The World Bank has approved $500 million in financing to enhance trust in Bangladesh’s public institutions through increased accountability and transparency; and to improve corporate governance and stability in the financial sector.
The ‘Strengthening Governance and Institutional Resilience Development Policy Credit’ supports public and financial sector reforms, which are key for sustained economic growth, says a World Bank media release.
The reforms will also lay the foundations for improved services for vulnerable households, it read.
“Improvements in how public finances are managed are important for Bangladesh’s economy to grow sustainably. The government is taking ambitious steps to make its institutions more open and answerable, so they can serve the people better,” said Gayle Martin, World Bank Interim Country Director for Bangladesh.
“This financing will support the government’s efforts to strengthen its policies and regulatory framework to build a stronger, more inclusive economy that benefits everyone. Through another project that was approved last week, we are supporting the government to implement these reforms”, he added.
The WB release said Bangladesh currently has one of the lowest revenue-to-GDP ratios among middle-income countries, limiting the government’s ability to deliver quality services to its people.
This program supports reforms aimed at improving domestic revenue mobilization. The reforms would make tax administration and policy-making more transparent and efficient, aligning with international best practices.
Further, it will support reforms to move to a more strategic, systematic, and transparent approach to managing tax exemptions that will require Parliamentary approval for all exemptions, which would be a significant step away from current ad hoc practices, read the release.
It said the financing will also strengthen corporate governance and risk management frameworks by aligning financial reporting with international standards and increasing transparency.
It will help improve financial sector stability by providing the Bangladesh Bank with a complete range of resolution powers to address vulnerabilities in the banking sector.
A third strand of reforms will improve transparency, accountability and efficiency across the public sector. By 2027, all government project appraisal documents will be required to be made public, the WB release added.
The public procurement system will be required to use electronic government procurement (e-GP), disclose beneficial ownership, and remove price caps to foster competition and reduce corruption risks.
To further improve financial accountability, the auditing capacity of the Office of the Comptroller and Auditor General will be strengthened.
The independence of the Bangladesh Bureau of Statistics will also improve data transparency, leading to better service delivery for citizens.
Finally, cash transfer programmes for the poor and vulnerable will be made more effective with the operationalisation of a dynamic social registry.
With this financing, The World Bank’s total new commitments to Bangladesh in FY 25 now stands at $3.07 billion.
The World Bank has committed over $46 billion in grants, interest-free, and concessional credits to the country since its Independence.