Boosting competitiveness, private-sector uplift, green growth, climate resilience among goals
June 23, 2022 08:33:12
June 23, 2022 08:59:32
The Asian Development Bank (ADB) may pledge to lend Bangladesh US $ 2.3 billion during 2023-2025 under an overall development recipe, at a time when the country launches a search for foreign-exchange support.
Regarding the financing program the ADB is finalizing indicative country pipeline and monitoring (ICPM) report for the period, officials say.
Of the total sum, $ 758 million can come in 2023, $ 803 million in 2024, and $ 803 million in 2025-the crucial period leading up to Bangladesh’s graduation from LDC status.
The new financing program is aimed at boosting competitiveness, employment, and private-sector development, promoting green growth, climate resilience, and strengthening human capital and social protection in Bangladesh, says the draft ICPM report.
The funding will also support the key cross-cutting themes like gender equality and social inclusion, governance and institutional capacity, regional cooperation and integration and new technology and innovation.
In its draft report the Asian development financier says like in the previous years, it gives importance to sector-absorptive capacity and project readiness as key attributions for selecting projects in the pipeline.
Preparation of the report started off with a meeting on 25 May and the new ICPM report, the ADB expects, could be approved by its management by this coming August.
In the draft report the ADB says Bangladesh is quickly recovering from the Covid-19 pandemic where the gross domestic product (GDP) grew by 6.9 per cent in fiscal year 2020-21, up from 3.4 per cent in FY2019-20.
It notes that the GDP growth in FY 2021-22 is estimated at 7.2 per cent which indicates the resilience of the Bangladesh economy. “It is expected that growth will continue to be strong in coming years with stronger recovery of economic activities and private investment.”
However, Bangladesh economy is also facing a new headwind from the impact of Russian invasion of Ukraine with increased food and fuel prices and heightened uncertainty, the draft report says.
It notes that the current-account deficit significantly widened due to higher import payments than export earnings and remittance inflows. Also, a large segment of population is still under the poverty line or at risk to fall back to poverty.
Over the medium term, the ADB predicts, Bangladesh may face trade-related challenges due to the loss of specific least-developed country (LDC) market-access provisions, special and differential treatment, and flexibility once it graduates from LDC status in 2026.
In the next three years, the report says, the ADB will support economic recovery from the pandemic and mitigate the impacts arising from the global uncertainties.
The funds will support national road and railway corridors development with necessary reforms to improve operation efficiency to facilitate intra / inter-regional trade, provide better access to the market and job opportunities, and facilitate private-sector investment.
During the period, the ADB will improve the reliability of electricity supply and commercial quality of the services. In addition, it will promote enabling reforms for private-sector participation and help the country prepare for LDC graduation to promote economic diversification.
The ADB will also provide integrated solutions to climate change mitigation and adaptation. Opportunities for energy efficiency and renewable energy will be explored to accelerate clean- energy transition, the draft mentions.
“ADB will support the social recovery from the pandemic through stronger focus on health, education, and social protection,” the draft report on the funding recipe says.