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Kamal marshalling development partners to help with COVID-19 wreckage
Rejaul Karim Byron and Md Fazlur Rahman
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Bangladesh has turned to multilateral lenders in earnest to pull the country out of the wreckage of COVID-19, which has left the country’s tremendous growth momentum of recent years coming crashing down.
Finance Minister AHM Mustafa Kamal is leading the country’s efforts to mobilise the funds. He got down to work in the first week of April, writing to all the multilateral development and bilateral partners seeking whatever support they can extend.
On Thursday, he held a meeting with Hartwig Schafer, vice president for South Asia of the World Bank, over video-conferencing, on the sidelines of the virtual World Bank-International Monetary Fund (IMF) Spring Meetings. The three-day meeting ended on Saturday.
Kamal sought budget support from the Washington-based multilateral lender.
The WB has already allocated $100 million to Bangladesh for health services and is set to provide another $250 million by June this year.
The government had been in talks to get the $250 million by September. Now, it has requested to make the funds available by June.
Bangladesh has also requested the WB to give its consent to three projects involving a total of $1.07 billion.
The WB has asked Bangladesh to send the list of the projects by the first week of May following approval from the Executive Committee of the National Economic Council (Ecnec) if they are to be placed in the board meeting of the lender in June.
As the Ecnec meeting is not taking place owing to the lockdown, the finance ministry would take the approval from the prime minister about the projects and send them to the WB.
The government has sought $500 million from the WB’s global fund dedicated to fighting the impact of coronavirus.
“We have sought $1 billion in additional budget support from the WB for the next fiscal year as we will need money to help the economy recover,” Kamal told The Daily Star yesterday.
The government will focus on implementing the annual development programme to create jobs as well as implement the stimulus packages, he said.
Among the development partners, the Asian Development Bank will release $600 million immediately. Kamal negotiated for $100 million a few days ago and for $500 million yesterday.
The finance minister is due to hold a video-conferencing with ADB President Masatsugu Asakawa today.
The government would look for avenues for whatever support it can get from the $6.5 billion coronavirus fund of the ADB.
The IMF has made available about $50 billion through its rapid-disbursing emergency financing facilities for low-income and emerging market countries that could potentially seek support. Of the IMF fund, $10 billion is available at zero interest for the poorest members.
Bangladesh has sought $700 million in the first tranche against the country’s quota.
The IMF and the finance minister would hold the negotiation this week and the proposal may be placed at the board in May, said a finance ministry official.
The crisis lender has assured Bangladesh of another $700 million in the next fiscal year.
Kamal is seeking $500 million each from the Islamic Development Bank and the Asian Infrastructure Development Bank and would hold talks with the presidents of the development partners over video-conferencing between April 25 and April 30.
Bangladesh is not only looking for monetary support from the development partners. For example, it is seeking any kinds of supports, including those for the health sector, from the bilateral partners, which have also been affected by the COVID-19.
Bangladesh has turned to the development partners as the country has been hit hard by the coronavirus impacts.
The virus has forced the government to go on lockdown since March 26, shutting factories and industries, suspending transport movement and enforcing social distancing.
Owing to coronavirus, the GDP growth would be 2 per cent growth this year, the lowest since 1988, according to the IMF.