Transparency key to ADP spending: IMF
Staff Correspondent
The blown up spending, particularly through the Annual Development Programme (ADP), laid out in the budget for 2004-05 would be unfeasible without improved fiscal transparency and accountability, and better project management, observed International Monetary Fund (IMF) Deputy Managing Director (DMD) and Acting Chair Takatoshi Kato. While presenting the fund's second review of Bangladesh's economic performance under its three-year Poverty Reduction and Growth Facility (PRGF) to IMF Executive Board on July 28, Kato also noted that achieving the revenue target of FY05 would require a much strengthened tax administration. The IMF acting chair empha-sised 'timely actions to expand the Large Taxpayers' Unit to cover the value-added and withholding taxes' and fundamental reforms in the National Board of Revenue (NBR) to underpin the programmed revenue targets for attaining the Millennium Development Goals. Kato lauded the government for it's 'sound macroeconomic management' -- keeping inflation in check and maintaining robust growth -- that has kept the PRGF-supported programmes on course, despite a difficult political environment. He however said there were some slippage in implementing key reforms in the nationalised commercial banks and the tax administration. In a press release on Friday the IMF said, after the second review of the PRGF, "The Executive Board approved Bangladesh's request for a waiver on the non-observance of structural performance criteria on making fully operational a Central Intelligence Cell (CIC) by the end of December 2003 and on adopting resolution strategies for the four nationalised commercial banks by the end of April 2004." The decision enables Bangladesh to draw an amount equivalent to $72 million as the third tranche of the PRGF, with which the total disbursement under the arrangement will rise to $216 million. The IMF Executive Board on July 28 also approved Bangladesh's request for activation of the Trade Integration Mechanism (TIM) together with an augmentation of the PRGF amounting to $78 million. The TIM is designed to help Bangladesh cope with balance of payment pressures stemming from Multifibre Arrangement (MFA) phase out. This is the first activation of TIM since the executive board approved it on April 2, 2004. Kato, however, highlighted that, "Strong efforts on the part of the authorities will also be needed urgently in further defining and implementing the post-MFA action programme." Pushing for energy sector deregulation, the IMF DMD said, "Domestic energy prices will also need to be kept under close review with timely adjustment when needed." The IMF board also discussed the devastating impacts of the current flooding.
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