ADB
ADB to provide $150 million targeted at CMSE's, job creation
Bangladesh and the Asian Development Bank (ADB) on Monday signed agreements for $150 million in loan financing for cottage, micro, and small-sized enterprises (CMSEs) and creating jobs for promoting socio-economic recovery after the coronavirus disease (COVID-19) pandemic.
The assistance under the Supporting Post-COVID-19 Small-Scale Employment Creation Project will rejuvenate CMSEs operated by youth, rural entrepreneurs, returning migrant workers, particularly women, who have been hit hard by the pandemic, according to an ADB release.
Economic Relations Division (ERD) Secretary Fatima Yasmin and ADB Country Director Edimon Ginting signed the agreements on behalf of Bangladesh and ADB, respectively at a ceremony at ERD.
The loan to Bangladesh Bank, the nation’s central bank, will be on-lent to participating financial institutions (PFIs), which in turn will help 30,000 CMSEs operated by the beneficiaries.
The project will create at least 45,000 employment opportunities by December 2025. It has targeted to disburse 20 percent of the funds to microbusiness led by women to support their recovery as they have limited access to finance and have severely been affected by the pandemic due to their high concentration in retail, travel, and hospitality sectors.
ADB will provide an additional $900,000 technical assistance grant from its Technical Assistance Special Fund for Bangladesh Bank and participating financial institutions to help them strengthen their risk management capacities, business process, and information systems.
The assistance will also boost their support of CMSEs by incorporating mobile finance, value chain financing, and sustainable financing tackling climate change.
READ: ADB approves $150 million loan to Bangladesh to help recovery of Covid-hit enterprises
This project builds on the $250 million policy-based Strengthening Social Resilience Program, approved by ADB in June 2021, to strengthen Bangladesh’s social protection programs and resilience of vulnerable groups.
It also complements the $50 million additional financing to the ongoing Microenterprise Development Project, approved in December 2020, to help restore economic activities of microenterprises affected by COVID-19 in the country.
“The assistance will support Government’s efforts to accelerate socioeconomic recovery from the COVID-19 pandemic,” ERD secretary Fatima Yasmin said.
ADB country director Edimon Ginting said that the project will reinforce ADB’s long-standing support to Bangladesh in financial inclusion and address key barriers for financing CMSEs by developing a comprehensive action plan that will tackle sector-wide challenges, promote best practices at the banks, and expand training and business development support to the borrowers said Country Director.
READ: Remotest region to connect with broadband internet by 2025: Palak
“The project will also balance the affordability and availability of loans in addition to adopting innovative approaches so that lower loan interest rates do not disincentivise banks’ lending to CMSEs,” he added.
ADB to provide Bangladesh $250 million for Covid recovery
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.
ADB to loan $400 million to Bangladesh under agreement signed Monday
Bangladesh and the Asian Development Bank (ADB) on Monday signed an agreement for $400 million in loan for constructing the Dhaka-Sylhet highway to improve mobility, road safety, and regional trade in the proposed north-east economic corridor in the country.The assistance is the first tranche of a $1.78 billion multi tranche financing facility approved by ADB on 27 August 2021 for the SASEC Dhaka–Sylhet Corridor Road Investment Project, 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.The Dhaka–Sylhet corridor, once completed, will support a new trade route that connects Chattogram port with India’s north-eastern states through the three land ports of Akhaura, Sheola, and Tamabil, and onwards to Bhutan and Myanmar.
Also read: Bangladesh and ADB jointly launch country partnership strategyThe project is the main part of Road Corridor No. 5 under the South Asia Sub regional Economic Cooperation (SASEC) program.Transport and trade facilitation are among the priorities of SASEC members, which since 2001, have invested more than $14.3 billion in projects in the region, including 43 transport projects worth $11.4 billion.The SASEC Dhaka–Sylhet Corridor Road Investment Project will be delivered in four tranches.The $400 million first tranche of the facility will help finance the initial works of the major contracts for the widening of about 210 kilometres (km) along the Dhaka–Sylhet corridor from a two-lane to a four-lane road, and add lanes for slow-moving vehicular traffic.
Also read: ADB to provide Bangladesh $250 million for Covid recoveryIt will include 60 km of footpath, 26 footbridges, and 13 overpasses. Its design will have features responsive to the needs of the elderly, women, children, and the differently abled, as well as disaster and climate risks.The government will fund $911 million of the total project cost of $2.69 billion. ADB will also provide a $1 million technical assistance grant from its Technical Assistance Special Fund and an additional $2 million grant from the Japan Fund for Prosperous and Resilient Asia and the Pacific, financed by the Government of Japan, to support capacity building of the Roads and Highways Department on road safety and maintenance, climate change, and gender equality and social inclusion.ADB Country Director Manmohan Parkash said that the Dhaka-Sylhet Road will open up opportunities for the entire north-east region of Bangladesh and act as a strategic corridor for subregional, regional and international trade.“The region is well endowed, and the corridor, which is a part of the Asian Highway network, will connect upcoming economic zones in the Sylhet region, catalyse foreign direct investment, reduce transportation and trading costs, increase competitiveness, create employment, and stimulate economic development,” he said.He also mentioned that it will connect ports and industrial hubs like Chattogram and Matarbari, and integrate the region with the rest of the economy.
