Another $1.25b from ADB would be of great help

Bangladesh has sought an additional $1.25 billion from the Asian Development Bank (ADB) to ballast the country's purses in its fight against coronavirus and beyond. 

The Manila-based development lender has already committed to providing $602.39 million as budget support as well as to meet the emergency expenditure in the health sector.  

"The immediate assistance from the ADB has been of great help for Bangladesh. But our needs are much higher under the current circumstances," Finance Minister AHM Mustafa Kamal said in a press release yesterday.

The press release was distributed after his telephone call with ADB President Masatsugu Asakawa.

During the discussion, Kamal requested Asakawa to take into account the scale of Bangladesh's coronavirus-induced wreckage.

Kamal sought $1 billion in budget support for fiscal 2020-21 in addition to the $500 million to counter the fallout of coronavirus on Bangladesh's economy.

He also sought $100 million to provide incentives to up to the 2.5 lakh frontline workers such as health professionals, civil administration, law-enforcement agencies and emergency service providers.

The finance minister urged the ADB to provide another $150 million, which would be used to create jobs for the migrant workers and locals who have lost jobs because for the pandemic as well as to rehabilitate the micro, cottage, small and medium entrepreneurs. 

Kamal requested for waiver of commitment charges on the loans provided from the ADB's Ordinary Capital Resources (OCR) fund.

Regular market-based OCR loans are generally made to developing countries that have attained a higher level of economic development while concessional OCR loans are made to lower-income developing countries.

"We have requested the ADB to continue its continuous support and assistance to help us ride out the crisis," Kamal said.

The two also discussed ADB-financed ongoing projects and the projects in the pipeline and Asakawa asked for measures for faster implementation of the projects.

At present, there are 63 ongoing projects with ADB financing of about $8.7 billion. The lender has committed another $9.94 billion for 81 projects that are in pipeline.

The ADB chief has taken into cognisance the help Bangladesh needs and would inform the country on time after assessing the proposals, the press release said. 

A development partner of Bangladesh since 1973, the ADB has extended financial assistance amounting to $25.14 billion so far to the country.

The ADB was one of the first multilateral organisations that categorically said how much Bangladesh's economy would bear the brunt of the pandemic.

Bangladesh's gross domestic product may contract by as much as 1.1 per cent in the hypothetical worst-case scenario of a significant outbreak of the coronavirus in the country, it said in an analysis in early March.

That means the deadly pathogen could wipe $3.02 billion off the $300 billion-plus economy.  In such a scenario, 894,930 jobs will be lost, according to the ADB.

The forecast came before Bangladesh reported the maiden cases of coronavirus infections on March 8. Since then, the novel virus has infected 2,948 people and killed 101 in Bangladesh and brought the economy to its knees.

Prime Minister Sheikh Hasina has announced several stimulus packages totalling Tk 95,619 crore, which is about 3.3 per cent of the GDP, to stave off the fallout from the lethal pathogen that has compelled the government to press pause on most economic activities since March 26.

The countrywide shutdown is scheduled to be lifted on April 25, but given the exponential rise in confirmed cases of COVID-19, it is expected to be extended further.