The Asian Development Bank (ADB) on Tuesday (June 14, 2023) approved a $400 million loan to Bangladesh to advance reforms in domestic resource mobilization, improve efficiency and productivity of public spending, and help small businesses – especially women-led businesses – to access low-cost innovative bank financing. This loan is ADB’s second subprogram of the Sustainable Economic Recovery Program that was launched in October 2021 to support economic recovery after the COVID-19 pandemic. “This subprogram enables Bangladesh to enhance revenues, promote efficiency and transparency in public spending and public procurement, deepen the reforms of state-owned enterprises, and help small businesses and microentrepreneurs to access low-interest affordable credits from the banking sector,” said ADB Principal Public Management Economist for South Asia, Aminur Rahman. Read: Danish Minister Dan Jørgensen in Dhaka “The subprogram, with a strong focus on gender, climate change, and digitization, enables the government to strengthen its efforts to support income generation for the poor and vulnerable,” he added. The program will enhance income tax collection through the adoption of the new Income Tax Act, reduce tax loopholes, strengthen compliance and enforcement measures, and broaden the country’s tax net. Transparency and efficiency in public procurement will be enhanced through strengthening electronic procurement and electronic payment systems, while approval of public projects will be facilitated through the newly launched digital system of public project appraisal and approval process, according to ADB. Read: Letter from 6 members of European Parliament reflects views of signatories, Ambassador tells UNB  The new package supports the launch of innovative financing services by Bangladesh Bank through commercial banks to provide low-cost microcredit using digital channels and e-wallet. It facilitates bank lending to marginalized and landless farmers, small traders, and low-income earners. Micro and small businesses and women entrepreneurs who do not possess land or property will also be able to access finance based on their trade receipts and other forms of nonfixed collaterals, such as small equipment and machinery. Promoting gender equality and social inclusion and addressing the climate change agenda in public investment and national budgeting are some of the key activities of this new program. Promoting gender equality and social inclusion and addressing the climate change agenda in public investment and national budgeting are some of the key activities of this new program. Read: UN asked to engage more effectively with Myanmar to commence Rohingya repatriation

Finance Minister AHM Mustafa Kamal has dismissed a media report that Bangladesh is seeking a loan of $4.5 billion in aid for economic recovery.  “Neither we placed any proposal to IMF for loan, nor IMF made any offer to us,” he told reporters while briefing on the outcomes of the two consecutive meetings of the Cabinet Committee on Economic Affairs (CCEA) and the Cabinet Committee on Government Purchase (CCGP) virtually held on Wednesday.  He made remarks while a delegation of the International Monetary Fund (IMF) has been visiting the country and holding meetings with  Bangladesh Bank officials.  “Actually, a consultative committee of the IMF is now visiting the country which has no issue to discuss any loans proposal”, he added, saying, “We don’t need any loan from the IMF right at this moment. We made no request for any funding, not any proposal came from IMF”. Read: Default loans cross over 126 crore: Finance Minister He, however, said if any loan is taken from the IMF, Bangladesh will never accept any condition that will go against the interest of the country. Responding to a question, Kamal said he has no idea about any  such list  of the countries, prepared by the IMF where Bangladesh was shown as economically vulnerable. “Bangladesh never failed to service its foreign debts, including that of IMF. No multilateral lending agency ever had to write off Bangladesh's debts”, he said.   he said.  He also dismissed the media report that IMF has a different calculation about Bangladesh’s foreign exchange reserves. Bangladesh calculates its foreign exchange reserves at at $42 billion while IMF sees it much lower.  “We have been calculating our foreign exchange reserves like other countries do ”, he said. The finance minister also disagreed with rate of inflation at 7.5 per cent, released by the Bangladesh Bureaue of Statistics (BBS).  “I don’t admit such figure. Inflation is never calculated on weekly or daily basis... no country calculates in such a way”, he said.

