World Bank
Without reforms, Bangladesh’s GDP could fall below 4% by 2035: World Bank study
World Bank, in a study, has found three obstacles to Bangladesh’s economic reform. Without massive reforms, Bangladesh’s gross domestic product (GDP) could fall below 4 percent by 2035, it said.
The three obstacles are declining trade competitiveness, a weak and vulnerable financial sector, and unbalanced and inadequate urbanization. If these three obstacles can be addressed, the development will get a boost and growth will be more sustainable, the study noted.
According to the World Bank report, Bangladesh has been one of the top 10 fastest-growing countries in the world for several decades. But there is no reason to be complacent. Economic boom is never a permanent trend, the report said.
Also read: Bangladesh’s GDP likely to grow by 6.6% in FY 2023: ADB
Growth in fast-developing countries is always at high risk. Few countries have sustained high growth for long periods. Only one-third of the countries in the top 10 continued to experience high growth over the next decade, the report said.
World Bank has made some recommendations to sustain economic growth. For example, to maintain growth in exports, products should be diversified.
Apart from this, Bangladesh’s tariff rate is higher than other countries, due to which the trade capacity is decreasing.
Also read: Commit 2% of GDP to climate finance each year: civil society organisations
Regarding the banking sector, World Bank said, it will play an important role in future economic development. Although the financial sector has improved in the last four decades, it is still not sufficient, the report said.
On the other hand, urbanization is essential for Bangladesh’s next development stage. Attention should be paid to balanced urbanization, the report said.
Ahsan H. Mansur, Executive Director of Policy Research Institute of Bangladesh and a former IMF official said, “I fully agree with what the World Bank has said. Our first-generation reform is done. The second and third-generation reforms were to take place. But we have not yet initiated the second-generation reforms.”
Read Do more to support micro, small, medium-sized enterprises: UN
Bangladesh is gradually falling behind other countries, including Vietnam. “With the current policies, we cannot take per capita income to $12,000. We have no alternative to human resource development.” He added.
Nasrul Hamid urges World Bank to expedite funding for power, energy projects
State Minister for Power, Energy and Mineral Resources Nasrul Hamid has urged World Bank to expedite its funding to projects in Bangladesh’s power and energy sector.
He made the request while holding a bilateral meeting today with visiting World Bank Vice President for South Asia Region, Martin Raiser, at the ministry, said a release of the ministry.
It was noted at the meeting that two projects for gas meters installation have been approved by World Bank – implementation of which will begin from January 2023. There are 6 projects in the power sector being funded by World Bank.
Read:Dependence on LNG import to continue, more terminals to be set up: Energy Advisor
Both sides discussed various issues of mutual interest during the meeting.
The state minister focused on achievements, expectations and challenges in power and energy at the meeting.
He said electric vehicles and hydrogen will contribute greatly to the power and energy sector in the future.
“World Bank can play a major role in formulating a policy on hydrogen energy and electric vehicles to encourage the stakeholders in the sector,” Nasrul Hamid noted.
He sought World Bank’s cooperation to turn Bangladesh Power Management Institute into an organization of international standard.
Nasrul Hamid said it is necessary to further strengthen the partnership with World Bank in capacity building of the entities in the power sector to deal with wind power, transmission and distribution systems.
A wide range of issues like renewable energy, captive power, climate change, global energy crisis, solar irrigation pumps, lithium batteries, hydropower, regional power trade, net metering and rooftop solar, green building, efficient and cost-effective use of electricity and energy, oil refineries, land-based LNG terminal also came up for discussion.
Read: Govt working to revise renewable energy policy: Recent primary fuels crisis a reason
The World Bank Vice President expressed his satisfaction in working with Bangladesh and said that the focus on capacity building, regional cooperation and implementation of different projects is very promising.
He said promotion of renewable energy and the exploration of new areas of potential investment are putting Bangladesh in focus.
The World Bank top executive expressed interest in issues related to efficiency improvement, renewable energy and cross border power trade.
Senior Secretary of Energy and Mineral Resources Department Md. Mahbub Hossain, Power Secretary of Md. Habibur Rahman, World Bank South Asia Regional Director (Infrastructure) Guangzhe Chen and Acting Country Director Dandan Chen were present during the meeting.
Bangladesh made impressive achievements in economic growth: World Bank VP
World Bank Vice President for the South Asia Region, Martin Raiser arrives in Dhaka on Monday (September 19, 2022) on his maiden visit to Bangladesh.
