Now Jica, IsDB come forward with budget support
In an uncharacteristic move, the Japan International Cooperation Agency (Jica) and the Islamic Development Bank (IsDB) have decided to provide budget support to Bangladesh to meet up its growing expenditure needs when confronted with the coronavirus pandemic, which includes firmly taken hold in the united states.
Neither the Jica nor the IsDB gives budget support, however the two development partners experienced to come forward to pitch in with $1 billion and $182 million respectively.
JAPAN donor agency normally provides project aid to Bangladesh and today would call the planned support as budget aid, which came after Dhaka sought help.
Officials of the Economics Relations Division (ERD) and the Jica would now sort out how the support will be extended.
The budget aid would not, however, affect the ongoing financing to Jica-supported projects in Bangladesh, said the official of the ERD.
The IsDB would provide $60 million in new funding and the others $122 million will be redirected from slow-moving projects the Jeddah-based multilateral development lender is bankrolling in the united states.
On April 25, Kamal approached the IsDB seeking assistance in areas of food security, health and agriculture sector development and mechanisation while talking with Bandar MH Hajjar, president of the multilateral development lender.
The IsDB has announced a $2.3 billion package to help its 57 member countries fight the coronavirus pandemic.
Bangladesh is seeking external resources to meet its rising expenses in the face of the growing ferocity of the rogue virus, which includes prompted the federal government to enforce stay-at-home order since March 26 and in the process putting the economy on an induced coma.
The pandemic stands to wipe off the gains made in poverty decrease in the past decade, in line with the World Bank; and as per estimates, a lot more than 1.5 million of the poor and the vulnerable have lost their livelihoods for the shutdown.
This means the necessity to spend substantially on social back-up programmes and job creation has become imperative. At the same time, its purse strings have already been tightened for the near-collapse of economical activities for more than six weeks now.
Subsequently, the united states has sought $1.25 billion from the Asian Development Bank and $500 million from the WB and the Asian Infrastructure Investment Bank each to ballast next fiscal year's budget, which will be shouldering the responsibility of the Tk 95,619 crore stimulus packages announced.
For fiscal 2020-21, the International Monetary Fund and the World Bank projected fiscal deficit of 6.5 % and 9.8 per cent of GDP respectively.
Given that the development partners are rallying to supply budget support, the federal government is likely to unveil a bigger cover another fiscal year than in the beginning thought.
The budget size could be around Tk 570,000 crore, up from Tk 550,000 crore.
