Bangladesh has embarked upon a program to spur growth and increase opportunities for new employment by improving the environment for private sector investment.
As part of this process, the government in Dakha intends to move ahead with its program of enterprise and banking reform with the help of a 250 million US dollar (halvanden milliard DKR) interest-free credit approved Tuesday by the World Bank.
Bangladesh has made slow but steady progress in financial sector reforms, including the successful strengthening of its Central Bank. The Enterprise Growth and Bank Modernization Project will help the government move out of the industrial and financial sectors, spur the development of private sector enterprises, and develop a competitive private banking system.
The project will support reform of the countrys Nationalized Commercial Banks, Rupali, Agrani, Janata and Sonali. It will also encourage the development of small enterprises while strengthening institutions like the Board of Investment, the Privatization Commission, and the Bangladesh Export Processing Zone Authority.
The project will help the government convert some of its closed assets, such as the Adamjee Jute Mills and Chittagong Steel Mills, to productive uses, which can increase investment and employment. It will also support privatization and the divestiture of state-owned enterprises while ensuring a proper safety net for retired employees.
– Bangladesh has had some great development success, but so far it is not significantly reducing poverty, said Simon Bell, Manager of Finance and Private Sector Development for the South Asia Region in the World Bank, and task leader of the project.
– To do this, the country needs strong economic growth, the kind which can thrive only in the presence of a sound, healthy banking system and a dynamic private sector.
– And if the people are going to support these changes, then they need to be guaranteed that they will be taken care of during times of reform and privatization which can be uncertain and painful. That is what we are trying to achieve, working in partnership with the Government, added he.
The total cost of the project is 480 million dollar. Of this, the government of Bangladesh will provide 142 million, the British Department for International Development will provide 88 million, and the World Banks International Development Association will provide 250 million in an interest-free loan known as a “credit” which carries a 0,75 percent service charge and has 40 years to maturity with a 10-year grace period.
Kilde: www.worldbank.org
