The World Bank’s Board of Executive Directors has approved two major projects totalling $900 million to bolster Bangladesh's fiscal policies, financial sector, and urban infrastructure.

These initiatives aim to support sustainable and climate-resilient growth, facilitating Bangladesh's progress towards upper middle-income status.

“Decisive reforms will help Bangladesh sustain growth and strengthen resilience to climate change and other shocks,” said Abdoulaye Seck, World Bank Country Director for Bangladesh and Bhutan. 

“These new financing operations will help Bangladesh in two critical areas – the financial sector and urban management — to achieve its vision of upper middle-income status.”

Strengthening fiscal and financial resilience

The $500 million Second Recovery and Resilience Development Policy Credit will drive significant fiscal and financial reforms.

This initiative focuses on transitioning from trade taxes to consumption and income taxes to enhance competitiveness and prepare for Bangladesh’s graduation from the Least Developed Country (LDC) status.

It also aims to institutionalise the public procurement authority, streamlining electronic government procurement processes, and reducing lead times from 70 to 55 days.

Key measures include bolstering banking sector oversight, improving management of national savings certificates, enhancing the efficiency of social protection programmes, and increasing climate adaptation and mitigation investments.

“A well-functioning financial sector is critical for Bangladesh to increase investment and improve access to finance for those left out of formal banking systems,” said Bernard Haven, World Bank Senior Economist and Task Team Leader for the programme.

Promoting climate-resilient urban growth

The $400 million Resilient Urban and Territorial Development Project targets urban infrastructure and management in seven city clusters along a 950km economic corridor from Cox’s Bazaar to Panchagarh.

With urbanisation expected to drive 60% of the population to cities by 2050, this project aims to alleviate congestion in Dhaka by fostering growth in secondary cities.

The project will support climate-resilient and gender-responsive infrastructure investments, improve connectivity, enhance food supply chains, and create new economic opportunities. Town-level coordinating committees with significant female representation will oversee these initiatives.

“This will be the first in a series of projects helping build resilience to climate change and create new opportunities and jobs in secondary cities through spatially targeted investments,” said Kwabena Amankwah-Ayeh, World Bank Senior Urban Development Specialist.

A longstanding partnership

The World Bank has been a key development partner for Bangladesh since its independence, committing around $41 billion in grants and interest-free credits.

These new projects reaffirm the World Bank's dedication to supporting Bangladesh's journey towards sustainable and resilient growth.

BDST: 1349 HRS, JUNE 22, 2024
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