Dhaka, Bangladesh (BBN)- Bangladesh government on Sunday successfully concluded negotiations with the World Bank on Food Crisis Development Support Credit of US$130 million.
The credit is scheduled to be discussed in the World Bank Board for approval on October 10 this year, the World Bank says in a press statement on Sunday.
The proposed program would assist the government of Bangladesh to implement its on-going policies and pro-poor programs to cope with high food prices, according to the statement.
The credit from the World Bank has 40 years to maturity, including a 10-year grace period; and carries a service charge of 0.75 per cent.
Finance secretary Dr. Mohammad Tareque and World Bank lead economist in Dhaka office Vinaya Swaroop led respective sides in the negotiations.
“The food price inflation has caused enormous hardship to the poor and low-income people in Bangladesh,” said World Bank acting country director Zahid Hussain.
He commended government steps including Open Market Sales (OMS) for rice and 100-Day employment guarantee program to help the poor.
In the fiscal 2008-09 (FY09) budget, the government has allocated over $600 million in additional funds for food-based safety net programs including $300 million in the new 100-Day Employment Guarantee Scheme.
The government has also raised the strategic public food reserve from 1 to 1.5 million tons—at an additional cost of roughly $200 million.
The proposed operation would create fiscal space in the government budget, to partially finance the projected FY09 deficit of 5.0 per cent of gross domestic product (GDP), the statement added.