Bangladesh to get World Bank Support for Food crisis

DHAKA: The World Bank will provide Bangladesh with 130 mn US dollar under its food crisis development support credit to assist its on-going policies and pro-poor programmes to cope with high food prices.

Finance division secretary Dr Mohammad Tareque and Lead Economist of the World Bank Dhaka office, Vinaya Swaroop led the government and the IDA delegations respectively in the final negotiations, held at a city hotel Sunday.

Following the international food price hike that affected the whole world this year, the World Bank has created a 1.2 bn US dollar Global Food Response Programme (GFRP), a press release said.

In response to the Bangladesh Government's request, the World Bank would provide the emergency credit under this fast-track approval facility, it said.

The Government has taken commendable steps including Open Market Sales for rice and 100- Day Employment Guarantee programme to help the poor. The proposed assistance will help the government by generating fiscal space to absorb the pressure from the expansion of safety nets programmes, it added.

In the current budget, the government has allocated over 600 mn US dollar in additional funds for these food-based safety net programmes including 300 mn US dollar in the new 100-Day Employment Guarantee Scheme.

The proposed operation would create fiscal space in the government budget, to partially finance the projected fiscal deficit of 5 per cent of GDP, the release said.

The credit is scheduled to be discussed for approval on October 10, 2008.

The credit from the World Bank has 40 years to maturity, including a 10-year grace period and carries a service charge of 0.75 per cent, the release added.