ADB approves $600 million for Bangladesh to enhance economic management and governance
The program encompasses digitalization, green initiatives, streamlining of tax incentives and exemptions, and support measures for taxpayers to enhance tax compliance and morale.
The Asian Development Bank (ADB) has approved a $600 million policy-based loan (PBL) for Bangladesh to support a package of structural reforms aimed at boosting domestic resource mobilization, improving public investment efficiency, and fostering private sector development.
The program prioritizes reforms of state-owned enterprises, enhancement of transparency and governance, and measures to diversify the economy and increase competitiveness, according to an ADB press release issued on Wednesday.
ADB Regional Lead Economist Aminur Rahman stated, “ADB’s PBL addresses Bangladesh’s immediate development financing needs following the political transition. The reforms are designed to strengthen economic management, governance, and economic diversification, enhancing the country’s competitiveness.” He noted that the program was developed in close collaboration with the International Monetary Fund, World Bank, and other development partners.
Bangladesh faces challenges in revenue mobilization, with the lowest tax-to-GDP ratio globally at just 7.4%. The PBL aims to address this by introducing key policy actions to improve domestic resource mobilization, transparency, and accountability.
The program includes digitalization and green initiatives, rationalizing tax incentives and exemptions, and providing support to taxpayers to foster greater compliance. It also seeks to improve the transparency and efficiency of public investment projects through enhanced digitalization.
Additionally, the PBL focuses on promoting private sector growth and attracting foreign direct investment (FDI) by streamlining regulatory frameworks and ensuring a level playing field. Over 130 business-related services have been integrated into an online platform to simplify business operations. Governance and performance monitoring of state-owned enterprises have been strengthened, and the FDI approval process has been streamlined.
The program also supports policy and institutional reforms for a “whole-of-government” approach to logistics sector reform, aiming to lower trade costs and encourage export diversification.
ADB remains committed to building a prosperous, inclusive, resilient, and sustainable Asia-Pacific region while continuing its mission to eradicate extreme poverty. Established in 1966, the ADB is owned by 69 members, including 49 from the region.
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