Bangladesh and ADB jointly launch country partnership strategy
The Asian Development Bank (ADB) on Monday launched a new country partnership strategy (CPS) jointly with Bangladesh aiming at boosting competitiveness, employment, and private sector development, promoting green growth and climate resilience; and strengthen human capital and social protection.Finance Minister AHM Mustafa Kamal and ADB Country Director for Bangladesh Manmohan Parkash jointly launched the Strategy for 2021-2025 at the Pan Pacific Hotel in Dhaka, according to a press release.The Strategy for 2021–2025 will support rapid socioeconomic recovery from the coronavirus disease (COVID-19) pandemic.
Also read: ADB unveils new partnership strategy for Bangladesh
ADB will further expand its private sector operations in Bangladesh and continue to leverage a high level of co-financing with other development partners.It also envisages enhancing ADB operations to support climate change adaptation and mitigation, and disaster risk management to address the country’s high vulnerability to climate events and other natural disasters, in line with the Paris Agreement.A holistic approach to integrate climate change will be applied to all operations, while expanding programs to directly address climate change impacts through integrated management of water, river, and coastal areas.During the implementation period, ADB will increase its lending operations to $10 billion–$12 billion.The new Country partnership strategy will continue the efforts to reduce poverty in addition to implementing specific programs to reduce inequality, strengthen social protection, promote more equitable rural and regional development, and mobilising investments in low-cost housing and basic services.Special attention will be provided to improve health and education. In the next 5 years, Bangladesh aims to reduce poverty from 20.5 per cent to 15.6 per cent and extreme poverty from 10.5 per cent to 7.4 per cent of its population.The new ADB strategy was prepared in close coordination with the government to support the implementation of its Eighth Five-Year Plan, which aims to address the need for higher resource mobilization, diversification of manufacturing and exports, and sustainable urbanization.Following the onset of the COVID-19 pandemic in early 2020, ADB has adjusted its program priorities to help Bangladesh overcome the COVID-19 pandemic and challenges related to health and social protection, food security, skills development, rural development, water and sanitation, and the finance sector, among others.
Also read: ADB to loan $400 million to Bangladesh under agreement signed MondayADB has supported Bangladesh’s response against the COVID-19 pandemic with a $940 million loan for vaccine procurement under the Asia Pacific Vaccine Access Facility and other initiatives.A $250 million subprogram-1 of the $500 million Sustainable Economic Recovery Program, approved on 24 September 2021, will support Bangladesh’s economic recovery following COVID-19 pandemic.A $250 million loan approved in June 2021 is strengthening social protection and resilience programs. Earlier in 2020, over $651 million in loans and grants were provided to manage the immediate health and socio-economic impacts of the pandemic.Country Director Manmohan Parkash said that the new Strategy reinforces the strong partnership between Bangladesh and ADB. It puts forward a collaborative, futuristic, and transformational framework for development of Bangladesh.“It reflects ADB’s commitment to accelerate the ongoing growth and development of Bangladesh through timely, efficient, and high-quality assistance combining knowledge, finance, and partnerships”.He said that ADB is looking at expanding its private sector operations in Bangladesh.“Our aim is to help Bangladesh realize its aspirations of becoming an upper middle-income country by 2031, and a developed country by 2041 by promoting modern technologies, stimulating inclusive and sustainable growth, and investing in its people and their welfare, especially women, for shared prosperity”, Parkash said.Finance Division Senior Secretary Abdur Rouf Talukder, ADB Alternate Governor and Secretary for Economic Relations Division Fatima Yasmin, Alternate Executive Director representing Bangladesh at ADB Azizul Alam, and ADB Country Director designate Edimon Ginting, among others, attended the event.
Economic recovery: ADB approves $250m loan for Bangladesh
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."
ADB pegs Bangladesh's GDP at 6.8% this fiscal
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.
ADB unveils new partnership strategy for Bangladesh
The Asian Development Bank (ADB) has launched a new country partnership strategy (CPS) for Bangladesh that will help the country realize its aspiration of becoming an upper middle-income country by 2031 and support rapid socioeconomic recovery from coronavirus pandemic.
The CIP aims to boost competitiveness, employment, and private sector development; promote green growth and climate resilience; and strengthen human capital and social protection.
