World Bank agrees to finance for development of metro rail-centric communication
The World Bank has agreed to provide fund for developing the metro rail-centric communication system, constructing walkways beside canals and procurement of electronic buses. It will provide support under the Integrated Corridors Management (ICM) project to turn every metro rail station from Mirpur-12 to Banglamotor integrated communication center, said a press release. Dhaka North City Corporation(DNCC) Mayor Md. Atiqul Islam discussed the matter with the Vice President for Infrastructure at the World Bank Guangzhe Chen at World Bank headquarters on Monday, said an official release. Chief Engineer of DNCC Brigadier General Mohammad Amirul Islam, also a member of the delegation, said, "Though the roads under metro rail have been developed, there is no good system for coming and going through the connecting roads from the metro rail stations. But, metro stations in developed countries have integrated corridor management for the movement of passengers.” “The World Bank has agreed to provide financial support for this project. If everything goes well, the issue of financial cooperation is expected to be approved by the World Bank's board next November,” Amirul Islam said. The Bank is interested to provide about 150 million US dollars, he added. A team led by Mayor Md. Atiqul Islam went to Washington DC on the occasion of the World Bank's 20th Conference on Transforming Transportation-2023 in Washington DC, USA.
New World Bank leadership must put Climate Action as top priority: V20
Following the announcement of a change of leadership at the helm of the World Bank Group, the Chair of the Vulnerable Twenty Group of Ministers of Finance (V20) asserts that global development needs an international financial system that is fit-for-purpose given the prevailing climate crisis; and urges that the next head of the World Bank puts climate amongst its top priorities. Reacting to the resignation of the World Bank President, David Malpass, Ken Ofori-Atta, Minister for Finance of Ghana and V20 Chair, highlighted that “major reforms to the world’s international financial architecture are urgently needed to prevent the escalating climate crisis from overwhelming the global economy.” He specifically called for change in the areas of debt; the shifting of financial flows to serve climate goals; and the need to mainstream climate risks in institutional surveillance. Also Read: GEF climate adaptation funds to support V20 Group efforts to minimize climate impacts He demurred at the continual inequities in keeping to the 1.5C safety limit of the Paris Agreement. The G7, with 25% of current emissions and the G20 members collectively, have taken the world on track for more than 3ºC of warming with its members’ NDCs having already fully exhausted its 1.5 ºC carbon budget on a fair shares basis, while the V20 remain fully compliant on a fair shares basis. A new World Bank leadership must be committed to positive climate action (i.e. achieving a fair and joint transition for vulnerable countries) as a top priority. “We can only be committed to climate forward leaders. The continued failure of the international financial system to uphold the Paris Agreement has kept our economies and communities on the front lines of the climate crisis. The next World Bank President’s first test of leadership will be her or his ability to act on debt, jobs and climate change, without pitting them against each other,” said Ken Ofori-Atta, Chair of the V20 and the Minister for Finance, Republic of Ghana. Also Read: V20, G7 reach agreement on financial protection against climate change loss “The V20 is determined to actively support and work with institutions such as the International Monetary Fund (IMF) and the World Bank by contributing our policy experience and insights in serving the 1.5 billion people across our 58 member economies. We are committed to helping the new World Bank leadership to facilitate a comprehensive debt reform, jobs, digitalization, ensure climate smart financial flows, and to accelerate efforts to drive down the increasingly daunting cost-of-capital. The new Bank president can also count on the V20 to boldly advocate this agenda. We look to the new leadership to bring innovative approaches to unlock the needed transformation in the global financial system, as we all work towards building a climate resilient global economy.” V20 ministers will meet during the WB and IMF spring meetings in April 2023. Currently chaired by Finance Minister Ken Ofori-Atta of the Republic of Ghana, V20 Group of Finance Ministers is a dedicated cooperation initiative of economies systematically vulnerable to climate change.
