In two previous DSC tranches in 2003 and 2004, Bangladesh received $500 million from the bank. It may get another $200 million in the third tranche if it can meet 14 specific WB conditions.

"Bangladesh has made some progress in some areas, but there are also some outstanding issues. We can't proceed if there is no visible progress in those areas," said Sadiq Ahmed, head of a visiting WB team, after a meeting with Finance Minister M Saifur Rahman yesterday.

Ahmed, a WB sector director for South Asia, did not specify a timeline for disbursement of the next DSC chunk. However he said the government would like to have it by July, soon after it receives a $150 million loan from the International Monetary Fund (IMF), likely in June.

He said this year Bangladesh probably would get a total of $500 million credit from the WB and the IMF as budgetary or balance of payment support. Apart from the third DSC tranche and the IMF credit, the remaining $150 million would come from the WB for education sector development.

STOCKTAKING
"At the moment, we are taking stock of the progress Bangladesh has made in the last two years using the DSC. We have been discussing the situation with the government," Ahmed told the press after the final round of talks with the finance minister.

The stocktaking mission will report back to the WB top management. It will also monitor the government initiatives in June and July to meet the conditions. And, considering all these, the WB board will take the decision on the credit.

Ahmed said they have briefed Saifur on the outstanding issues. Among those ending corruption, structural reforms in the energy sector and poverty reduction feature most prominently.

The WB emphasises elimination of corruption not from a political perspective, he said, but from a purely economic one. For example, tax evasion, bank loan default and non-payment of electricity, gas and water bills are just different kinds of corruption.

He cited a WB analysis that shows how acutely corruption hampers development, quipping, "The more corrupt a country the less developed it is."

Besides, without ending corruption, poverty eradication remains a remote possibility, he said, adding that is where lies the real importance of having a fully staffed and operational ACC.

He appreciated Bangladesh's achievements in human development and GDP growth but also pointed out that about 50 percent of the population are still poor. "So, the rate of GDP growth needs to be further scaled up."

Following the meeting, Saifur Rahman said the discussion with the WB mission was quite satisfactory. "They are happy with the steps we have taken in different sectors excepting a couple or two," he claimed.

The minister admitted that the mission has some reservations about the energy sector, but claimed, "At the same time, they also appreciated the progress we have already made in this sector".

On the team's stance on the ACC, Saifur said, "They are neither happy nor unhappy about it." Terming the present crisis at the ACC as 'birth pains', he said like any other new organisation it too will need time to function smoothly.

Among the other WB conditions for the credit are drafting a financial reporting law providing for an independent financial oversight body, reducing loss of state-owned enterprises by at least 10 percent and limiting all arrears to PDB and Desa to three months, all by June.

The WB also wants the government to announce a time-band plan for the financial restructuring of the power sector and to increase the prices of gas and electricity.