During this period, ADB will increase its lending operations to $10 billion–$12 billion, from $9.6 billion in the past 5 years.
The new ADB strategy was prepared in close coordination with the government to support the implementation of its Eighth Five-Year Plan, which aims to address the need for higher resource mobilization, diversification of manufacturing and exports, and sustainable urbanization.
READ: ADB lowers its economic growth forecast for developing Asia
“Sustained growth and appropriate policy measures have helped Bangladesh achieve good development outcomes. Moving forward, the country’s industry and export base need diversification,” said ADB Director General for South Asia Kenichi Yokoyama.
“Diversification in manufacturing and export items, such as agricultural products, information and communication technology, light engineering, and pharmaceuticals, together with increased competitiveness and access to new markets, will be critical in recovering from the COVID-19 pandemic, sustaining rapid economic growth, and generating substantial employment.”
ADB will further expand its private sector operations in Bangladesh and continue to leverage a high level of cofinancing with other development partners. Improving the banking sector, the ease of doing business, business environment, and investment climate will help accelerate private sector development and promote economic diversification.
The CPS also envisages enhancing ADB operations to support climate change adaptation and mitigation, and disaster risk management to address the country’s high vulnerability to climate events and other natural disasters, in line with the Paris Agreement.
A holistic approach to integrate climate change will be applied to all operations, while expanding programs to directly address climate change impacts through integrated management of water, river, and coastal areas.
READ: Bangladesh to get $ 940 mln ADB loans for procuring Covid vaccine
Efforts to reduce poverty will continue. Specific actions to reduce inequality and poverty include effective implementation of the government’s social protection program, more equitable rural and regional development, investments in low-cost housing and basic services—including quality health and education for the poor. In the next 5 years, Bangladesh aims to reduce poverty from 20.5% to 15.6% and extreme poverty from 10.5% to 7.4% of its population.
ADB has supported Bangladesh’s response against the COVID-19 pandemic with a $940 million loan for vaccine procurement under the Asia Pacific Vaccine Access Facility and other initiatives.
The government has requested $1 billion programmatic budget support for economic resilience and health and social protection, of which $250 million has been provided and the remainder is under preparation for approval in 2021–2023, said the ADB.
ADB okays $1.78 billion for Dhaka-Sylhet trade corridor
The Asian Development Bank (ADB) on Friday approved a $1.78 billion multi-tranche financing facility (MFF) to improve mobility, road safety, and regional trade along the Dhaka-Sylhet trade corridor in Bangladesh.
The SASEC Dhaka-Sylhet Corridor Road Investment Project will be delivered in four tranches, according to the global lender.
The $400 million first tranche of the MFF will help finance the initial works of the major contracts for the widening of about 210 km of National Highway 2 along the Dhaka–Sylhet corridor from two to four lanes. It will include 60 km of footpath, 26 foot bridges, and 13 overpasses.
Its design will have features responsive to the needs of the elderly, women, children, and the differently abled, as well as disaster and climate risks.
READ: ADB lowers its economic growth forecast for developing Asia
The government will fund $911 million of the total project cost of $2.69 billion. Apart from the MFF, ADB will also provide a $1 million technical assistance grant from its Technical Assistance Special Fund and an additional $2 million grant from the Japan Fund for Poverty Reduction, financed by the Government of Japan, to support capacity building of the Roads and Highways Department on road safety and maintenance, climate change, and gender equality and social inclusion.
The Dhaka-Sylhet corridor, once complete, will support a new trade route connecting Chattogram port with India’s northeastern states through the three land ports of Akhaura, Sheola, and Tamabil, and from there to Bhutan and Myanmar.
The corridor is also the centerpiece of the Bangladesh government’s planned Northeast Bangladesh Economic Corridor, which aims to promote key industries in the area, such as energy generation and production of construction materials, and to better integrate them with the rest of the economy in the country.
ADB lowers its economic growth forecast for developing Asia
The Asian Development Bank (ADB) has marginally lowered its economic growth forecast for developing Asia this year amid the second wave of the pandemic.
It projects a 7.2 percent economic growth for developing Asia this year compared with its 7.3 percent forecast in April, as renewed Covid outbreaks tend to slow the recovery in some economies of the region.
Read: ADB praises Hasina's leadership in Covid fight
However, the growth outlook for 2022 is upgraded to 5.4 percent from 5.3 percent, according to a release from the Bank.
Excluding the newly industrialised economies of Hong Kong, the Republic of Korea, Singapore and Taipei,developing Asia’s updated growth outlook is 7.5 percent for 2021 and 5.7 percent for 2022, compared with the earlier projections of 7.7 percent and 5.6 percent, respectively.
The supplement to ADB’s flagship economic publication, Asian Development Outlook (ADO) 2021, provides updated projections for the region’s economies and inflation levels amid the pandemic.
