The Asian Development Bank has announced a $600 million policy-based loan to support the Bangladesh government.

The loan would back a series of structural reforms aimed at enhancing domestic resource mobilization, improving public investment project efficiency, fostering private sector development, reforming state-owned enterprises, and promoting transparency and good governance, said a press release.

‘ADB’s PBL promptly responds to Bangladesh’s immediate development financing needs following the political transition. The reforms target improvements in economic management and governance as well as economic diversification and competitiveness,’ said ADB Regional Lead Economist Aminur Rahman.

He said that ADB’s program was developed in close collaboration with the International Monetary Fund, World Bank, and other development partners.

Bangladesh has been struggling with revenue mobilization, as it possesses the lowest tax-to-gross domestic product ratio in the world, at only 7.4 per cent, said ADB press release issued on Wednesday.

This PBL will help Bangladesh introduce key policy actions with the aim of increasing domestic resource mobilization, while improving transparency and accountability, it said.

The program includes digitalization and green initiatives, rationalization of tax incentives and exemptions, and measures to assist taxpayers to boost tax morale.

Improved transparency and efficiency of public investment projects through increased digitalization is another key objective.

The PBL promotes private sector development and foreign direct investment by streamlining regulatory environment and creating a level playing field.

To simplify business creation and operations, over 130 services have been made available in an online integrated platform.

These are complemented by improved governance and performance monitoring of state-owned enterprises and streamlined foreign direct investment approval processes.

The PBL also aims to facilitate policy and institutional reforms to promote a ‘whole of government’ logistics sector reform to reduce the cost of trade and promote export diversification.