Bangladesh continues to pursue broad reforms to accelerate growth and poverty reduction. To support these reform efforts, the World Bank Tuesday approved a 200 million US dollar (1,22 mio. DKR) Development Support Credit, the second in a series of such credits, the Bank wtrites in a press release.
Bangladesh has achieved noticeable progress in improving life expectancy, lowering fertility, expanding immunization and decreasing child mortality, raising school enrolment, narrowing gender gap, empowering women, improving food security, reducing poverty and helping the vulnerable poor.
The GDP growth averaged more than 5 percent a year over the past five years. The fiscal deficit has been contained, monetary conditions tightened, and external reserves increased. Trade liberalization has been put back on track.
Despite faster economic growth and improvements in many social indicators than comparable low-income countries, Bangladesh still faces several daunting development challenges. The countrys continued reform initiatives attempt to remove these obstacles to growth and poverty reduction.
The World Bank supported the reform program of the Government earlier through the first Development Support Credit (DSC-I), approved in June 2003. The present credit aims to help Bangladesh further enhance growth and poverty reduction through supporting key reforms in banking, state enterprises, energy, trade liberalization, tax administration, public spending, and procurement.
– The reforms, introduced by the Government and backed by the Development Support Credit, are designed to improve the climate for private investment on which the creation of jobs, higher productivity, and rising incomes depend. These are crucial for reducing poverty more rapidly. The reforms are also aimed at improving the delivery of services, especially to the poor. Better governance is an integral part of the reform program in each of its aspects, said Anthony Bottrill, Lead Economist of the World Bank and the Task Team Leader for this operation.
These reform initiatives build on the Governments Interim-Poverty Reduction Strategy Paper (I-PRSP), which aims to accelerate pro-poor economic growth, advance the position of women, strengthen social protection, support local participation, and reduce inequality. The Government is now holding extensive consultations to complete a full PRSP by December 2004.
In governance, the World Bank supports actions in a number of key areas. In addition to reforms in banking, state-owned enterprises, tax administration, and public procurement, the credit supports tracking public spending leakages; making the Public Accounts Committee functional and strengthening the independence of the Office of the Comptroller and Auditor General.
The Government has decided to introduce legislation to bring accounting and auditing standards in line with international practice. It has also outlined a strategy to reform the police services. The World Bank has encouraged the Government to appoint members of an independent Anti-Corruption Commission and make it operational as soon as possible.
The Development Support Credit also backs improvements in selected areas of public administration, such as personnel management and merit-based promotion for senior civil service positions.
In the energy sector, it supports, among other things, making the Energy Regulatory Commission functional and reducing the arrears of key power utilities as an initial step towards their financial restructuring.
The credit from the World Banks International Development Association carries a 0,75 percent service charge and has 40 years to maturity with a 10-year grace period. It will be disbursed in one tranche.
For more information on World Bank activities in Bangladesh visit www.worldbank.org/bd