Economists and business insiders said the stimulus loans for the big and small businesses have worked like oxygen to face a crisis during the pandemic period.  Former BB governor Dr. Salehuddin Ahmed told UNB that the central bank has done a tremendous job, emphasizing implementation of stimulus loans.  Despite some criticism of delayed disbursement, the BB’s contribution to economic recovery is appreciable, he said.  Read:BB asks banks to cut tax on service value of non-resident nationals Md. Jashim Uddin, president of the Federation of Bangladesh Chamber of Commerce & Industry (FBCCI) and Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) echoed similar sentiments.  They also acknowledged that the support of BB has worked to increase the confidence of businesses which helped them rebound in the production of the industries.  Latest update of stimulus loan disbursement shows that around Tk1.218 lakh crore (Tk1, 00,218 crore) has been disbursed so far in first and second phases from 10 incentive packages managed by Bangladesh Bank.  Of this, Tk 42,173 crore was disbursed to the industry and services sector, Tk 20,793 crore in cottage, small and medium enterprises, Tk 513 crore in refinancing loans in the pre-shipment sector, and Tk 2,492 crore disbursed among low-income professional farmers and small traders.  Besides, Tk 21,250 crore from the export development fund, Tk 1,933 crore from SME sector loan guarantee scheme, Tk 5,000 crore for workers in export-oriented industries, Tk 1,390 crore for consumer interest subsidy and  Tk 4466 crore for agriculture sector refinancing scheme.  has been distributed.  However, a fund of Tk 1,000 crore was set up for the salaries and allowances of the employees of hotels, motels and theme parks in the tourism sector but no loan was disbursed.  The BB started implementation of the second phase of 10 stimulus loan packages from July of current fiscal year 2021-22 through banks and FIs. The BB released an update of stimulus loan activities till January 11, recently. It said banks and financial institutions (FI) have disbursed Tk 15,000 crore among 67,000 entities in big and small categories across the country till January 11, 2022.  According to the BB, in the first phase, Tk 32,703 crore was disbursed from the announced incentive fund of Tk 40,000 crore for the industry and services sector. Some 3,306 units have received this loan. In the second phase Tk 9,470 crore has been distributed from this fund to 972 businesses.  Although the interest rate of this fund is 9 percent, the customers have to pay 4.5 percent while the government bears the rest.  Besides, Tk 5,407 crore has been disbursed in the second phase under the announced stimulus package for cottage, small and medium enterprises. Around 35,760 enterprises have received loans from this fund of Tk 20,000 crore. In the first phase, a loan of Tk 15,386 crore was given from this fund to 97,814 enterprises.  The interest rate on this loan is 9 percent, but here again the government is giving a 5 percent subsidy on  the interest rate.  Read: BB asks banks to follow Covid guidelines till Feb 21 In the agriculture sector Tk 379 crore has been disbursed to 30238 farmers/ clients from the agriculture refinance funds in the second phase. In the first phase Tk 4295 crore was distributed to 1.85 lakh farmers and agro based industries.  The farmers and agro industries have received the loans at 4 percent interest rate and Bangladesh Bank has provided the refinance funds to the lender banks at 1.0 percent interest rate.  Bangladesh Bank officials said that there was not as much interest to receive stimulus loans in the second phase. Demand for  stimulus loans was higher among the businesses in the first phase.  In fact, the time has now come for those who have taken loans to repay their loans, they told UNB. And this too is a sign of the recovery underway. 

The government of South Korea has approved US$ 100 million in concessional loan from Economic Development Cooperation Fund (EDCF) to help the recovery of Bangladesh’s economy hit by the Covid-19 pandemic. The new concessional loan of US$ 100 million will be used to implement several projects aimed at advancing public finance management system and improving small and medium-sized businesses struggling from the repercussion of the pandemic. The amount would be released as soon as the loan agreement is signed between the Korea EXIM Bank and the Bangladesh Government which is expected to be done within the year. Also read: Korea promotes young entrepreneurs’ development through business curriculum at universities EDCF is a Korea’s development financing program for assisting the socio-economic development of developing countries. The Republic of Korea has already provided US$ 50 million of EDCF loan as budgetary support in December 2020 to to help Bangladesh’s efforts for fighting against the COVID-19 pandemic. It is the second provision of this type of concessional loan. It will be the first EDCF loan to be implemented under the new EDCF Framework Agreement for the years 2021 through 2025 which was signed between the two Governments on 24 October 2021, said the South Korean Embassy in Dhaka on Monday. Also read: S Korean envoy Lee for diversifying collaboration with Bangladesh According to the agreement, the Korean government will provide up to US$ 700 million of concessional loans to the government of Bangladesh for the five year period. Bangladesh is the second largest recipient of the EDCF loans worldwide in aggregate amount. So far, the Republic of Korea has funded 24 development projects of Bangladesh with total amount of USD$ 1.2 billion US dollars through the EDCF.

