The International Monetary Fund (IMF) is likely to extend loan to Bangladesh under ESAF (Enhanced Structural Adjustment Facility) for increasing economic growth and reducing thepoverty. reports UNB.

The prospects of such loan were discussed with the IMF delegation during its fortnight visit to Dhaka that ended yesterday.

We are very eager to support Bangladesh, support its policies aimed at increasing growth and reducing poverty. Such loan could be provided under ESAF." Chanpen Puckahtikom. an official of IMF who led the IMF delegation, said.

During its fortnight s stay, the IMF delegation met with ministers, officials, representatives of Bangladesh Bank and NGOs. local business and banking communities, trade unions

and foreign donors

The amount of assistance will be decided by the Fund's management.' Chanpen told a correspondent saying she will submit a report on her return to New York.

Chanpen. Assistant Director of IMF's Asia-Pacific Department. told a press conference that discussions with Bangladesh on ESAF loan will continue. Ronald Hicks, IMF Resident Representative in Dhaka, was also present.

IMF did not extend ESAF to Bangladesh after the earlier facility ended more than two years ago asking the government to expedite privatisation, reduced government expenditure and other structural re-

forms.

"We have recommended that the authorities step up efforts to strengthen the banking system, to divest or close SOEs (state-owned enterprises) to intensify fiscal reform and to liberalise international trade further," added the official of IMF which operates under the umbrella of the World Bank.

The macro-economic situation is still fragile." Chanpen

said about the economic situation of Bangladesh. "We have advised the government to carefully monitor budgetary developments and take cautious monetary policy."

She added: "Inflation has to be carefully and vigorously monitored. Financial polices need to be prudent. Vigorous efforts will be required to strengthen macro-economic performance and step up the momentum on structural reforms to attain a broad-based economic growth ... Govern-

ment should address issues to strengthened the banking system for a larger saving and investment-

Describing as 'encouraging' the developments during 1997-98 fiscal year, she said the grout:. 'vas good. The budget was close to the target. The fiscal policy was prudent. The export performance was strong. Bank* financing to the budget was restrained. Inflation was within the international standard.

The IMF officials said they suggested the government for vigorous efforts to strengthen macro-economic performance. It needs to build up international reserves, bring down inflation and leave room for expansion of the private sector.

Chanpen said they have noted problems widespread loan defaults and huge losses of state owned enterprises which could otherwise be devoted to development and poverty reduction.

She would not say if the IMF had suggested Bangladesh to export gas.

The IMF official told a correspondent that she has no ready information on whether external assistance have succeeded in reducing poverty in Bangladesh.

Chanpen also pleaded ignorance when a correspondent drew her attention to a recent report that of 89 developing countries who have receivea IMF help since 1965. more than half are no better off than they were before and 32 are actually worse off.