“Bangladesh has made impressive achievements in development and economic growth. The World Bank is proud to be a partner in this remarkable journey for the past 50 years,” said Raiser on Saturday ahead of his visit to Bangladesh.
Read: Continued investment in coastal resilience critical for sustainable growth: World Bank
“As the countries in South Asia grapple with a multitude of shocks from COVID to climate change and rising global inflation, I look forward to learning about Bangladesh’s experience in building resilience,” he added.
During his three-day visit to the country, Raiser will meet Finance Minister AHM Mustafa Kamal, along with other senior government officials, and discuss World Bank support to address the country’s development priorities.
He will also meet development partners, leaders from the private sector, civil society, and think tanks, said the global lending agency on Sunday.
Raiser, a German national, assumed the role of the World Bank Vice President for the South Asia Region on July 1, 2022.
Read: World Bank to provide US$300 million to help Bangladesh’s pandemic response
Before taking on this role, he worked as the Country Director for China, Mongolia, and Director of Korea. He also held positions of the Country Director for Turkey and Country Director for Brazil.
The World Bank was among the first development partners to support Bangladesh following its independence.
Since then, the World Bank has committed more than $37 billion in grants, interest-free, and concessional credits to the country.
Continued investment in coastal resilience critical for sustainable growth: World Bank
With increasing climate risks, Bangladesh needs to continue investments to strengthen climate resilience in the coastal zones to protect the development gains, says a new World Bank report launched on Monday.
The report, “Bangladesh: Enhancing Coastal Resilience in a Changing Climate” highlights the country’s journey to reducing vulnerability to climate change and recommends further actions towards improving the resilience of its coastal region.
It analyzes the drivers of risks, how the government has reduced these risks, and offers new perspectives and innovative solutions.
Also read: World Bank to provide US$300 million to help Bangladesh’s pandemic response
Despite vulnerability to climatic risks, Bangladesh has emerged as a global leader in climate change adaptation and is known for proactively investing in resilience. It shows how long-term investments in disaster risk reduction save lives, reduce economic losses, and protect development gains.
This was possible due to a range of initiatives backed up by a strategic policy framework, from grassroot-level adaptation and community-based early warning systems to structural investments in infrastructure complemented by nature-based solutions and fostering innovation. Since independence in 1971, Bangladesh has reduced cyclone-related fatalities by 100-fold.
However, a rapidly growing population, environmental degradation, and increasing climate risks are putting pressure on the existing natural and infrastructure systems in the coastal zone which is home to about 40 million people. Bangladesh needs to take further immediate actions to improve resilience.
“Coastal resilience is not a static goal to be met, but rather a continuous process of adapting to changing conditions and finding synergies between development objectives,” said Dandan Chen, World Bank Acting Country Director for Bangladesh and Bhutan.
“For the last fifty years, the World Bank has supported Bangladesh to build climate resilience and improve disaster risk management. Today, the country shares valuable experience in improving disaster preparedness and climate resilience and is an inspiration for other climate-vulnerable nations,” Chen said.
The report finds that further investments in coastal resilience would produce an array of economic, social, and environmental benefits for Bangladesh.
It lays out seven key recommendations to strengthen the resilience of the coastal region, including strengthening operation and maintenance of infrastructure; recognizing local knowledge; and utilizing state-of-art modeling tools.
Given the changing climate and dynamic coastal processes, a risk management framework should act as the guiding principle for adaptive delta management.
Also read: World Bank happy, congratulates Bangladesh on Padma Bridge
Infrastructure investments need to be complemented with nature-based solutions.
The coastal area can benefit from inclusive community participation and livelihood adaptation for sustainable resilience.
Lastly, establishing an integrated framework that goes beyond risk reduction and includes growth, well-being, and sustainable development at its core.
“Given the significant investment need, we can learn from past interventions and find innovative solutions. This report provides a first-of-its-kind analysis of all large investment projects since the 1960s”, said Swarna Kazi, World Bank Senior Disaster Risk Management Specialist and co-author of the report.
“A key lesson learned is that there is huge potential in Bangladesh for nature-based solutions or hybrid solutions with a mix of green-grey infrastructure,” added Ignacio Urrutia, World Bank Senior Disaster Risk Management Specialist and co-author of the report.
This report complements the forthcoming Bangladesh Country Climate and Development Report (CCDR), the World Bank Group’s new diagnostic report that integrates climate change and development considerations.
