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WB won t continue support unless use of aid improves

WB MD finds PRSP lacking focus on political governance improvement

Staff Correspondent
The Poverty Reduction Strategy Paper (PRSP) forthe next three years lacks a proper focus on improving political and overall governance, without which the government's aid utilisation capacity will remain retarded, visiting World Bank (WB) Managing Director Sheng Man J hang pointed ou t yesterday.
"Bad.political governance is an obstacle to rapid economic growth here," Jhang, the second man in the WB hierarchy, told newsmen after a meeting with Finance and Planning Minister M Saifur Rahman at the planningministry. ,
The issue of governance should be addressed with more importance
in the growth strategy, Jhang observed.
He said the WB will give Bangladesh S220 million in aid -5200 million for flood rehabilitation programmes after readjusting some of its projects here and the rest as a fresh loan. The proposal in this regard will be tabled at the WB board meetingon January 28.
But the WB high official cautioned Saifur that if the country's aid utilisation capacity is not improved, the bank will not continue its support.
LGRD and Co-operatives Minister Abdul Mannan Bhuiyan, Education Minister Dr Osman Farruk, WB Country Director Christine I Wallich and high officials
of the finance and planning ministries also attended the meeting.
"The World Bank managing director told us that if we fall to improve our implementation capacity of development-programmes it will be difficult for him to convince the board of the bankto give us more aid," Saifur told the press after the talks.
"Jhang also told me that the World Bank board members will charge him in case of a Jroor programme implementation performance by Bangladesh. They may ask - the country cannot spend money, so why should it receive more aid?" Saifur ' sa 1 d quoting the WB MD, Who had arrived here Saturday night on a two-day official visit.
The finance minister said, "They told us to utilise the aid properly. But it does not imply a believe that we will waste the money. ’’
"The S200 million will be readjusted from different aid projects of the bank here which are very much difficult to implement even in the next 10 years. We are bound to pay commitment charge against the projects, as we are not able to implement in time," Saifur said, noting, "In this context, it is a good arrangement for Bangladesh, as we will not have to pay the commitment charges."
In response to Jhang's criticism of the PRSR Saifur told him he would seek recommendations of lawmakers and politicians outside parliament after the Eid-ul-Azha on how to better the political governance and Include them in the strategy paper. He also sought recommendations of the WB on the issue.
Talking to the media, Jhang said he has discussed the WB's cooperation and relationship with the Bangladesh government. "We hope Bangladesh government will continue their consultations with the stakeholders concerned before finalisingthePRSP."
On the proposed immunity to the WB, Jhang said, "It is nothing new in the other World Bank member states, we have similar laws there. But in Bangladesh there is alot of confusion about the law."
Wallich said the government should take steps to reform the police administration, improve law and order, and restructure the power sector, which are the major concerns fordevelopmenthere.