World Bank: Myanmar economy to grow 3%, dragged by conflict
Myanmar’s economy grew 3% last year and will likely achieve the same pace in 2023, but still lags far behind where it stood before the army seized power in early 2021, the World Bank said in a report released Monday. The global development agency estimates Myanmar’s level of economic activity is still more than 10% below where it stood before the pandemic and the military takeover. On a per capita basis it is even further behind, it says. If the global economy slows further as expected, exports and investment may weaken after recovering somewhat from the pandemic and the disruptions caused by civil conflict and foreign sanctions after the army ousted Aung San Suu Kyi's elected government. The reversion to military control after nearly a decade of quasi-civilian rule provoked mass protests that spun into armed revolt, on top of decades-long conflict between the government and armed ethnic groups. “Economic activity has continued to be disrupted by persistent conflict, which has had devastating impacts on lives and livelihoods, and by electricity shortages," the report said. Myanmar’s economy contracted by about 18% in 2021, after growing at a pace of 6% or more in the years before. The slow pace of expansion last year, from a very low base, suggests conditions remain weak. “What’s surprising is that the growth hasn’t been higher,” Kim Alan Edwards, a World Bank senior economist, said in an online briefing. “Growth is nowhere near levels we saw in 2019.” Like other emerging economies, Myanmar has had to contend with a weakening of its currency against the dollar. The kyat's value dropped by about a quarter in June-December last year and has less than half the value it had two years earlier. That makes imports of vital commodities like oil much more expensive in local terms. Combined with higher prices for many commodities including oil and gas, Myanmar has seen inflation hit nearly 20% as of July, the report said. Read more: Myanmar opium cultivation surged 33% amid violence, UN finds “While the kyat has stabilized in recent months, foreign currency shortages persist, which together with onerous trade restrictions have affected businesses’ ability to supply of a range of imported products," it said. The World Bank economists said controls imposed by the central bank to support the kyat and protect foreign exchange reserves have been relaxed, making it easier for exporters to obtain credit or retain their earnings. But many businesses and people are forced to comply with orders to convert foreign currency into kyat at the official rate of 2,100 kyats per dollar, when the market value is about 2,800 kyats. The report says agriculture and garment manufacturing have recovered and some businesses are finding ways to operate by using informal payments and trade channels. The reopening of Myanmar's trade routes with China also has helped. But risks have been heightened by security issues, due to the civil conflict, that add to costs and delays for transporting goods. “There are no easy fixes to Myanmar's situation," Edwards said, noting a lack of transparency that obscures what is going on. “Rules and regulations can change anytime and can favor some and not others."
UN forecasts fall in global economic growth to 1.9% in 2023
The United Nations forecast Wednesday (January 25, 2023) that global economic growth will fall significantly to 1.9% this year as a result of the food and energy crisis sparked by the war in Ukraine, the ongoing impact of the COVID-19 pandemic, persistently high inflation and the climate emergency. Painting a gloomy and uncertain economic outlook, the U.N. Department of Economic and Social Affairs said the current global economic slowdown “cuts across both developed and developing countries, with many facing risks of recession in 2023.” “A broad-based and severe slowdown of the global economy looms large amid high inflation, aggressive monetary tightening, and heightened uncertainties,” U.N. Secretary-General Antonio Guterres said in a foreword to the 178-page report. The report said this year's 1.9% economic growth forecast — down from an estimated 3% in 2022 — is one of the lowest growth rates in recent decades. But it projects a moderate pick-up to 2.7% in 2024 if inflation gradually abates and economic headwinds start to subside. Read More: Global economic growth will slow down in 2023, but will pick up in 2024: IMF chief In its annual report earlier this month, the World Bank which lends money to poorer countries for development projects, cut its growth forecast nearly in half, from it previous projection of 3% to just 1.7%. The International Monetary Fund, which provides loans to needy countries, projected in October that global growth would slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023. IMF Managing Director Kristalina Georgieva said at last week’s World Economic Forum in Davos that 2023 will be a difficult year, but stuck by the projection and said “we don’t expect a global recession.” Shantanu Mukherjee, director of the economic analysis and policy division of the U.N. Department of Economic and Social Affairs, highlighted the growing income inequality in the world at a news conference launching the report. Between 2019 and 2021, he said, average incomes for the top 10% rose by 1.2% while the incomes of the lowest 40% fell by 0.5%. Read More: Bangladesh-Turkiye Business Forum launched to usher in new era of economic cooperation “The top 10% now earns on average over 42 times what the lowest percentiles” earn, Mukherjee said. According to the U.N. report, this year “growth momentum has weakened in the United States, the European Union and other developed economies, adversely affecting the rest of the world economy.” In the United States, GDP is projected to expand by only 0.4% in 2023 after estimated growth of 1.8% in 2022, the U.N. said. And many European countries are projected to experience “a mild recession" with the war in Ukraine heading into its second year on Feb. 14, high energy costs, and inflation and tighter financial conditions depressing household consumption and investment. The economies in the 27-nation European Union are forecast to grow by just 0.2% in 2023, down from an estimated 3.3% in 2022, the U.N. said. And in the United Kingdom, which left the EU three years ago, GDP is projected to contract by 0.8% in 2023, continuing a recession that began in the second half of 2022, it said. Read More: China’s economic growth falls to second-lowest level in four decades With China’s government abandoning its zero-COVID policy late last year and easing monetary and fiscal policies, the U.N. forecast that its economy, which expanded by only 3% in 2022, will accelerate to 4.8% this year. “But the reopening of the economy is expected to be bumpy,” the U.N. said. ”Growth will likely remain well below the pre-pandemic rate of 6-6.5%.” The U.N. report said Japan’s economy is expected to be among the better-performing among developed countries this year, with GDP forecast to increase by 1.5%, slightly lower than last year’s estimated growth of 1.6%. Across east Asia, the U.N. said economic recovery remains fragile though GDP growth in 2023 is forecast to reach 4.4%, up from 3.2% last year, and stronger than in other regions. Read More: AL govt's ouster a 'must' to tackle political, economic crises In South Asia, the U.N. forecast average GDP growth will slow from 5.6% last year to 4.8% this year as a result of high food and energy prices, “monetary tightening and fiscal vulnerabilities.” But growth in India, which is expected to overtake China this year as the world’s most populous nation, is expected to remain strong at 5.8%, slightly lower than the estimated 6.4% in 2022, “as higher interest rates and a global slowdown weigh on investments and exports,” the U.N. report said. In Western Asia, oil-producing countries are benefiting from high prices and rising output as well as a revival in tourism, the U.N. said. But economies that aren’t oil producers remain weak “given tightening access to international finance and severe fiscal constraints,” and average growth in the region is projected to slow from an estimated 6.4% in 2022 to 3.5% this year. The U.N. said Africa has been hit “by multiple shocks, including weaker demand from key trading partners (especially China and Europe), a sharp increase in energy and food prices, rapidly rising borrowing costs and adverse weather events.” Read More: Burden of Bangladesh’s economic and political stability must be shared One result, it said, is mounting debt-servicing burdens which have forced a growing number of African governments to seek bilateral and multilateral support. The U.N. projected economic growth in Africa to slow from an estimated 4.1% in 2022 to 3.8% this year. In Latin America and the Caribbean, the U.N. said the outlook “remains challenging,” citing labor market prospects, stubbornly high inflation and other issues. It forecast that regional growth will slow to just 1.4% in 2023 from an estimated expansion of 3.8% in 2022. “The region’s largest economies – Argentina, Brazil and Mexico – are expected to grow at very low rates due to tightening financial conditions, weakening exports, and domestic vulnerabilities,” the U.N. said. Read More: Bangladesh considering ‘pros and cons’ of Indo-Pacific Economic Framework: Momen For the world’s least developed countries, the U.N. said growth is projected at 4.4% this year, about the same as last year but significantly below the UN's target of 7% by 2030.
