ADB PROVIDES $600 MILLION TO STRENGTHEN ECONOMIC MANAGEMENT AND GOVERNANCE IN BANGLADESH

The Asian Development Bank (ADB) and the Government of Bangladesh today signed a $600 million policy-based loan (PBL) agreement to promote structural reforms supporting domestic resources mobilization, efficiency of public investment projects, developing private sector, reforming state-owned enterprises, and boosting transparency and good governance.

Md. Shahriar Kader Siddiky, Secretary, Economic Relations Division (ERD), and Jiangbo Ning, Deputy Country Director, ADB, signed the loan agreement on behalf of Bangladesh and ADB, respectively, at a ceremony at ERD in Dhaka today (Dec.18,2024).

“The $600 million assistance under the Strengthening Economic Management and Governance Program (Subprogram 1) supports the government in addressing structural weaknesses in mobilizing domestic resources, enabling investment climate, facilitating trade and logistics, and promoting transparency and good governance,” said Deputy Country Director Jiangbo Ning. “The reforms under the program aim to increase income tax revenue by 25%, and value-added tax (VAT) by 30%, while reducing development project cost overruns by 30%, and cutting average time overruns for completed projects to 18 months, by March 2027” Mr. Jiangbo Ning added.

The Strengthening Economic Management and Governance Program aims to sequentially implement complex reforms focusing on strengthening fiscal management, improving state-owned enterprises’ (SOE) governance and investment climate, and boosting trade policy and logistics. The overall program also includes subprogram 2, scheduled for 2026, with another $600 million. The subprogram 1 supports the government in initiating tax expenditure rationalization, tax administration automation and digitalization, data transparency, public investment management (PIM) system improvement, SOE governance and fiscal risk monitoring strengthening, regulatory environment streamlining, and trade facilitation. The subprogram 2 envisages to further deepen the reforms initiated under subprogram 1. In addition, the PBL aims to facilitate policy and institutional reforms to promote a “whole of government” logistics sector reform to reduce the cost of trade and promote export diversification.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 69 members—49 from the region.