BD to pay $9.87m for buying 1,364 more IBRD shares

The government is going to pay US$9.87 million for purchasing 1,364 more shares of the International Bank for Reconstruction and Development (IBRD), a wing of the World Bank (WB) Group, officials said Monday.
"All the official formalities have been completed. Now we will send the amount to IBRD soon," said an additional secretary of the Economic Relations Division (ERD).
He said this increased number of shares will strengthen Bangladesh's voice at the Washington-based global lender.
Currently, the country has a total of 4,854 shares at IBRD, only 0.37 per cent of its total stake. Earlier, the government took the move to purchase 1,364 more shares at $7,238.09 each.
Among the 188 member countries of IBRD, the US has 15.02 per cent share, Japan has 8.13 per cent, China has 5.25 per cent, Germany has 4.56 per cent, and France and the UK has 4.06 per cent each.
Bangladesh is one of the top borrowing countries of WB Group, as it takes nearly $700 million worth of loans every year. The global lender in the recent years made commitment of providing $1.3 billion worth of loans and grants annually.
Usually, Bangladesh borrows from the International Development Association (IDA), a soft lending wing of the World Bank Group.
IBRD helps the middle-income nations to reconstruct their infrastructure and augment development work. IBRD's service charge is comparatively higher than IDA, as it lends at the market rate to the borrowing countries.
The ERD official said as per the reform plan of WB Group, IBRD has decided to raise its authorised capital by issuing 484,102 more shares.
"Not only Bangladesh, other IBRD member countries will also get shares proportionately from its additional stakes."
He said since Bangladesh is going to be a middle-income nation by 2021, it will require financial support from IBRD too. So the initiative of raising the country's share at the organisation will be helpful for national economy.
IBRD gets its money from the capital markets. It has raised the bulk of the money, loaned by WB, to alleviate poverty around the world.
Its annual funding volumes vary from year to year, and are currently around $10-$15 billion.
Meanwhile, Bangladesh has already decided to join the $100 billion Asian Infrastructure Investment Bank (AIIB), a new lender, initiated by the World's second largest economy China.
It also plans to join another proposed global lending institution, being organised by the BRICS nations, to spread up scopes of the poor and middle-income countries to get more funds for developing their infrastructure and cutting poverty.
The country needs to spend $100 billion by 2020, which is more than 10 per cent of its gross domestic product (GDP), to improve infrastructure to serve an increasing population, according to a WB Report, released in this April.

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