Sheikh Hasina Challenge World Bank
In a major policy decision, Bangladesh Prime Minister Sheikh Hasina has announced that her country would itself implement the $3-billion Padma bridge project through mobilising domestic resources after the World Bank cancelled the loan deal recently.
Ms. Hasina also announced that her government would start the construction of the ambitious multi-purpose project immediately.
In a hard-hitting speech in Parliament on Sunday, she also came down on the World Bank for the “catastrophic act” of cancelling the loan agreement. Ms. Hasina, whose government was annoyed with the World Bank decision, said a country takes loan from the World Bank and repays it with interest; therefore, it is the country which will decide how to spend the money.
Outlining her plan to mobilise domestic resources for the project, she said the government would go for imposition of surcharge and issue foreign and local bonds for mobilising the fund. She said the people, including the Bangladeshi expatriates, would donate for the bridge which is both politically and economically important for the country. “Even school students are making calls over my mobile phone to tell me that they would provide money for the bridge by saving their tiffin money. And the Bangladeshis living abroad told me that they would provide fund if we start the project.”
She added: “The entire country has become recharged to fulfil the dream of constructing the bridge, mentioning that the country had achieved the liberation showing the same spirit.
Padma Bridge Project
Bangladesh must rely on WB
Says The Economist
Bangladesh must rely on loans of the World Bank to build the proposed Padma bridge as the idea of constructing the South Asia’s biggest infrastructure with domestic resources seems unworkable, The Economist said in a report published yesterday.
“Without the bank, there can be no bridge,” the report says, as Bangladesh relies heavily on Western aid for a vast array of projects that otherwise would not exist.
The report from the British popular magazine came while the ruling Awami League-led grand alliance has desperately been trying to revive talks with the Washington-based lender to fulfill its one of the key electoral promises.
The report quotes Prime Minister Sheikh Hasina as saying that Bangladesh would “not beg” from the WB. A sense of injured national pride has given rise to the unworkable notion that the bridge must now be built with Bangladesh’s “own resources,” it says.
In June this year, the bank cancelled its $1.2 billion loan, citing alleged corruption by Bangladeshi public servants. “The World Bank has identified various officials as being unable to leave the money for the bridge alone,” as the report puts it.
Sacking crooked-seeming officials is, for the WB, a precondition for resuming the lending. The Asian Development Bank, a co-financier of the project, is more ready than the WB to be a cheerleader for the government and is keen on resuscitating the project. Like the Japan International Co-operation Agency, another backer, it has kept the door open, said the report.
The Economist said the Bangladeshi government would probably return to talks with the WB after hectoring its perceived enemies first.
Hasina had accused Muhammad Yunus, a pioneer of micro finance and a Nobel peace laureate, of putting the WB up to walking off, says the report. Yunus had already denied that allegation.
To meet the WB’s conditions for reviving talks for the loan, Abul Hossain, a former communications minister, has already resigned and a couple of secretaries have been sent on leave.
Prime minister’s chief economic adviser Mashiur Rahman seems to be the last barrier to the talks, although the former bureaucrat said he had done nothing wrong and would only resign if the prime minister told him to.
Regardless of Rahman’s case, Bangladesh has a culture of impunity, the report says, citing that only one senior politician has ever gone to jail under an elected government for corruption, and that was a former dictator.
It adds the project has also got caught in the global and regional complex politics.
“Western governments do not want to see the Padma bridge project snapped up by a state-backed Chinese company (in return, perhaps, for an equity stake and for economic influence, as has happened with ports in Sri Lanka and Pakistan).”
“India, with which Bangladesh has usually had good relations, would do its best to block a high-profile Chinese involvement in its neighbour’s economy.”
The Economist report says Sheikh Hasina’s Awami League is livid enough that it will be unable to keep its electoral promise to build the bridge before the end of 2013. “Yet it would be even more appalled if the Bangladesh Nationalist Party, led by Sheikh Hasina’s arch-rival, Khaleda Zia, took office at the next election, bagging credit for the bridge. (That prospect is real: no elected government has won a second term).
“So, in the end, Sheikh Hasina has no strong incentive, other than the country’s best interests, to mollify the World Bank,” said the report.
The biggest infrastructure project in South Asia to be paid for by foreign donors is a $3 billion bridge in Bangladesh intended to span the Padma river.
The bridge is the stuff of donors’ dreams, aiming to end the isolation of Bangladesh’s poor south-west, home to three crore people who are cut off by these vast waters from the capital, Dhaka, and the rest of the country.
The report says the proposed 6.15-km bridge could be a gateway to India, tying Dhaka to the great metropolis of Kolkata. It is also a crucial piece of an even more ambitious dream of connecting South Asia with South-East Asia, via Bangladesh and Myanmar.
According to official estimates, the bridge could raise Bangladesh’s annual growth rate by 1.2 percentage points.