STAR BUSINESS REPORT

The World Bank (WB) yesterday approved $500 million in financing to enhance trust in Bangladesh’s public institutions through increased accountability and transparency.

This credit support, under the Strengthening Governance and Institutional Resilience Development Policy, will also improve corporate governance and stability in the financial sector, said the multilateral lender.

“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 World Bank’s Interim Country Director for Bangladesh Gayle Martin.

“Through another project that was approved last week, we are supporting the government to implement these reforms.”

The WB had approved $640 million for Bangladesh last week.

The Washington-based lender said Bangladesh has one of the lowest revenue-to-GDP ratios among middle-income countries, which significantly limits the government’s ability to deliver quality services.

This new finance supports reforms to boost domestic revenue mobilisation, making tax administration and policy-making more transparent and efficient, aligning with international best practices.

It will also promote a more strategic and transparent approach to managing tax exemptions, requiring parliamentary approval for all exemptions, a significant departure from current ad hoc practices.

The WB said the financing will also strengthen corporate governance and risk management by aligning financial reporting with international standards and increasing transparency.

It will enhance financial sector stability by providing the Bangladesh Bank with comprehensive resolution powers to address banking sector vulnerabilities.

A third set of reforms will improve public sector transparency, accountability, and efficiency.