Since 1972, the World Bank is helping Bangladesh build coastal and climate resilience and disaster preparedness. The first five World Bank projects committed to Bangladesh in 1972, included support to improve disaster preparedness in the coastal area in the aftermath of deadly cyclone Bhola.
Currently, with an ongoing program of $1.9 billion, the World Bank is helping Bangladesh to build climate resilience through multipurpose cyclone shelters, embankments, early warning systems, weather services, and afforestation.
World Bank to provide US$300 million to help Bangladesh’s pandemic response
Bangladesh and the World Bank on Sunday signed a $300 million financing agreement to help the country strengthen its local urban institutions to respond to and recover from the COVID-19 pandemic and improve preparedness to future shocks.
The Local Government COVID-19 Response and Recovery Project will benefit 39.9 million urban residents in all eight divisions. It will help its cities and towns to build back better as they recovers from the pandemic and prepare for future shocks, including climate change, disasters, and disease outbreaks, according to a release from the World Bank.
In addition, 329 municipalities and 10 city corporations will receive funds bi-annually from the project to improve critical urban services and infrastructures to mitigate and respond to climate change impacts, disasters, and future disease outbreaks.
Also read: World Bank happy, congratulates Bangladesh on Padma Bridge
The agreement was signed by Economic Relations Division Secretary Sharifa Khan Sharifa Khan and World Bank Country Director for Bangladesh and Bhutan Mercy Tembon Mercy Tembon on behalf of the Government and the World Bank, respectively.
The credit is from the World Bank’s International Development Association (IDA), which provides concessional financing, has a 30-year term, including a five-year grace period.
World Bank Country Director for Bangladesh and Bhutan Mercy Tembon said that Bangladesh is rapidly urbanizing. With around 36 per cent of the population living in urban areas the city corporations and the municipalities can play a critical role in helping the urban poor recover from the pandemic as well as prepare to handle future shocks.
“This project will help local government institutions take the right measures to move toward climate-smart urbanization and prepare for resilience in future shocks.”
The project will carry out labor-intensive public works that in one hand will ensure water supply and sanitation, drainage, and other critical services benefitting the low-income areas, slums, and areas exposed to high disease outbreak and disaster risks and in other hand create jobs for the poor urban people. It will create 1.5 million days of short-term work as well as jobs for 10,000 women under the public works scheme.
All infrastructures will incorporate energy efficiency measures, including solar panels and cool roof measures in municipal buildings and services.
Also read: World Bank loan to bolster Bangladesh's economic growth
The project will install hand-washing stations and toilets, including separate facilities for women and improve sanitization in public spaces such as markets, burial grounds, and offices.
It will also help disabled people to access municipality-owned health clinics and conduct awareness programs on vaccines and other COVID-19 protocols, as well as outreach on gender-based violence and climate risks.
ERD secretary Sharifa Khan said that with quick and proactive measures, Bangladesh government will be able to address impact of the COVID 19 pandemic.
“The project will further support to ensure that the urbans areas remain prepared to any future shocks while benefitting the urban poor through job creation, better services, and infrastructure.”
Martin Raiser World Bank's new VP for S Asia
The World Bank has appointed Martin Raiser as its new Vice President for the South Asia Region.
He is an economist and development expert with almost two decades of experience at the World Bank Group.
As the regional Vice President for South Asia, Raiser will manage Bank relations with Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka, and oversee a portfolio of projects, technical assistance and financial resources worth almost US$55 billion, said the global lending agency on Friday.
Read: Over $500m WB loan to modernise grids in Dhaka & Mymensingh
“The World Bank has been a steadfast partner in South Asia as the region faces multiple crises, including the COVID-19 pandemic,” said Raiser.
“I look forward to working together with countries in the region to help address these challenges while laying the foundations and capitalizing on the opportunities for green, resilient and inclusive growth.”
Under Raiser’s leadership, the World Bank will continue to support the South Asia region to address different macro, health and humanitarian crises, while advancing human capital development, supporting climate resilience and facilitating regional integration and cooperation.
Raiser has held several leadership positions in the organization.
Prior to his current role, he served as the World Bank’s Country Director for China and Mongolia, and Director for Korea.
Read: WB okays $1.03 billion to help improve regional trade in Bangladesh, Nepal
Raiser has also held positions as the Country Director for Brazil, Türkiye, Ukraine, Belarus and Moldova as well as Country Manager in Uzbekistan. Before joining the World Bank, Raiser worked for the Kiel Institute of World Economics and the European Bank for Reconstruction and Development, where he was Director of Country Strategy and Editor of the Transition Report.
