After IMF, JICA also opts to deal with political govt

Japanese financier JICA follows IMF footprint as it also now tags consultation with Bangladesh's upcoming political government to budget bankrolling as the national elections are in sight for transition from the interregnum.

Officials say the Japan International Cooperation Agency (JICA) has recently initiated talks with the government on providing budget-support credits in the ongoing fiscal year 2025-26.

In the last fiscal year, the Japanese funding agency had provided $418 million worth of budget-support credits for economic reforms and climate resilience.

A team of JICA officials, last week, had a meeting with Finance Division officials at Bangladesh Secretariat in the capital where they discussed the prerequisite to budget support in the current fiscal year.

At the meeting, sources said, the JICA officials suggested the finance division officials to conduct needs assessment through mutual discussions for the credit support.

A senior finance official told The Financial Express that to get budget credits the government needs to commit to some policy reforms.

He says a new government is likely to take office in a couple of months, and the possible policy reforms linked to the proposed budget support from JICA have to be conducted during the tenure of new government.

Thus, he says, the JICA officials at the meeting discussed that they want to consult the reform measures for the new budget-support credit with the new government before fund release.

"JICA's new budget support will come only after the next government makes policy- reform commitment," he says.

Earlier, the International Monetary Fund (IMF) also tagged release of the sixth tranche of $5.5 billion loans to discussion with the upcoming political government to get commitment from them to conducting the reforms.

Thus, the IMF has delayed conclusion of the ongoing fifth review of the credit programme now.

"Discussions on the fifth review of the IMF-supported programme will continue in the period ahead. The Fund remains a committed partner to Bangladesh in the quest for sustained macroeconomic stabilisation and strong growth that benefits all the people," the IMF said in a statement Thursday.

Sources say the government is now also in discussion on budget-support credits with the World Bank and the Asian Development Bank.

From the ADB the government is expecting some $250 million in second tranche of the "Strengthening Social Resilience Programme". The Manila-based funding agency gave some $250 million worth of programme-based loan in the fiscal year 2023-24.

Also, the government is now in talks with the World Bank to get some $300-500 million in fresh budget support for smooth graduation from the least-developed country (LDC) status in November next year.

Bangladesh received more than $1.0 billion in budget support from the Washington-headquartered development financier in the fiscal year 2024-25.

syful-islam@outlook.com