Japan may give $600-700m in budget support

Bangladesh can expect budget support of $600-700 million from Japan as the development partner has responded positively to the country's request for financial assistance to help the economy weather the storm caused by the Ukraine war.

The disclosure was made by Planning Minister MA Mannan following a meeting yesterday with the outgoing and incoming chief representatives of the Japan International Cooperation Agency.

Both the top Jica officials were positive about the proposal for budget support, he said, adding that the Economic Relations Division is holding talks over the matter.

Jica provided Bangladesh with $620 million in total in the past two fiscal years to help the country manage the impacts of the pandemic.

"I came here in June 2020 amid the pandemic and I could see the great efforts of the people and the government of Bangladesh putting in to overcome the effects of Covid -- it was an impressive experience," Yuho Hayakawa, the outgoing Jica country representative, after the meeting.

Just as the economy was recovering from the pandemic slowdown the war in Ukraine started, leaving Bangladesh on shaky grounds once again.

Given the prolonged nature of wars, the government is seeking support from development partners to mitigate the effects.

The government is expecting $2.5-3 billion by June next year from multilateral lenders, according to an estimate made by the ERD, which manages foreign debt repayment activities, in June.

Budget support is being sought instead of other forms of assistance as it would be reflected in the country's balance of payment and shore up the delicate foreign currency reserves, which stood at $36.9 billion as of September 21.

It would also help the government extend cash assistance to the poor and the vulnerable to cushion them from the impacts of inflation triggered by the war.

"I will definitely contribute to the development of Bangladesh and deepening the relations between Bangladesh and Japan," said Ichiguchi Tomohide, the incoming Jica chief representative.

Tomohide previously worked in Jica's Bangladesh Desk in Tokyo and was involved with the metro rail, the Kanchpur, Meghna and Gumti bridges and the Matarbari coal-fired plant projects.