Bangladesh and the Asian Development Bank (ADB) on Monday signed an agreement for $250 million in policy-based loan to support Bangladesh’s economic recovery following the coronavirus disease (COVID-19) pandemic. The assistance is under the first subprogram of the programmatic $500 million Sustainable Economic Recovery Program, according to a press release. Economic Relations Division (ERD) Secretary Fatima Yasmin and ADB country director Manmohan Parkash signed the loan agreement on behalf of Bangladesh and ADB, respectively at a hotel. Also read: Bangladesh and ADB jointly launch country partnership strategy The Sustainable Economic Recovery Program will facilitate a rapid and sustainable recovery from the COVID-19 pandemic, generate employment, and expand economic activities for micro-entrepreneurs and small businesses.

The Asian Development Bank (ADB) Friday approved a $250 million policy-based loan to support Bangladesh's economic recovery following the Covid-19 pandemic. This is the first subprogramme of the programmatic $500 million Sustainable Economic Recovery Programme. The objective of the Sustainable Economic Recovery Programme is to facilitate rapid and sustainable recovery from the pandemic, generate employment, and expand economic activities for micro-entrepreneurs and small businesses. This will be pursued through policy reforms that will create fiscal space to enhance public expenditure and support the recovery and growth of cottage, micro, small, and medium-sized enterprises (CMSMEs). The loan will support the government's planned public investment in education, health, social protection, and infrastructure and help to stimulate economic activities and economic recovery. It is also aligned with the core objectives of the country's Eighth Five-Year Plan and supports the aspiration of Bangladesh to become an upper-middle-income country by 2031. Read: ADB unveils new partnership strategy for Bangladesh "The fiscal space created under the programme will allow the government to prioritise expenditures and upscale investment in social and economic infrastructure," said ADB Principal Financial Management Specialist Srinivasan Janardanam. "The programme is expected to increase the efficiency in public investment management and create a favourable environment for access to credit, particularly for the poor and vulnerable."

The Asian Development Bank (ADB) has revised Bangladesh's growth forecast for the current fiscal amid fears of a third wave of the Covid pandemic. In its latest report, the regional lender has pegged Bangladesh’s gross domestic product (GDP) growth at 6.8 percent in the current fiscal.  GDP is a monetary measure of the market value of all the final goods and services produced in a country in a specific time period. Read:ADB unveils new partnership strategy for Bangladesh The growth projection for the current fiscal reflects a strong recovery supported by strengthening manufacturing, continued expansion in the global economy and effective government recovery policies, the ADB said. On the other hand, inflation is expected to slightly edge up to 5.8 percent and current account deficit to narrow down to 0.6 percent of GDP in financial year (FY) 22. However, FY22 growth is expected to remain below pre-pandemic levels, as per the Asian Development Outlook (ADO) 2021 report released on Wednesday. The main risk is the re-escalation of Covid infections in Bangladesh or major advanced economies, clipping domestic and external demand, according to the global lender. Read: ADB okays $1.78 billion for Dhaka-Sylhet trade corridor “The government’s policies for saving lives while protecting livelihoods underpinned the recovery process in Bangladesh, making it one of the few countries in the world sustaining commendable economic growth in recent difficult times,” said ADB Country Director Manmohan Parkash. He said that prudent macroeconomic management, and efficient implementation of stimulus measures and social protection programmes have helped. "Continued efforts for job creation, quick vaccination, and improving domestic resource mobilization will further accelerate the recovery process." Appreciating recent initiatives in the areas of financial inclusion, and expanding social protection, Parkash said, “Sustained reforms to increase business competitiveness, foreign investment, export diversification, skills development, and technology adoption will stimulate private sector investments and hasten economic recovery." In FY22, improving consumer confidence and the government’s fiscal and monetary stimulus measures are expected to boost private and public investment. Read: ADB lowers its economic growth forecast for developing Asia The central bank’s expansionary and accommodative monetary policy is expected to support the projected growth while keeping inflation contained. Strong remittances will stimulate private consumption, the ADB said. Inflation is expected to edge up to 5.8 percent in FY2022 reflecting recovery in economic activity. Continued implementation of the increased fiscal and monetary stimulus measures is expected to create inflationary pressures. A good crop outlook, consumer caution and underutilized production capacity should mitigate any upward pressure on prices. Domestic administered prices for fuel may cushion the impact of increased crude oil prices, the report said.

