The Asian Development Bank (ADB) on Wednesday (11 December) announced a $600 million policy-based loan (PBL) to Bangladesh, designed to support a comprehensive package of structural reforms aimed at enhancing domestic resource mobilisation, optimising public investment projects, fostering private sector development, reforming state-owned enterprises, and promoting transparency and good governance.
“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,” stated ADB Regional Lead Economist Aminur Rahman.
He further highlighted that the programme had been developed in close collaboration with the International Monetary Fund, World Bank, and other development partners.
Bangladesh faces significant challenges in revenue mobilisation, with its tax-to-gross domestic product ratio standing at a mere 7.4%, the lowest globally.
PBL is intended to introduce critical policy measures aimed at increasing domestic resource mobilisation while bolstering transparency and accountability.
Key initiatives include digitalisation and green policies, the rationalisation of tax incentives and exemptions, and support mechanisms to enhance taxpayer compliance and morale.
Improving the transparency and efficiency of public investment projects through digitalisation is another primary focus of the programme.
To stimulate private sector development and attract foreign direct investment, the ADB-backed reforms aim to streamline regulatory frameworks and create a level playing field.
Over 130 services have been integrated into an online platform to simplify business establishment and operations.
These measures are complemented by enhanced governance and performance monitoring of state-owned enterprises and the streamlining of foreign direct investment approval processes.
The programme also seeks to enact policy and institutional reforms for a "whole-of-government" approach to logistics sector reform, with the objective of reducing trade costs and fostering export diversification.
ADB, established in 1966, remains committed to creating a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while continuing its mission to eradicate extreme poverty. It is owned by 69 members, 49 of which are from the region.
