Bangladesh to get $600m loan from ADB for structural reforms

The Asian Development Bank (ADB) will provide a $600 million policy-based loan (PBL) to Bangladesh for the country’s structural reforms aimed at supporting the mobilization of domestic resources, the efficiency of public investment projects, developing private sector, reforming state-owned enterprises, and promoting transparency and good governance.

The ADB board approved the loan on Wednesday.

“ADB’s PBL promptly responds to Bangladesh’s immediate development financing needs following the political transition. The reforms target improvements in economic management and governance as well as economic diversification and competitiveness,” said ADB Regional Lead Economist Aminur Rahman.

“ADB's program was developed in close collaboration with the International Monetary Fund, World Bank, and other development partners.”

Bangladesh has been struggling with revenue mobilization, as it possesses the lowest tax-to-gross domestic product ratio in the world, at only 7.4 per cent.

This PBL will help Bangladesh introduce key policy actions with the aim of increasing domestic resource mobilization, while improving transparency and accountability.

The program includes digitalization and green initiatives, rationalization of tax incentives and exemptions, and measures to assist taxpayers in boosting tax morale.