“Asia and the Pacific’s recovery from the pandemic continues, although the path remains precarious amid renewed outbreaks, new virus variants, and an uneven vaccine rollout,” said ADB Chief Economist Yasuyuki Sawada.
“On top of containment and vaccination measures, phased and strategic rejuvenation of economic activities -- for instance, trade, manufacturing, and tourism--- will be key to ensure that the recovery is green, inclusive, and resilient.”
The Covid pandemic remains the biggest risk to the outlook, as outbreaks continue in many economies.
Read: ADB triples COVID-19 response package to $20bn
Daily confirmed cases in the region peaked at about 434,000 in mid-May.
They narrowed to about 109,000 at the end of June, concentrated mainly in South Asia, Southeast Asia, and the Pacific. Meanwhile, the vaccine rollout in the region is gaining pace, with 41.6 doses administered per 100 people by the end of June -- above the global average of 39.2, but below rates of 97.6 in the United States and 81.8 in the European Union.
East Asia’s growth outlook for 2021 is raised to 7.5 percent, from 7.4 percent in April, amid a stronger-than-expected recovery by the newly industrialised economies of Hong Kong, the Republic of Korea and Taipei.
The subregional growth forecast for 2022 is retained at 5.1 percent. The growth outlook for China is likewise maintained at 8.1 percent this year and 5.5 percent in 2022, amid steady performances by industry, exports, and services.
This year’s growth outlook for Central Asia has been raised to 3.6 percent, from 3.4 percent, in the April forecast.
This is mainly due to an improved outlook for Armenia, Georgia, and Kazakhstan -- the subregion’s largest economy. Central Asia’s outlook for 2022 remains at 4.0 percent.
Projections for South Asia, Southeast Asia, and the Pacific for 2021 are lowered as renewed outbreaks are met with containment measures and restrictions, hampering economic activity.
South Asia’s growth outlook for fiscal year 2021 is lowered to 8.9 percent from 9.5 percent. The forecast for India is downgraded by 1.0 percentage points to 10.0 percent.
Southeast Asia’s 2021 outlook is revised to 4.0 percent from 4.4 percent, while the projection for Pacific economies is lowered to 0.3 percent from 1.4 percent. However, the 2022 growth forecasts for these subregions are upgraded to 7.0 percent, 5.2 percent and 4.0 percent, respectively.
The inflation forecast for Asia and the Pacific this year is raised to 2.4 percent, from 2.3% in April, reflecting rising oil and commodity prices. The projection for 2022 remains at 2.7 percent.
ADB approves $250 million loan to Dhaka to finance reforms
The Asian Development Bank (ADB) on Friday approved a $250 million policy-based loan to Bangladesh to help finance reforms.
It is aimed at improving the inclusiveness and responsiveness of the country’s social development and resilience program, according to a release from ADB.
Bangladesh has made remarkable progress in reducing poverty over the past 2 decades. The poverty incidence declined from 48.9% in 2000 to 20.5% in 2019.
However, while many people were lifted from extreme poverty, a considerable number continue to live at a subsistence level.
Also read: Climate Change to get priority in Bangladesh alongside Covid support:ADB
The coronavirus disease (COVID-19) pandemic has significantly affected the socioeconomic situation of Bangladesh with the decline of the country’s gross domestic product to an estimated 5.2 % in fiscal year (FY) 2020 from 8.2% in FY 2019.
“Enhancing social protection support is critical to cushioning the effects of the pandemic,” said ADB Senior Social Sector Specialist for South Asia Hiroko Uchimura-Shiroishi.
He said that the ADB supports the government’s intention to leverage the COVID-19 pandemic as an opportunity to strengthen its social protection programs as an essential means of building the resilience of the poor and supporting an inclusive recovery.
Also read: Covid fallout: ADB lowers Bangladesh's FY21 growth forecast
According to the release, the Strengthening Social Resilience Program will include institutional and policy reforms to address cross-sector issues of social development in Bangladesh.
These include improving the coverage and efficiency of the social protection system through improving the administrative efficiency of social protection management.
The program will expand its outreach to vulnerable women by increasing the coverage of both the old age allowance for women over 62 and the allowance for widowed, deserted, and destitute women in 150 sub-district units or upazilas.
Also read: Post-pandemic recovery in Bangladesh: ADB to accelerate project implementation
Other reforms include promoting the use of mobile financial services and simplifying identification and documentation requirements for opening a bank account and broadening the scope of social protection from mere poverty relief to life cycle social and health responses, including social insurance system.
ADB will also provide a technical assistance grant to support program implementation, policy analyses, and capacity development for social development-related ministries. The technical assistance is estimated to cost $1.2 million which will be financed on a grant basis by the Japan Fund for Poverty Reduction.