The World Bank has approved $500 million in financing to help build trust in Bangladesh’s public institutions through greater accountability and transparency, while also enhancing corporate governance and ensuring stability in the financial sector.
The financing, under the "Strengthening Governance and Institutional Resilience Development Policy Credit," is intended to support reforms in both the public and financial sectors, seen as essential for Bangladesh’s sustained economic growth.
These reforms will also lay the groundwork for more effective service delivery to vulnerable communities.
Gayle Martin, the World Bank’s Interim Country Director for Bangladesh, said the reforms aim to strengthen institutions so they are more transparent and answerable to the public.
She said that this initiative would contribute to building a stronger, more inclusive economy.
Martin also said that the World Bank is supporting the government's efforts through another project approved last week, which is aligned with these broader reform goals.
The World Bank pointed out that Bangladesh currently has one of the lowest revenue-to-GDP ratios among middle-income countries. This situation hampers the government’s capacity to provide essential public services.
The approved program seeks to improve domestic revenue collection by enhancing transparency and efficiency in tax policy and administration. These measures aim to bring the country in line with international best practices.
One of the key reforms includes ending the current ad hoc method of granting tax exemptions. Going forward, all such exemptions will require parliamentary approval, moving towards a more strategic and transparent system.
The initiative also includes steps to improve corporate governance and financial risk management by aligning financial reporting standards with international norms. The World Bank noted that transparency in these areas is crucial for long-term financial stability.
Bangladesh Bank will be given broader authority to take action against weaknesses in the banking sector. This includes expanded powers to resolve financial sector vulnerabilities and implement measures to reduce systemic risks.
The program will also promote greater transparency and accountability throughout the public sector. By 2027, all government project appraisal documents must be publicly available. In addition, public procurement will increasingly rely on an electronic government procurement system, known as e-GP. This system will require disclosure of beneficial ownership and the removal of price caps, a move expected to foster competition and reduce corruption risks.
To further ensure financial accountability, the auditing capacity of the Office of the Comptroller and Auditor General will be strengthened. The World Bank emphasized that such improvements are critical to enhancing the credibility and effectiveness of public spending.
Additionally, the Bangladesh Bureau of Statistics (BBS) will be made more independent. This will improve the quality and reliability of official data, leading to better decision-making and service delivery.
The reform package will also modernize the country’s approach to social protection. Cash transfer programs targeting the poor and vulnerable will be made more effective through the introduction of a dynamic social registry. The new system will help ensure that government support reaches the right people, particularly during economic shocks or natural disasters.
Dhruv Sharma, Senior Economist at the World Bank and Task Team Leader for the project, said the financing aligns with the people’s demand for transparency and accountability. He added that improved data systems and better targeting of social protection would ensure that public funds reach those most in need.
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