Govt expects WB's budget support this year: Salehuddin

Finance and Commerce Adviser Dr Salehuddin Ahmed today (17 September) said Bangladesh expects budget support from the World Bank (WB) within this year.

"We're expecting budget support from the World Bank within this year and this will be finalized and then you will know," he said.

The adviser said this while talking to the newsmen after a WB delegation led by its Regional Director Mathew A Verghis met him at the Finance Division in Bangladesh Secretariat.

He said the WB team has been requested to immediately provide the budget support to carry out the necessary reforms here.

"Since World Bank is our largest multilateral development partner, we need special support in the forms of financial assistance and technical assistance from them," he added.

The finance adviser said, "They (WB) have agreed and are also positive as well as open-minded. They have also been assured and more detailed discussions will be held mainly on how to carry out the reforms,"

When asked whether the government has sought $2 billion afresh from the World Bank, he said he did not reveal the amount adding that the issue would be finalized later on.

Dr Salehuddin said each and every assistant comes up with a set of implementable conditions and actions. "The reforms will have to be implementable; otherwise we won't be able to accomplish those while the donors also won't lend us the support," he added.

He also said the government has requested the WB so that the reform initiatives become implementable.

Finance ministry officials said that the World Bank is likely to provide a $1 billion loan to Bangladesh and the global lender has set four conditions for the Bangladesh Bank.

The amount must be used specifically for reforming the country's banking and financial sectors and strengthening the central bank. In this regard, the World Bank officials held a meeting recently with Bangladesh Bank Governor Ahsan H Mansur.

Sources said $750 million of the loan must be allocated for policy reforms. The central bank expects to receive this assistance in December.

The conditions for securing this loan are: establishing a framework for asset management companies to recover non-performing loans from banks and financial institutions; formulating policies to determine the actual beneficiaries of loans; defining the scope of forensic audits for banks and financial institutions; and creating a separate department within Bangladesh Bank for regulatory enforcement.