Diplomatic Correspondent: Bangladesh will be seeking an additional $500 million in budget support at the Annual General Meeting of the World Bank (WB) and International Monetary Fund (IMF) to fight the corona crisis and for economic recovery, official sources said. The weeklong meeting is being held physically in Washington DC from April 18 to 24 April. At the meeting, the Bangladesh government’s main agenda will be seeking loan support from large development partners WB and IMF, according to officials at the finance ministry and Economic Relations Division (ERD).
“We’ll seek budget support from the World Bank and IMF as it has flexibility for utilizing in any areas including in corona recovery,” a finance ministry high official said seeking not to be named.
The meeting was held virtually for the last two years because of the global corona crisis. Usually, two meetings are held a year. Finance Minister AHM Mustafa Kamal is not attending the meeting on health grounds. Bangladesh Bank Governor Fazle Kabir is leading an eight-member delegation.
Besides placing the fresh demand for the loan, Bangladesh’s different initiatives toward economic recovery and economic progress will also be presented at the meeting on the government’s part, they added.
The World Bank announced International Development Agency (IDA)-20 programme in October last year to support the economic recovery of low-income countries affected by the Covid-19 pandemic.
The Washington-based lender has committed to providing $93 billion in concessional loan support to low-income countries from the three-year loan package stretching from 2023 to 2025. Bangladesh will also get soft loans from the window.
The new loan package was announced after the IDA-19 loan package expired in November last year.
ERD officials informed that the World Bank has already conveyed the message that Bangladesh will get loans from IDA-20. However, they could not confirm the size of the loans.
In the earlier package, Bangladesh received $4.2 billion or nearly Tk 357 billion loans from the multilateral lender.
The government will request the World Bank for quick approval of the loans from IDA-20 package at the Spring meeting.
Low-income countries get soft-term loans from the IDA, known as soft loan window of the World Bank. Bangladesh is the largest recipient of IDA loan.
Bangladesh has so far taken IDA soft loans, which has 38 years grace period with six years grace period and an interest rate of 0.75 percent
It also gets concessional loans from the lender beyond the IDA package. But the country has to bear more interest after its exit from the LDC bloc.
The government has attached importance to getting budget support from the development partners at the crisis moment as the loan has no bindings for spending in a fixed area like the project loans.
The World Bank has recently provided $250 million budget support to Bangladesh and assured of providing another $250 million next year, ERD officials said.
They added that Bangladesh gets the highest amount of loans from the IDA loan package as it has more capacity in utilizing loans. In view of this, it is expecting more money from the new package.
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