ADB may scrap $45m loan as govt fails to reform judiciary
FHM Humayan Kabir | Sunday, 27 February 2011
FHM Humayan Kabir
The Asian Development Bank may scrap US$45 million loan it committed to Bangladesh after the government failed to carry out reforms in the country's judiciary and administration, officials said Saturday. The Manila-based lender has informed the finance ministry that it could scrap the loan --- the last tranche of its $150 million credit it pledged four years back in an effort to institutionalise good governance in the country. An ADB official said the bank has not made the final decision on cancelling the last tranche yet, but failure on the part of the government to introduce key judicial and administrative reforms has prompted it to "rethink about the soft credit." "The bank may not give the loan to Bangladesh because the government has not carried out the necessary reforms it had pledged when it signed the credit deal with us," he told the FE. "While signing the deal, the government had committed to set up an office of ombudsman, establish an independent attorney service and reform the public management systems under the four-year credit programme," he said. Dhaka and the anti-poverty lender signed the agreement in November 2007. The then caretaker government said it would use the money to strengthen the country's judiciary and administrative systems. "If Bangladesh fails to conduct reforms agreed between the government and the bank, we will have no option but to scrap the next disbursement," he said. He requested anonymity as he is not authorised to talk to media. Officials said while signing the credit agreement, the then government also pledged to fortify the Anti Corruption Commission and introduce an independent attorney service to replace the existing ad-hoc appointment of state prosecutors. They said ADB disbursed $105 million funds in two tranches in the first year after the deal was signed. According to the terms and conditions of the agreement, the bank was supposed to disburse the third tranche ($45 million) within two years after the release of the second tranche. But the last disbursement was tagged with "satisfactory implementation of the reforms introduced with the credit given in the first two tranches," an official said. "ADB has recently told us that it is not happy with our judicial reform programmes. They bluntly told us that disbursement of third tranche could become uncertain," a senior economic relations division official said.
The Asian Development Bank may scrap US$45 million loan it committed to Bangladesh after the government failed to carry out reforms in the country's judiciary and administration, officials said Saturday. The Manila-based lender has informed the finance ministry that it could scrap the loan --- the last tranche of its $150 million credit it pledged four years back in an effort to institutionalise good governance in the country. An ADB official said the bank has not made the final decision on cancelling the last tranche yet, but failure on the part of the government to introduce key judicial and administrative reforms has prompted it to "rethink about the soft credit." "The bank may not give the loan to Bangladesh because the government has not carried out the necessary reforms it had pledged when it signed the credit deal with us," he told the FE. "While signing the deal, the government had committed to set up an office of ombudsman, establish an independent attorney service and reform the public management systems under the four-year credit programme," he said. Dhaka and the anti-poverty lender signed the agreement in November 2007. The then caretaker government said it would use the money to strengthen the country's judiciary and administrative systems. "If Bangladesh fails to conduct reforms agreed between the government and the bank, we will have no option but to scrap the next disbursement," he said. He requested anonymity as he is not authorised to talk to media. Officials said while signing the credit agreement, the then government also pledged to fortify the Anti Corruption Commission and introduce an independent attorney service to replace the existing ad-hoc appointment of state prosecutors. They said ADB disbursed $105 million funds in two tranches in the first year after the deal was signed. According to the terms and conditions of the agreement, the bank was supposed to disburse the third tranche ($45 million) within two years after the release of the second tranche. But the last disbursement was tagged with "satisfactory implementation of the reforms introduced with the credit given in the first two tranches," an official said. "ADB has recently told us that it is not happy with our judicial reform programmes. They bluntly told us that disbursement of third tranche could become uncertain," a senior economic relations division official said.