World Bank a key partner of Bangladesh’s economic growth: Finance minister

Finance Minister AHM Mustafa Kamal on Sunday praised the World Bank for its continued support towards Bangladesh’s development.

He said Bangladesh's growth has increased by 74 times since 1972, and the World Bank had a role to play behind it.

“After independence, the country's GDP growth was only $6.3 billion, which has now increased to $465 billion,” he said.

The finance minister came up with the statement while addressing a function as the chief guest marking the celebration of 50 years of partnership between Bangladesh and the World Bank held at the Bangabandhu International Conference Centre (BICC) in the capital, according to UNB and BSS.

The finance minister also said that Bangladesh is currently the 35th largest economy, and the poverty rate has come down to 20 per cent, per capita income increased to $2,824 and average life expectancy increased to 73 years.

Highlighting the future plans, the Finance Minister said, “Our next target will be to turn Bangladesh into an upper-middle income country by 2031, and a Smart Developed Bangladesh in 2041.”

The finance minister reiterated his appeal to the development partners including the World Bank, to continue their support to Bangladesh to attain its various development goals.

The finance minister noted that Prime Minister Sheikh Hasina has been the architect of modern Bangladesh.

Visiting World Bank managing director (operations) Aaxel van Trotsenburg, Vice President for South Asia region Martin Raiser, World Bank country director Abdoulaye Seck and ERD Secretary Sharifa Khan spoke on the occasion.

The World Bank managing director reaffirmed strong support for Bangladesh as he marked the 50thanniversary of fruitful partnership.

"Bangladesh has made tremendous strides, transforming from one of the world's poorest countries at independence in 1971 to a lower middle-income country in 2015," said van Trotsenburg.

He said The World Bank is proud to be part of this journey as one of Bangladesh's first development partners adding, "We've learnt a lot from each other about how development works."

They inaugurated a photo exhibition depicting the country's remarkable progress over the past five decades and joined a panel discussion. The events provided an opportunity to recognise the country's remarkable development achievements and to look forward to realising the country's vision to become an upper-middle-income country by 2031.

The World Bank managing director said Bangladesh, as many other countries in the world, is coping with unprecedented global shocks.

"We are committed to supporting the country through uncertainties and challenges created by the COVID-19 pandemic, the Russian invasion of Ukraine, and increasing impacts of climate change as the country moves forward to achieve its development goals," added Trotsenburg.

ERD Secretary Sharifa Khan said that over the last 50 years, the World Bank has committed over $39 billion out of which over $27 billion has so far been disbursed.

She said currently some 53 projects are going on with the World Bank finance while the current portfolio of the lending agency in Bangladesh is around $15 billion which is around 32 percent of the total current foreign assistance to Bangladesh.

The ERD secretary requested the World Bank to align the Country Partnership Framework (CPF) of the World Bank with the government's policies and development priorities.

Citing that the cost of borrowings has increased abruptly to over 4 percent which could hold back the country's development trajectory, Sharifa also called upon the development partners to come up with pragmatic solutions.

She also opined that the possible budget support would play an important role in addressing the challenges of the country.

World Bank managing director Alex van Trotsenburg, Alternate executive director of Bangladesh to the World Bank Dr Ahmad Kaikaus, BUILD Chairperson Nihad Kabir, renowned economist Dr Ahsan H Mansur, Multilateral Investment Guarantee Agency (MIGA) Vice President Junaid Kamal Ahmed spoke at a panel discussion moderated by the Martin Raiser.

Dr Ahmad Kaikaus said Bangladesh has remarkable progress over the years, but the Russia-Ukraine war is affecting the country's growth trajectory more than the pandemic.

Dr Ahsan H Mansur said that although Bangladesh has made tremendous achievements over the years, but the country has to face successfully some short, mid and long-term challenges.

He also suggested for making the interest rate and exchange rate on market based alongside making some fundamental reforms in tax policy and in tax administration.

Junaid Kamal said that over the next one decade, there has to be a very healthy investment to Bangladesh to accelerate the development stride.

Barrister Nihar Kabir said that although Bangladesh has performed well in terms of dealing with the pandemic, but there is no way to be complacent.

She suggested the government to focus more on increasing the competitiveness, skilling up the Human Resources, addressing the delay in supply chain management and the procedural delay in Chattogram port.

In the five decades of this remarkable journey, the World Bank remained a steadfast partner of Bangladesh. In August 1972, Bangladesh became a member of the World Bank Group.

In November 1972, the first World Bank project for Bangladesh, a $50 million Emergency Recovery Credit was approved to help the war-torn nation to rebuild the transport and communication, agriculture, and industry sector with some support to the construction and power sector. At the same time, the World Bank reactivated four more projects that had been approved before the liberation war.

Since then, the World Bank has committed about $39 billion in International Development Association (IDA) financing in the form of grants, interest-free loans, and concessional credits to help the country overcome its development challenges.

With about $15.3 billion in financing for 53 ongoing projects, currently Bangladesh has the largest ongoing IDA programme, and the World Bank is Bangladesh's largest development partner.