government and the IDA delegations respectively in the negotiations.
Following the international food price hike that affected the whole world this year, the WB created a US$1.2 billion Global Food Response Program (GFRP).
In response to the Bangladesh government's request, the WB would provide the emergency credit under this fast-track approval facility.
"The food price inflation has caused enormous hardship to the poor and low-income people in Bangladesh," said Zahid Hussain, WB's Acting Country Director.
"The Bangladesh government has taken commendable steps including Open Market Sales for rice and 100-Day Employment Guarantee program to help the poor. The proposed assistance will help the government by generating fiscal space to absorb the pressure from the expansion of safety nets programs," he added.
In its FY09 budget, the government has allocated over US $600 million in additional funds for food-based safety net programs including US$300 million in the new 100-Day Employment Guarantee Scheme.
The government has also raised the strategic public food reserve from 1 to 1.5 million tons-at an additional cost of roughly US$200 million. The proposed operation would create fiscal space in the government budget, to partially finance the projected FY09 deficit of 5 percent of GDP.
The credit is scheduled to be discussed for approval on October 10, 2008.
The credit from the WB has 40 years to maturity, including a 10-year grace period, and carries a service charge of 0.75 percent.