A German national, Raiser holds a doctorate degree in Economics from the University of Kiel, Germany, and degrees in Economics and Economic History from the London School of Economics and Political Sciences.
His appointment is effective from July 1, 2022.
Over $500m WB loan to modernise grids in Dhaka & Mymensingh
Bangladesh and the World Bank on Wednesday signed a $515 million financing agreement to help nine million people get access to reliable power supply while transitioning to clean energy.
The agreement was signed by Economic Relations Division secretary Fatima Yasmin and Acting World Bank Country Director for Bangladesh and Bhutan, Dandan Chen, on behalf of the Bangladesh government and the World Bank, respectively.
Read: WB okays $1.03 billion to help improve regional trade in Bangladesh, Nepal
The agreement includes a $15 million grant from the Clean Technology Fund to support Battery Energy Storage Systems (BESS).
The credit is from the World Bank’s International Development Association (IDA), and has a 35-year term, including a five-year grace period.
The Electricity Distribution Modernization Program will support the digitisation and modernisation of 25 Palli Bidyut Samitis in Dhaka and Mymensingh divisions and reduce system losses by over 2 percent.
The Program will increase Bangladesh Rural Electrification Board’s (BREB) delivery of power by 6,790 GW while improving climate resilience of the system, according to a release.
'The Program is aligned with the government’s Integrated Energy and Power Sector Master Plan, currently under preparation, which will help establish a low carbon energy system,” said secretary Fatima.
She said that generating clean and reliable power can help rural communities to increase productivity and cope with events brought on by climate change.
“The government of Bangladesh has prioritised access to power in the last decade and now the entire population has access to power. The installed generation capacity increased five-fold to 25 GW in the same period,” Chen said.
Through this Program, new and emerging technologies will further strengthen the efficiency and reliability of power supply in the country to meet the needs for faster economic growth, he added.
The Program will support solar metering connections for over 100 customers, bringing 150 MW of new rooftop solar capacity into the grid.
Read: WB approves $120 mln loan to develop climate smart agriculture, water management
It will improve and construct 31,000 kms of distribution lines and deploy 200,000 advanced meters, the release said.
In addition, the Program will help strengthen BESS and distributed renewable energy through preparation of road maps for deployment.
This would lead to an annual reduction of carbon emissions by 41,400 metric tonnes.
WB okays $1.03 billion to help improve regional trade in Bangladesh, Nepal
The World Bank on Wednesday approved $1.03 billion of financing to help improve regional trade in Bangladesh and Nepal by reducing trade and transport costs and transit time along the regional corridors.
The Accelerating Transport and Trade Connectivity in Eastern South Asia (ACCESS) Program Phase 1 will help the respective governments address the key barriers to regional trade ─ manual and paper-based trade processes, inadequate transport and trade infrastructure, and restrictive trade and transport regulations and processes, according to a release from the World Bank.
The Phase 1 of the program will help replace lengthy manual and paper-based trade processes with digitized automated solutions in Bangladesh and Nepal.
The automation will enable faster border crossing times and install electronic tracking of truck entry and exit, electronic queuing, and smart parking.
The program will also help improve selected road corridors and upgrade key land ports and custom infrastructure, while ensuring green and climate-resilient construction.
This will help the integration of landlocked Nepal and Bhutan with the gateway countries of Bangladesh and India.
“Regional trade offers enormous untapped potential for the countries of South Asia. Today, regional trade accounts for only 5 percent of South Asia’s total trade, while in East Asia it accounts for 50 percent,” World Bank Vice President for South Asia Hartwig Schafer said.
Read: World Bank happy, congratulates Bangladesh on Padma Bridge
He mentioned that South Asia can boost economic growth significantly and create opportunities for millions of people by increasing regional trade and connectivity.
The $753.45 million ACCESS Project in Bangladesh will upgrade the 43 km two-lane Sylhet-Charkai-Sheola road to a climate-resilient four-lane road, connecting the Sheola Land Port with the Dhaka-Sylhet Highway.
This will cut down travel time by 30 percent. The project will support digital systems, infrastructure, and more streamlined processes at Benapole, Bhomra, and Burimari land ports, the three largest land ports in Bangladesh handling approximately 80 percent of land-based trade.
