Washington, DC (BBN) - The World Bank (WB) on Wednesday approved a US$130 million loan to Bangladesh aiming to ease the pressure on the country's current budget which is staggering from expansion of food-related spending including social protection programs.
The Food Crisis Development Support Credit Project, approved on the day by the World Bank, is part of the WB's fast-track Global Food Response Program (GFRP).
The credit from the International Development Association (IDA), the WB's concessionary arm, has 40 years to maturity with a 10-year grace period; it carries a service charge of 0.75 percent, according to a WB press statement.
The food price shock has increased Bangladesh's poverty rate by around 3 percentage points. It also found that nearly 8 per cent of the surveyed households pulled their children out of schools to get jobs to assist their families cope with the crisis. In addition, many poor households have cut their food intake, the WB said.
Bangladesh government has allocated $800 million in its FY09 budget to deal with this crisis. These measures include making food grain, particularly rice, available to poor people at subsidized prices, scaling up existing safety net programs, setting up a new employment guarantee scheme to help people in poor areas, and increasing the country's strategic food reserves.
The WB is also providing ongoing assistance to strengthen Bangladesh's social safety net programs, including a new 100 day employment guarantee scheme that started on September 15 this year.
BBN/SI/SSF/AD-30October08-1:16 AM (BST)