Staff Correspondent:
Another dollop of Asian Development Bank (ADB) loan worth US$400 million may be forthcoming as budget support to Bangladesh this fiscal year, at a time when the country faces forex crunch. Government’s Finance Division (FD) and Economic Relations Division (ERF) are working with the Manila-based lender for the confirmation of the budget support for this fiscal, officials said Saturday.The ADB has assured Bangladesh of support in tackling LDC-graduation fallout on the economy and improving the business climate, especially the position in the global logistics index, said officials at the two divisions.The proposed $400-million credit from the ADB will help the country in cushioning the possible shocks in some industrial and services sectors during and after the graduation from the least-developed country (LDC) status in 2026, they said.”We are working to get the budget support confirmed for us. If we get it within this fiscal year, the government will start preparation to manage the possible shocks in the post-LDC-graduation era,” says a senior ERD official.Besides, he adds, since Bangladesh’s rank in the world in logistics index is not satisfactory, the ADB funds will help in improving Bangladesh’s capacity in this particular sector.Bangladesh is on track to get out of the world’s poor-country club into a developing nation by 2026, after which it won’t be eligible for privileges like preferential market access and concessional credits from development partners.So, after the graduation, the country’s foreign trade, aid and other international dealings will be costlier as it will have to rub shoulders with freely with peers.Another ERD official says the ADB has already provided a $1.0 million worth of Technical Assistance to Bangladesh under the ‘Knowledge Support for LDC Graduation and Improving Investment Climate’ project for capacity building of the government to pay its way on journey ahead.The proposed $400-million policy-based loan will assist Bangladesh’s different sectors in tackling the possible shocks during the post-LDC period and in recovery from any unwanted situation.The borrowed money is also meant to help Bangladesh to improve its business climate, including the upgradation of the position in global logistics index.Analysts say the bad performance in respect of logistics stands as one of obstacles to investment flow into Bangladesh from foreign investors.In 2023, Bangladesh secured 88th position in the World Bank’s Logistics Performance Index (LPI) among 139 countries.The ERD official says, “We have already sat with the ADB mission for the proposed $400 -million budget support aiming to get confirmation by June this year.”ADB budget And they are hopeful about securing ADB commitment for the support within this fiscal.Meanwhile, the ADB in June 2023 approved another budget support worth $400 million to Bangladesh to advance reforms in domestic resource mobilization, improve efficiency and productivity of public spending, and help small businesses, especially women-led businesses, to access low-cost innovative bank financing

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