Foreign Minister Dr AK Abdul Momen has said a successful pandemic recovery must involve universal vaccination ending vaccine inequality. He referred to the unfortunate manifestation of vaccine nationalism and called the world to stand united against such vaccine inequity. “It’s time for development partners to be more humane and help the deserving without discrimination. Vaccine should be a public good,” said the Foreign Minister while speaking at the United Nations high-level Forum on the Culture of Peace held at the United Nations General Assembly on Tuesday. This year’s high-level Forum on the Culture of Peace focused on the transformative role of the Culture of peace in promoting inclusion and resilience in the post Covid recovery. The daylong event included an inaugural session, a plenary session and a virtual panel discussion. “An essential component of our recovery effort from the pandemic must involve a peaceful environment in which all of us irrespective of our caste, creed, colour, race and religion can meaningfully contribute to our re-building efforts. There is no alternative to inculcate the Culture of Peace in our efforts to build back better in the post-Covid recovery,” Dr Momen said. The Foreign Minister recalled Bangladesh’s pioneering role in the adoption of the UN General Assembly Resolution on the Culture of Peace since 1999 and organization of the high-level forum since 2012. Read: 'Vaccine inequity' concerns IMF, WB, WHO, WTO Apart from the Foreign Minister, the President of the General Assembly, High Representative of UN Alliance of Civilization, Chef de Cabinet of UN Secretary General and the Representative of UNESCO delivered remarks at the inaugural session.

Putting forward six suggestions to consider in framing post-Covid-19 economic recovery plan, Prime Minister Sheikh Hasina on Tuesday underscored the need for taking immediate collective action to help mitigate the impacts of the pandemic. "As we’re witnessing the challenges, we need to take immediate collective and concerted action to help mitigate the impacts of the pandemic through expanding trade, business and investment for our common prosperity," she said in a pre-recorded message played in the three-day Qatar Economic Forum Virtual. The six suggestions the Prime Minister put forward in the Forum include: Taking ambitious climate action to meet the goal of the Paris Agreement, leveraging science, technology, and innovation for closing the digital divide; and having targeted international support to revitalize global trade and export earnings. The suggestions also include contributing to the reintegration plan of migrant workers highlighted as vulnerable group by the host countries, business leaders and investors in the region should; ensuring new international support measures for the graduating LDCs to prevent any possible sliding back due to the pandemic; and having an inclusive, sustainable and holistic recovery plan for shared prosperity. Also read: Covid antibody higher among Dhaka slum dwellers: icddr,b In order to ensure sustainable and equitable order after the pandemic, there is a need for a whole-of-the-world approach now. Hasina said the Covid-19 pandemic has exposed the world to multiple setbacks and fragilities as it has already claimed millions of lives and battered the economies. "We need strong global cooperation to overcome this difficult time," she told the Forum themed ‘Reimagining the World’. She said the Qatar Economic Forum has provided the platform to identify opportunities, and share ideas and solutions to achieve that goal, and prepare for countering the future crises efficiently. Saying that the Covid-19 is a litmus test for global solidarity, Hasina said the 2030 Agenda, the Paris Agreement, and the Addis Ababa Action Agenda can be the blueprint to overcome this crisis. The Prime Minister said she firmly believed that the Covid-19 vaccines should be declared as global public goods.  "And the developing countries and LDCs that have the capacity should be given the necessary support to produce the vaccines." Also read: SDGs: PM says Bangladesh in top form for prudent planning She also said over the past few years, the world has been observing the rise of populism, anti-globalization sentiments and economic protectionism around the world.  "We’ve to stand together to strengthen multilateralism. As a precondition to expanding economic activities, we need to ensure peace and stability everywhere in the world." Talking about her own country, she said Bangladesh has achieved sustained growth of more than 6 percent over the past decade. The country received the final recommendation to graduate from the LDCs. While fighting the current pandemic, it has been trying to make a balance between lives and livelihoods, Hasina added. "Our government has so far announced various stimulus packages amounting to 15.1 billion US dollars. Despite the pandemic, our GDP growth reached 6.1 percent in 2020-2021, one of the highest in the world," she said. The Prime Minister said the Digital Bangladesh vision launched by the government 10 years back has helped the country adapt quickly with the new business and work environment triggered by Covid-19.