World Bank MD reiterates strong support to Bangladesh
World Bank Managing Director for Operations Axel van Trotsenburg on Tuesday reaffirmed the World Bank’s strong support for Bangladesh to help achieve its vision of upper-middle income status by 2031. He came to Dhaka on Saturday on a three-day visit, marking the 50 years of partnership between the World Bank and Bangladesh. He said Bangladesh’s development and growth trajectory is an inspiration for many countries, according to a press release. “It has tackled many development challenges in remarkable ways. It has reduced poverty in record time and has played a leading and innovative role in disaster risk management and adaptation to climate change,” said van Trotsenburg. “The World Bank has been a steadfast partner for the past five decades and remains committed to help Bangladesh achieve green and inclusive economic growth and development.” Read more: ‘World Bank should support countries hit hard by Covid-19, Russia-Ukraine war, climate change’ On Monday, van Trotsenburg met Prime Minister Sheikh Hasina and commended Bangladesh’s role in climate change adaptation and disaster preparedness, and the Prime Minister’s strong leadership as the chair of the Climate Vulnerable Forum during 2020-2022. “Despite being severely affected by climate change, Bangladesh has emerged as a global leader in climate resilience and disaster preparedness by taking a bold and innovative approach reducing cyclone-related deaths more than 100-fold since 1971,” he added. The World Bank helped Bangladesh build and rehabilitate more than 700 km of coastal embankments, 1,000 cyclone shelters that also operate as schools, and 550 km of paved roads that improve access for surrounding villages. Read more: World Bank a key partner of Bangladesh’s economic growth: Finance Minister Today, van Trotsenburg visited a World Bank-financed cyclone shelter that serves as a primary school during normal weather and met with the local communities. He visited the Kutupalong Rohingya camps in Cox’s Bazar and thanked Bangladesh for its generosity to provide shelter to about 1.1 million displaced Rohingya people. The World Bank has leveraged $590 million in grant financing to help Bangladesh meet to the basic needs of the Rohingya people and the host communities. During the visit, he also met the finance minister, senior government officials, and development partners and discussed Bangladesh’s development priorities. He was accompanied by World Bank Vice President for the South Asia Region, Martin Raiser. Read more: World Bank managing director to arrive in Dhaka Saturday “The World Bank is helping Bangladesh navigate through challenges of global shocks, including the impacts of the pandemic and the Russian invasion of Ukraine, and address barriers to higher growth,” Trotsenburg said. “We are committed to supporting Bangladesh in its goal to become an upper-middle income country by 2031. For this, we will help create more private sector jobs, improve social and economic inclusion, and reduce climate vulnerability.” Over the 50-year partnership, the World Bank has committed about $39 billion in International Development Association (IDA) financing in the form of grants, interest-free loans, and concessional credits to help the country. Currently Bangladesh has the largest ongoing IDA program, and the World Bank is Bangladesh’s largest development partner.
‘World Bank should support countries hit hard by Covid-19, Russia-Ukraine war, climate change’
Bangladesh's Prime Minister Sheikh Hasina today (January 23, 2023) urged the World Bank and other international organizations to strengthen their support for countries hit hard by the Covid-19 pandemic, Russia-Ukraine war, and climate change. The PM said this when World Bank Managing Director for Operations, Axel van Trotsenburg, paid a courtesy call on her at her office this morning. PM’s speechwriter Md Nazrul Islam briefed reporters after the meeting. Sheikh Hasina said that Bangladesh had achieved an impressive 8-plus percent GDP growth before Covid-19 broke out, but it declined due to the pandemic. When Bangladesh was regaining the growth momentum, it was hit hard again by the Russia-Ukraine war. Read more: World Bank: Recession a looming threat for global economy Developing countries like Bangladesh are dealing with the challenges brought about the economic fallout, including soaring food and fuel prices, she said. The PM focused on her government’s measures and endeavours to fight the climate change, including projects undertaken with financing from Climate Trust Fund, to mitigate the adverse impacts by creating green-belt, afforestation, sustainable housing and livelihood. She said developed countries shares responsibility for climate change but unfortunately, they are not complying with their commitments to assist the climate vulnerable countries. BANGLADESH MADE INCREDIBLE DEVELOPMENT: WB MANAGING DIRECTOR The World Bank Managing Director praised Prime Minister Sheikh Hasina for Bangladesh’s incredible development journey under her leadership. The per capita income in Bangladesh was only some US $50 in 1972, which is now US $2824, he added. Read more: World Bank okays $250m for Bangladesh for better environmental management, green investments Talking about the current context, Axel van Trotsenburg said that developing countries like Bangladesh need to create employment opportunities for youths to face the current challenges caused by the Covid-19 pandemic and Russia-Ukraine war. Employment generation is also needed for accomplishing the Sustainable Development Goals (SDGs), he added. He said the World Bank has been assisting Bangladesh since 1972 and will continue to stand beside the country. “I’ve come here to strengthen the World Bank’s partnership with Bangladesh,” said the WB senior official. Read More: World Bank a key partner of Bangladesh’s economic growth: Finance Minister About the development of Bangladesh, Sheikh Hasina said the country has gained fast development in the last 14 years thanks to the continuation of political stability, the government’s tireless efforts to implement its political visions and its desire to work for the people. PM’s International Affairs Adviser Dr Gowher Rizvi, Ambassador-at-Large Mohammd Ziauddin, PM’s Principal Secretary M Tofazzel Hossain Miah, and Finance Senior Secretary Fatima Yasmin were present at the meeting.
