World Bank has approved $500 million loan to help improve trust in Bangladesh’s public institutions through increased accountability and transparency and enhance corporate governance and stability in the financial sector.
The Strengthening Governance and Institutional Resilience Development Policy Credit supports public and financial sector reforms, which are key for sustained economic growth, according to a press release.
The reforms will also lay the foundations for improved services for vulnerable households.
Bangladesh has one of the lowest revenue-to-GDP ratios among middle-income countries, significantly limiting the government’s ability to deliver quality services to its people, said the press release.
World Bank predicts worst decade for global growth since 1960s
This programme supports reforms aimed at improving domestic revenue mobilisation.
The reforms would make tax administration and policy-making more transparent and efficient aligning with international best practices.
Further, it will support reforms to move to a more strategic, systematic, and transparent approach to managing tax exemptions that will require Parliamentary approval for all exemptions, which would be a significant step away from current ad hoc practices.
The financing will also strengthen corporate governance and risk management frameworks by aligning financial reporting with international standards and increasing transparency.
It will help improve financial sector stability by providing the Bangladesh Bank with a complete range of resolution powers to address vulnerabilities in the banking sector.
A third strand of reforms will improve transparency, accountability and efficiency across the public sector.
By 2027, all government project appraisal documents will be required to be made public. Public procurement system will be required to use electronic government procurement (e-GP), disclose of beneficiary ownership, and remove price caps to foster competition and reduce corruption risks.
To improve financial accountability and transparency in the public sector, the Office of the Comptroller and Auditor General’s auditing capacity will be strengthened.
The independence of the Bangladesh Bureau of Statistics will improve data transparency, leading to better service delivery for citizens.
Finally, cash transfer programs for the poor and vulnerable will be made more effective with the operationalisation of a dynamic social registry.
World Bank Interim Country Director for Bangladesh Gayle Martin said that Improvements in how public finances are managed are important for Bangladesh’s economy to grow sustainably.
“The government is taking ambitious steps to make its institutions more open and answerable, so they can serve the people better,” he said.
He mentioned that this financing will support the government's efforts to strengthen its policies and regulatory framework to build a stronger, more inclusive economy that benefits everyone.
“Through another project that was approved last week, we are supporting the government to implement these reforms.”
World Bank to provide $30 mln more for Bangladesh’s power transmission network
World Bank Senior Economist and Task Team Leader for the project Dhruv Sharma said that This Financing is closely aligned with the citizen’s desire for transparency and accountability and will support Bangladesh’s ambitious reform agenda for improving domestic revenue mobilization, financial sector stability and governance, and public sector performance.
“Improving data systems and moving towards improved selection of beneficiaries will ensure that government resources effectively reach poor and vulnerable households, especially during economic shocks and natural disasters.”