ADB to provide Bangladesh $12b by 2025 to attain middle-income status

The Asian Development Bank (ADB) will provide Bangladesh $10-12 billion by 2025 under Country Partnership Strategy (CPS) to boost competitiveness, employment, and private sector development, promoting green growth climate resilience, improving human capital and social protection.

The CPS for 2021–2025 will help Bangladesh realise its aspiration of becoming an upper middle-income country by 2031 through increased public and private investments in the next five years. It will also support rapid socioeconomic recovery from the pandemic.

During this period, ADB will increase its lending operations to $10 billion–$12 billion, from $9.6 billion in the last five years, said ADB in a statement on Tuesday.

As a part of cooperation, the lender will also support rapid socioeconomic recovery from the Covid-19 pandemic.

In the last five years, the regional lender provided $9.6 billion funds to Bangladesh.  

“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.”

On top of that, ADB will further expand its private sector operations in Bangladesh and continue to leverage a high level of co-financing 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,” said the lender.

According to the ADB release, 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.  

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, reads the ADB release.

In the next five years, Bangladesh aims to reduce poverty from 20.5 per cent to 15.6  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 mobilisation, diversification of manufacturing and exports, and sustainable urbanisation, added the ADB release.