World Bank a key partner of Bangladesh’s economic growth: Finance Minister
Finance Minister AHM Mustafa Kamal on Sunday praised the World Bank for its continued support towards Bangladesh’s development. He said Bangladesh's growth has increased by 74 times since 1972, and the World Bank had a role to play behind it. “After independence, the country's GDP growth was only $6.3 billion, which has now increased to $465 billion,” he said. Kamal said this while speaking as the chief guest as the World Bank and Bangladesh celebrated its 50 years of partnership at the Bangabandhu International Conference Center (BICC) in the capital on Sunday. Also Read: WB cuts Bangladesh growth target by 0.9 percent to 5.2 percent The Finance Minister also said that Bangladesh is currently the 35th largest economy, and the poverty rate has come down to 20 percent, per capita income increased to $2,824 and average life expectancy increased to 73 years. Also read: World Bank managing director to arrive in Dhaka Saturday Highlighting the future plans, the Finance Minister said, “Our next target will be to turn Bangladesh into an upper-middle income country by 2031, and a Smart Developed Bangladesh in 2041.” World Bank Managing Director (Operation) Axel van Trotsenbur, World Bank South Asian Region Vice President Martin Riser, Economic Relations Division Secretary Sharifa Khan, and World Bank Country Director for Bangladesh and Bhutan Abdoulaye Seck, among others, spoke at the function.
World Bank managing director to arrive in Dhaka Saturday
World Bank Managing Director of Operations Axel van Trotsenburg will arrive in Dhaka Saturday on his first official visit to Bangladesh. During his three-day visit, Axel will join a public event in Dhaka on January 22 to mark 50 years of the partnership between Bangladesh and the World Bank Group and celebrate the country's "remarkable" development achievements, said a media statement. "Bangladesh has shown the world what can be done to dramatically reduce poverty through successful innovations in human development, women’s empowerment, and climate adaptation," Axel said. Read more: Bangladesh wants low-interest loan from World Bank amid economic woes "The World Bank is proud of its 50-year partnership with Bangladesh and being part of the country's remarkable development journey. I look forward to my visit and to seeing these achievements firsthand." Axel will meet with the prime minister, finance minister, senior government officials, civil society representatives, and development partners, and visit the World Bank-supported projects. World Bank to provide US$300 million to help Bangladesh’s pandemic responseHe will be accompanied by Martin Raiser, World Bank vice-president for South Asia. Read more:
WB cuts Bangladesh growth target by 0.9 percent to 5.2 percent
The World Bank on Wednesday cut Bangladesh's economic growth (gross domestic product -GDP) forecast for the 2022-23 fiscal year further by 0.9 percent to 5.2 percent, due to a combination of factors including elevated inflation, energy shortages and tightening of the monetary policy. The GDP growth has been predicted in the World Bank's 'Global Economic Prospects report released on Tuesday night. The forecast is down from 7.2 percent growth in the previous year. The government has set a target of 7.5 percent GDP growth in the current financial year. The World Bank said that the growth of Bangladesh may increase slightly to 6.2 percent in the next financial year. Read more: Bangladesh wants low-interest loan from World Bank amid economic woes According to the report, the economy of Bangladesh is being affected due to the global context. “Bangladesh’s economy is affected by the global situation and the sharp increase in fuel prices in the international market,” it said. As a result, there has been a disruption in power supply to industries and households. Industrial production has been disrupted. The government had to do load-shedding to deal with the situation. Apart from this, buying of cars has been stopped as well as luxury goods have been discouraged, the World Bank report said. Earlier, the Asian Development Bank (ADB) predicted a 6.6 percent GDP growth in Bangladesh in the current fiscal year. The ADB's growth forecast was based largely on a slowdown in domestic consumption demand, a decline in exports and remittances, and a slowdown in the global economy. Read more: Bangladesh wants open, transparent relationship with World Bank: PM
World Bank: Recession a looming threat for global economy
