Economy
“Bangladesh, World Bank ink $2.25bn loan deal for 5 projects”
Bangladesh has secured a $2.25 billion loan from the World Bank, which will be utilized to develop multiple sectors, such as regional trade and connectivity, disaster preparedness, and environmental management.
The financing agreements were signed by Sharifa Khan, the secretary of the Economic Relations Division, and Abdoulaye Seck, the Country Director of the World Bank in Bangladesh. The Ministry of Finance released a press statement confirming the loan agreement between Bangladesh and the World Bank.
During the signing of the financing agreements, both Prime Minister Sheikh Hasina and World Bank President David Malpass were in attendance.
The loan agreement, which amounts to $2.25 billion, encompasses five distinct projects.
The first of which is the $753.45 million, Accelerating Transport and trade connectivity in Eastern South Asia (ACCESS) – Bangladesh Phase-1 Project. This project aims to improve the effectiveness and resilience of regional trade and transportation in Bangladesh and will be overseen by the National Board of Revenue, Roads and Highways Department, and Bangladesh Land Port Authority. Implementation of the project is scheduled to take place from July 2022 to June 2028.
Another project included in the loan agreement is the Resilient Infrastructure Building Project (RIVER), with a budget of $500 million. The main aim of this project is to minimize the vulnerability of the population residing in cyclone and flood-prone coastal areas of Bangladesh. Furthermore, the project seeks to provide secure shelter for humans and their resources, including livestock, during natural calamities such as cyclones, tidal surges, and floods. The Local Government Engineering Department of the Local Government Division will oversee the implementation of the project over a six-year period, from July 2022 to June 2028.
Included in the loan agreement is the $500 million First Bangladesh Green and Climate Resilient Development (GCRD) project, which aims to support the government’s transition towards sustainable and climate-resilient development. The project’s objectives are twofold: to improve public planning, financing, and delivery of eco-friendly and climate-resilient initiatives, and to promote sector reforms that enhance greener and more efficient production and services. The main implementing agency for this program is the Finance Division, and the budget support will be disbursed by June 30, 2024, subject to the fulfillment of specific prior conditions.
Also included in the loan agreement is the $250 million Sustainable Microenterprise and Resilient Transformation (SMART) project. This project’s primary objective is to promote sustainable and resilient green growth of microenterprises (MEs) in Bangladesh. The project intends to drive the transformation of the microenterprise sector into a more dynamic, lower-polluting, resource-efficient, and climate-resilient sector. Palli Karma-Sahayak Foundation (PKSF) will be responsible for the implementation of the project, which will take place over a period of six years, from 2023 to 2028.
The loan agreement also includes the $250 million Bangladesh Environmental Sustainability and Transformation (BEST) project. The project’s primary objective is to enhance the Government of Bangladesh’s capacity for environmental management and to reduce pollution discharges. The Department of Environment (DOE) will lead the project’s implementation, with support from other agencies such as the Bangladesh Road Transport Authority (BRTA), Bangladesh Bank, and Bangladesh High-tech Park Authority (BHTPA). The project will be carried out over a period of five years, from July 2023 to June 2028.
Terms & Conditions
Bangladesh is receiving four out of five loans from regular IDA, with the First Bangladesh Green and Climate Resilient Development (GCRD) being the only one with both a Regular IDA loan ($176 million) and a Short-term Maturity Loan ($324 million). The Regular IDA loans are repayable over a period of 30 years, with a five-year grace period, and a service charge of 0.75% per annum and interest rate of 1.25% applied to the withdrawn amount. Additionally, a maximum annual commitment fee of 0.50% is payable on the unwithdrawn financing balance, although this has been waived by the World Bank for Bangladesh for many years, including the current financial year. The Short-term Maturity Loan, on the other hand, must be repaid over a period of 12 years, with a grace period of six years, and no service charge or interest applied to the withdrawn amount. The World Bank has been a key development partner of Bangladesh since 1972, committing a total of $40.4 billion in loan assistance and $722 million in grants for the country under 368 projects/programs.
Today, Bangladesh solemnly observes the historic Six-Point Day, which holds significant importance in the nation’s struggle for autonomy.
