The New Nation - Internet Edition

UNB, Dhaka

Finance Adviser Dr Mirza Azizul Islam said Sunday that the inflow of World Bank assistance beyond 2008-09 has become uncertain as the country is not prepared with project proposals for seeking fund support.

"The World Bank assured that there'll be no problem in financing the approved projects and those awaiting approval this fiscal year," he told reporters after a meeting with a World Bank team at the Planning Ministry.

"What is going to happen after this fiscal year is an uncertainty," the Finance Adviser said, adding that it could be taken care of later.

The 4-member World Bank team led by John Roome, the Bank's operations director for South Asia, met the Adviser to discuss the issues Bangladesh has been facing in the financial sector and identify possible areas of support the country needs.

During the discussion, the team appreciated the country's economic performance as well as its efforts in reducing poverty over the last 10-15 years. "The country achieved a quite remarkable degree of economic consistency in spite of political differences," Roome told reporters after the meeting.

Asked about the World Bank's plan about enhanced assistance programme to Bangladesh, he said: "It's not immediately clear when and where Bangladesh needs support."

World Bank President Robert B Zoellick recently announced that the Bretton Woods institution would significantly enhance their programme in developing countries in next three years in view of the global economic crisis.

The Finance Adviser said the uncertainty that has been created in the domestic front as the World Bank could not work out their future programme in Bangladesh due to non-submission of project portfolios.

He, however, informed that the Economic Relations Division (ERD) is already working on the project portfolios and also invited the project concept papers from different ministries.

Replying to a question, Dr Aziz said the government is working on the project portfolios at a pace so these could be submitted to the World Bank before the political transition.

In the external front, the uncertainty would depend on how the global recession prolongs and affects the World Bank's IDA (International Development Association). "There is no visible impact of the recession on the IDA so far," he said.

The Finance Adviser said the country is expected to get highest ever IDA commitment of US$ 1.34 billion during the current fiscal year.

Of this, commitments for US$ 800 million have already been finalized while US$ 150 million would be finalized by December and the rest during the January-June period.

Dr Aziz said the World Bank team gave an indication that there is a possibility to increase funding for the Padma Bridge by US$ 300 million in the second phase of construction.

They are also interested in funding the Eastern Bypass project and holding discussions in this regard with the Ministry of Communications, he said.

He added that the World Bank team has stressed the need for further activating the authority charged with the Dhaka strategic transportation programme. "They are looking at the project."

About uncertainty over the holding of general election, the Finance Adviser said he was still hopeful of a smooth political transition.

Asked what would be the economic consequences if election is not held on December 18, he said: "The future will tell us."

He, however, said political instability is one side of the economic development while law and order situation is other side. If the law and order situation remains normal, the private sector would continue with their momentum, while exports, agriculture production and inflow of remittance would remain unaffected.

"The economy will continue to grow unless the law and order situation deteriorates due to political instability," said the Finance Adviser.