The World Bank is going to provide $250 million loans to help Bangladesh create jobs and accelerate economic recovery from the COVID-19 pandemic.
The loan agreement is set to be signed soon once Prime Minister Sheikh Hasina approves it, says sources at Economic Relations Division (ERD).The financing will help Bangladesh create large-scale jobs for citizens, including women, youth, and migrant workers.
The project is expected to support reforms to modernise the trade and investment regime, build a stronger system of expanded safety nets and labor protections, and help vulnerable populations access better jobs, especially during crises.
To implement the initiatives and reform plans, the WB agreed to provide the loan assistance of a total of $750 million in three fiscal years.
Of the figure, Bangladesh already received $ 250 million in FY 2018-2019 and another $ 250 million in loans in FY 2019-2020.
And the remaining $250 million under the Third Programmatic Jobs Development Policy Credit (DPC-3) has already been approved by the WB for FY 2020-2021.
The loan has to be repaid in 30 years with a grace period of 5 years and the interest rate will be 1.25 percent, service charge 0.75 percent, and commitment charge on unpaid money will be 0.50 percent.Under the project, initiatives will be taken to create an investment environment, develop the labor market and create quality employment through the three pillars.
Under the first pillar, the overall environment for private investment outside the conventional readymade garment sector will be improved to create opportunities for short to medium-term employment. It is imperative to diversify the products and the market to create a close connection with the international market outside the readymade garment sector.
Under the second pillar, the overall protection of Bangladeshi workers and strengthen the government’s security cordon in the event of a future Covid-19 and similar will be increased. Most workers in Bangladesh still work on unwritten contracts without proper occupational safety and social insurance. Coronavirus pandemic has become a major disaster, especially for workers in the formal and informal sectors who are outside the scope of social protection.
To this end, it is necessary to take necessary measures to protect the earnings of the affected workers in the labor-intensive export sector. The capacity of the public sector needs to be enhanced in formulating guidelines and enforcing labor rules and standards for the protection of workers.
Under the third pillar, effective implementation of the principles adopted under DPC-1 and DPC-2 will strengthen programs and organizations that provide
current and future employment opportunities to youth, young women, and migrant workers.
The pillar also emphasizes several issues, including increasing the capacity of government institutions to facilitate migrant workers to receive government services before and after leaving the country; increase employment opportunities for women and bring other services, including daytime center licensing, within a legal framework.