The Asia-Pacific region needs large, yet attainable, investments in resilience to protect development gains amid a fragile and inequitable post-COVID-19 economic recovery, says a report released on Tuesday.  The report was released by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) in Bangkok.  Also Read: ADB forecasts developing Asian economies in recession The  Economic and Social Survey of Asia and the Pacific 2021: Towards post-COVID-19 resilient economies forecasts that, on average, developing Asia-Pacific economies are expected to grow by 5.9 per cent in 2021 and 5 per cent in 2022, after having experienced an estimated contraction of 1 per cent in 2020. Despite a reasonably strong rebound expected in 2021, a “K-shaped recovery” is likely, with poorer countries and more vulnerable groups marginalized in the post-pandemic recovery and transition period.  The Survey estimates that because of the pandemic, an additional 89 million people in the region could have been pushed back into extreme poverty in 2020 at the $1.90 per day threshold, erasing years of progress in poverty reduction.  Working-hour losses in 2020 equaled 140 million full-time jobs, while severe disruptions of economic activity and education are likely to have caused a significant setback to human capital accumulation and productivity in the region. For a more robust and inclusive recovery, the Survey calls for a more synchronized COVID-19 vaccination programme across countries and highlights opportunities to leverage regional cooperation.  At the same time, it recommends that fiscal and monetary support should be sustained, as premature tightening could increase long-term scars.  “COVID-19 is a shock like no other and it requires a response like no other,” said Armida Salsiah Alisjahbana, United Nations Under-Secretary-General and Executive Secretary of ESCAP.  “The time is now for the Asia-Pacific region to seize this opportunity to speed up and make its transition towards more resilient, equitable, and green development the centerpiece of the post-pandemic economic recovery.” Looking beyond the pandemic, the Survey examines the broader risk landscape facing Asia-Pacific countries, including epidemics, natural disasters and financial crises.  It finds that adverse shocks, both economic and non-economic, result in permanent economic, social and environmental losses, and advises countries to take a more comprehensive approach to building resilience against future shocks.  Specifically, the Survey proposes a “build forward better” policy package for resilient post-COVID-19 economies that aims to ensure universal access to healthcare and social protection, close the digital divide and strengthen climate and clean energy actions.  It estimates that the package would reduce the number of people living in poverty in the region by almost 180 million people and cut carbon emissions by about 30 per cent in the long run. Notably, the package would result in a modest fiscal and debt burden if accompanied by bold policy actions, such as ending fossil fuel subsidies and introducing a carbon tax.  Among other potential financing solutions, the Survey also recommends debt swaps-for-development initiatives for countries with special needs and those with limited fiscal space.  It also calls for international assistance to least developed countries burdened with significant “resilience gaps.”  For his part, United Nations Secretary-General Antonio Guterres has recommended in a policy brief on Preventing Debt Crises In the Era of COVID-19 and Beyond: The Time to Act is Now, that countries address immediate liquidity constraints; debt overhangs and creating space for investment in crisis response, the Sustainable Development Goals and climate action; and reformation of the international debt architecture. In conclusion, the Survey recommends that countries in the region should respond aggressively to adverse shocks to minimize the reversal of hard-won development gains. Swift and robust policy responses are needed to safeguard sustainable development in crisis times, and risk management must become central to development planning and policymaking.    Produced annually since 1947, the Economic and Social Survey of Asia and the Pacific is the oldest United Nations report on the region’s progress.  The Survey provides analyses to guide policy discussion on the current and emerging socio-economic issues and policy challenges to support inclusive and sustainable development in the Asia-Pacific region.