ADB okays $600m budget support to Bangladesh

The Asian Development Bank, ADB, will provide a $600 million policy-based loan (PBL) to Bangladesh, with a package of structural reforms supporting mobilization of domestic resources, efficiency of public investment projects, developing private sector, reforming state-owned enterprises, and promoting transparency and good governance, a press release said on Wednesday, December 11

“ADB’s PBL promptly responds to Bangladesh’s immediate development financing needs following the political transition. The reforms target improvements in economic management and governance as well as economic diversification and competitiveness,” said ADB Regional Lead Economist Aminur Rahman. 

“ADB's programme was developed in close collaboration with the International Monetary Fund, World Bank, and other development partners.”

Bangladesh has been struggling with revenue mobilization, as it possesses the lowest tax-to-gross domestic product ratio in the world, at only 7.4%. This PBL will help Bangladesh introduce key policy actions with the aim of increasing domestic resource mobilization, while improving transparency and accountability, the press release said.

The programme includes digitalization and green initiatives, rationalization of tax incentives and exemptions, and measures to assist taxpayers to boost tax morale.