World Bank sanctions $1.34 bln loan to Bangladesh

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Dhaka, Oct 20 (UNI) The World Bank has sanctioned the highest-ever assistance of 1.34 billion dollars to Bangladesh for the current fiscal year despite the ongoing global financial turmoil.

Of the total assistance, 959 million dollars is for the second half of this year, while the remaning amount is for the January-June period of next year.

''This is the largest ever World Bank commitment...this is due to their satisfaction over Bangladesh for various reform measures,'' Bangladesh caretaker government's Finance and Planning Advisor Mirza Azizul Islam, who attended the IMF Annual Meetings in Washington last week, told reporters here He said the food crisis response project of 130 million dollars would also be released by this month.

Replying to a question, the Advisor said the World Bank executives did not explain how they will mobilise the additional fund for Bangladesh in view of the current global financial crisis when the donor countries were facing liquidity crunch.

''Our funds come mainly from the IDA (International Development Association) replenishment, which is coming from within the World Bank resources,'' he said.

''What might affect our fund flow is from the commercial lending from the banks while only the future on how the financial crisis would prolong can tell the prospects for bilateral aid,'' he continued.

He expressed hope that the recession is unlikely to prolong due to considerable coordination among the donor countries, while the banking problem of liquidity was gradually recovering in the worst-hit countries very recently.

On Bangladesh being elected to the trust fund committees, Dr Aziz said the World Bank was setting up a Climate Change Trust Fund and formed two committees-- Trust Fund Committee and a sub-committee -- to make the fund operational.

''We are happy that Bangladesh has been elected to the Trust Fund Committee and the sub-committee,'' he said expressing satisfaction that Bangladesh is the only country elected to both the committees.

He hoped that Bangladesh would probably be the first country to get the first project under the trust fund.


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