The global economy will come “perilously close” to a recession this year, led by weaker growth in all the world’s top economies — the United States, Europe and China — the World Bank warned on Tuesday. In an annual report, the World Bank, which lends money to poorer countries for development projects, said it had slashed its forecast for global growth this year by nearly half, to just 1.7%, from its previous projection of 3%. If that forecast proves accurate, it would be the third-weakest annual expansion in three decades, behind only the deep recessions that resulted from the 2008 global financial crisis and the coronavirus pandemic in 2020. Though the United States might avoid a recession this year — the World Bank predicts the U.S. economy will eke out growth of 0.5% — global weakness will likely pose another headwind for America’s businesses and consumers, on top of high prices and more expensive borrowing rates. The United States also remains vulnerable to further supply chain disruptions if COVID-19 keeps surging or Russia’s war in Ukraine worsens. And Europe, long a major exporter to China, will likely suffer from a weaker Chinese economy. The World Bank report also noted that rising interest rates in developed economies like the United States and Europe will attract investment capital from poorer countries, thereby depriving them of crucial domestic investment. At the same time, the report said, those high interest rates will slow growth in developed countries at a time when Russia’s invasion of Ukraine has kept world food prices high. “Russia’s invasion of Ukraine has added major new costs,” World Bank President David Malpass said on a call with reporters. “The outlook is particularly devastating for many of the poorest economies where poverty reduction is already ground to a halt and access to electricity, fertilizer, food and capital is likely to remain limited for a prolonged period.” The impact of a global downturn would fall particularly hard on poorer countries in such areas as Saharan Africa, which is home to 60% of the world’s poor. The World Bank predicts per capita income will grow just 1.2% in 2023 and 2024, which is such a tepid pace that poverty rates could rise. Read more: Emerging, developing economies less prepared for downturn than 10 years ago: World Bank “Weakness in growth and business investment will compound the already devastating reversals in education, health, poverty and infrastructure and the increasing demands from climate change,” Malpass said. “Addressing the scale of these challenges will require significantly more resources for development and global public goods.” Along with seeking new financing so it can lend more to poorer countries, Malpass said, the World Bank is, among other things, seeking to improve its lending terms that would increase debt transparency, “especially for the rising share of poor countries that are at high risk of debt distress.” The report follows a similarly gloomy forecast a week earlier from Kristina Georgieva, the head of the International Monetary Fund, the global lending agency. Georgieva estimated on CBS’ “Face the Nation” that one-third of the world will fall into recession this year. “For most of the world economy, this is going to be a tough year, tougher than the year we leave behind,” Georgieva said. “Why? Because the three big economies — U.S., EU, China — are all slowing down simultaneously.” The World Bank projects that the European Union’s economy won’t grow at all next year after having expanded 3.3% in 2022. It foresees China growing 4.3%, nearly a percentage point lower than it had previously forecast and about half the pace that Beijing posted in 2021. The bank expects developing countries to fare better, growing 3.4% this year, the same as in 2022, though still only about half the pace of 2021. It forecasts Brazil’s growth slowing to 0.8% in 2023, down from 3% last year. In Pakistan, it expects the economy to expand just 2% this year, one-third of last year’s pace. Other economists have also issued bleak outlooks, though most of them not quite as dire. Economists at JPMorgan are predicting slow growth this year for advanced economies and the world as a whole, but they don’t expect a global recession. Last month, the bank predicted that slowing inflation will bolster consumers’ ability to spend and power growth in the United States and elsewhere. Read more: World Bank dims outlook for global economy amid Russia war “The global expansion will turn into 2023 bent but not broken,” the JPMorgan report said.