It will also support the modernization of the Chattogram customs house which handles 90 percent of all import/export declarations in Bangladesh.
“While the trade between Bangladesh, Bhutan, India, and Nepal grew six times from 2015 to 2019, the unexploited potential for regional trade is estimated at 93 percent for Bangladesh,” World Bank Country Director for Bangladesh and Bhutan Mercy Tembon said.
“The project will help Bangladesh improve regional trade and transport and automation of processes will build resilience to crises like the COVID-19 pandemic.”
Read: World Bank presents its areas of interest for future projects in Bangladesh
The $275 million ACCESS Project in Nepal will upgrade the 69 km two-lane Butwal-Gorusinghe-Chanauta road, along the East-West Highway, to a climate-resilient four-lane highway.
This is expected to reduce travel time by 30 percent, thus providing better access to India’s western seaports.
The project will construct market areas along the highway with dedicated spaces for women entrepreneurs and traders to ensure that women can benefit from the enhanced economic opportunities.
It will also support digital systems and capacity building to enhance trade and customs processes in particular at Birgunj and Bhairahawa border points.
“Nepal has large untapped potential for regional trade and exports. Low regional trade is often a result of the high cost of connectivity,” said Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka.
“The project will help unlock Nepal’s economic potential through better connectivity and trade, both between the provinces as well as regionally among Nepal and other countries to support a green, resilient, and inclusive development.”
“It is highly critical to ensure trade growth, long-term sustainability and resilience of investments, while minimizing degradations on the ecosystems along the Nepal’s road network, which carries 90 percent of passengers and goods movement,” said Oceane Keou, World Bank Task Team Leader of the Nepal Project and co-Task Team Leader of the program.
“The project will implement an innovative green and resilient highway corridor concept in Nepal, based on a landscape-level development approach.”
The program will also help advance Bangladesh’s and Nepal’s preparedness and subsequent implementation of the Motor Vehicle Agreement (MVA). In the second phase, the program will include Bhutan.
“A key focus of the ACCESS program is to support solutions that can most effectively reduce dwell times at trade gateways, which is vital to lowering trade costs.
This entails greater border cooperation and coordination within and between countries, cutting down the physical inspection of goods, and simplifying regulations and processes,” said Erik Nora, World Bank Task Team Leader of the program.”
Read: World Bank helps improve livability of four Dhaka localities
Padma Bridge not just a structure, a dream come true: Momen
The Padma Bridge, set to be inaugurated Saturday, is not just a structure, it is a dream come true, Foreign Minister AK Abdul Momen said Friday.
"The nation is going to witness a momentous event tomorrow. This is going to be an emotional moment marking a turning point in our national life," he added.
"Building a bridge on the mighty River Padma has been a deep-rooted dream of the people as this will get our nation united I believe. But the challenges were huge. There were conspiracies from every direction," Momen said in a video message.
"All conspiracies were hatched to stop the construction of the Padma Bridge. But under the dynamic leadership of Prime Minister Sheikh Hasina, we beat all the challenges. We defeated all the conspiracies. We have achieved victory," the minister said.
On June 16, Momen said the World Bank (WB) must be "apologetic" and feel "sorry" considering that they did Bangladesh a "big injustice" by cancelling the funding for the Padma Bridge.
"There is no guarantee that big institutions (like WB) always do good things," he added.
Also read: Padma Bridge: FM says WB must be apologetic
Padma Bridge: FM says WB must be apologetic
Foreign Minister Dr AK Abdul Momen has said the World Bank (WB) must be "apologetic" and feel "sorry" considering that they did Bangladesh a "big injustice" by cancelling the funding for the Padma Bridge which is set to be inaugurated on June 25.
"There is no guarantee that big institutions (like WB) always do good things," he said while talking to television journalists at the Ministry of Foreign Affairs Thursday.
Minister Momen said the global lending agency should pay compensation to those who faced harassment and seek an apology from them, acknowledging the big injustice they had committed.
The Bangladesh government invited WB President David Malpass to attend the inaugural ceremony of the much-awaited Padma Bridge.
The Bangladesh Bridge Authority e-mailed the invitation to the chief of the multilateral lending agency Wednesday.
Earlier, Prime Minister Sheikh Hasina said her government's move to self-finance the Padma Bridge brightened Bangladesh's image globally. "Such a bold decision has also boosted the self-confidence and mental strength of the nation."
Also read: Padma Bridge inauguration: Invitation card sent to World Bank