Home ›› 23 Jan 2023 ›› Front
The World Bank (WB) will continue to provide Bangladesh with financial support to enhance export performance and develop the human capital required to double the per-capita income and to tackle new challenges such as digitalisation and climate change, says a visiting top official of the international lender.
The country needs to put in more effort in its next phase of development particularly to double the per-capita income, WB Managing Director for Operations (MDO) Axel van Trotsenburg said on Sunday.
Trotsenburg made the remarks at an event at Bangabandhu International Conference Center in Dhaka. The event, titled “Celebrating a Journey Together: Bangladesh and The World Bank,” was organised by the Finance Ministry and WB to mark 50 years of partnership.
He praised Bangladesh’s progress and said, “We can learn from the country and the country can share its experiences with others.”
However, he said, a vibrant private sector and export diversification will be central to staying on course and a strong growth path. For this, rationalising the tariff system to reduce the nominal protection rate, removing non-tariff barriers, and liberalising trade in services will be critically important.
“And, you have already shown potential to do this. In 1970, Bangladesh had $500 million in export revenues. This has grown, with export revenue for November 2022 alone reaching $5 billion!” Trotsenburg praised.
Addressing the event, Economic Relations Division Secretary Sharifa Khan said that Bangladesh will be an upper-middle-income country by 2030. “That is why we need more investment in energy, infrastructure, skill development, mechanisation, agriculture and urban development.”
Global interest rates are increasing and that have pushed Bangladesh’s borrowing costs up as well, she said. “Our development partner will obviously observe that the interest rate is almost 4 per cent.” Sharifa urged the development partners to come up with solutions. “Amid this crisis, the budget support will play an important role in tackling the current challenges.”
Regarding the budgetary and Rohingya support, Trotsenburg said donor countries are facing problems themselves due to the ongoing global economic crisis which makes it very difficult to meet the demand for assistance from developing countries including Bangladesh.
“The number of refugees is increasing all over the world. The Russia-Ukraine war increased this number by another 8 million. As a result, we spent $16.5 billion in this sector last year, which was only $5 billion five years ago. But we will try our best for the Rohingyas,” he added.
About the 4 per cent interest rate, the WB MDO clarified that this rate is the market rate and it’s the same for all borrowers, not just Bangladesh. However, as a lower-middle-income county, Bangladesh is also taking concessional loan support from International Development Association, which has a very low-interest rate and a 10-year grace period.
Meanwhile, he said, WB will give priority to improving human capital. As part of this, assistance in any form of education will continue and increase. In addition, emphasis will be placed on health services, especially children’s malnutrition and social protection.
Speaking at the event, Finance Minister AHM Mustafa Kamal praised WB for its continued support towards Bangladesh’s development. The country’s growth has increased by 74 times since 1972, and the global lender played a major role in it.
“After independence, the country’s GDP growth was only $6.3 billion, which has now increased to $465 billion. Bangladesh is currently the 35th largest economy and per capita income has increased to $2,824,” he said.
Ahmad Kaikaus, the prime minister’s former principal secretary, said the government aims to achieve the Sustainable Development Goals by 2030 and needs to invest $928 billion. But it’s inadequate for Bangladesh.
Kaikaus, who was appointed the World Bank Group’s alternate executive director representing Bangladesh, Bhutan, India and Sri Lanka last month, said the financial sector needs to be reformed so that a major portion of the required investment can be collected from the capital market because the potential is there.
WB Regional Vice President for South Asia Martin Raiser said that Bangladesh has made more development progress. “We are committed to supporting the country through uncertainties and challenges created by the Covid-19 pandemic, the Russian invasion of Ukraine, and increasing impacts of climate change as the country moves forward to achieve its development goals.”