Back in 1966, the Bengalis of the then East Pakistan rallied behind Awami League’s call for a day-long shutdown, demanding specific rights and freedoms. The prominent leader Bangabandhu Sheikh Mujibur Rahman had presented these demands several months prior, aiming to challenge the oppressive rule of the then Pakistani government and their mistreatment of the Bengali population.
In response to Awami League’s call, the people of East Pakistan passionately joined the Six-Point Movement and wholeheartedly participated in a province-wide dawn-to-dusk hartal (shutdown). Unfortunately, the law enforcement authorities resorted to violence, firing upon demonstrators in Dhaka and Narayanganj. Tragically, at least 10 lives were lost as a result of these brutal actions, further fueling the intensity of the movement.
The Six-Point Movement focused on six crucial demands, with the aim of establishing a federal structure of government in alignment with the spirit of the Lahore Resolution of 1940. One of the key demands was the formation of a parliament elected through universal adult franchise, granting genuine representation to the people. Additionally, it advocated for the central government’s jurisdiction to be limited to defense and foreign affairs, while entrusting all other matters to the federating units of the state of Pakistan.
The movement also proposed the adoption of two freely convertible currencies or the establishment of two separate reserve banks for the two regions of Pakistan. This suggestion aimed to address economic disparities and ensure financial stability for both wings of the nation. Furthermore, it emphasized the decentralization of power, calling for the federating units to possess the authority for taxation and revenue collection. Lastly, the movement advocated for separate foreign exchange reserves for East and West Pakistan, safeguarding the economic interests of both regions.
By commemorating the Six-Point Day, Bangladesh pays tribute to the indomitable spirit of its people who fought valiantly for autonomy, ultimately paving the way for the birth of an independent nation.
Dhaka, the capital city of Bangladesh, experienced a concerning level of air pollution this morning, as indicated by an air quality index (AQI) score of 139 recorded at 9:10 am on June 6, 2023.
This ranking placed Dhaka as the 4th city with the most polluted air globally. Topping the list were Johannesburg in South Africa, Doha in Qatar, and Jakarta in Indonesia, with AQI scores of 166, 153, and 152, respectively.
When the AQI value falls between 101 and 150, the air quality is deemed “unhealthy for sensitive groups.” If it ranges from 151 to 200, it is classified as “unhealthy.” A reading between 201 and 300 indicates “very unhealthy” conditions, while a value exceeding 301 is considered “hazardous,” posing severe health risks to residents.
In Bangladesh, the AQI calculation incorporates five criteria pollutants, including particulate matter (PM10 and PM2.5), NO2, CO, SO2, and Ozone. Dhaka has long been grappling with air pollution issues, and it consistently ranks among the top risk factors for death and disability worldwide.
The elevated air pollution levels in Dhaka serve as a reminder of the urgent need to address this persistent problem. Efforts to mitigate pollution and improve air quality are crucial to safeguarding the health and well-being of the city’s residents.
Bangladesh’s May exports reached $4.85 billion (51 thousand 895 crore taka), marking a significant increase of 26.61 percent compared to the previous year.
This positive growth comes as welcome news amidst concerns over foreign exchange reserves. In April, there was a decline in exports by 16.5 percent to $3.96 billion, raising worries about the export sector. However, May witnessed a substantial increase of $890 million in exports, as reported by the Export Promotion Bureau (EPB).
The EPB’s data revealed that during the first 11 months of the current fiscal year 2022-23 (July-May), Bangladesh exported goods worth $50.52 billion, showing a growth rate of 7.11 percent compared to the same period in the previous financial year when exports amounted to $47.17 billion. The export growth can be attributed to sectors such as leather and leather products, non-leather footwear, plastic products, and ready-made garments.
Although ready-made garments remained the leading export item, with exports worth $42.63 billion during the first 11 months of the current fiscal year, other sectors experienced growth as well. Leather and leather products, the second highest export item, saw a substantial growth rate of 42 percent, amounting to $1.12 billion. Home textile products ranked third with exports worth $1.02 billion, despite experiencing a decline of 30 percent.
However, certain sectors faced challenges, as exports of jute and jute products, home textiles, frozen food, agro-processed food, and engineering products declined during this period. Overall, the positive growth in exports during May contributes significantly to Bangladesh’s foreign exchange reserves and offers optimism for the country’s economic outlook.
