Bangladesh: Countercyclical Support Facility Support Program, 2011

Abstract

The Countercyclical Support Facility Support Program (CSF) for Bangladesh was intended to help the country cope with the effects of the global crisis by supporting aggregate demand and more spending on social safety net programs (SSNPs) that would give women and vulnerable populations greater access to social services. The program was to be implemented from October 2009 to December 2010. The CSF took effect on 6 November 2009 and the loan of $500 million from the ordinary capital resources of the Asian Development Bank (ADB) was disbursed in a single tranche on 10 November 2009. The loan carried a term of 5 years, including a grace period of 3 years, an interest rate equal to the sum of the London interbank offered rate and 2.0%, and other terms and conditions laid down in the loan agreement. The CSF program was approved together with the Public Expenditure Support Facility Program (PESF) for Bangladesh to make the most of the positive synergy resulting from policy complementarity and funding additionality. This progress report describes macroeconomic developments in Bangladesh from October 2009 to November 2010, and outlines the impact and benefits of the CSF. It reflects the results of reviews made through regular communication between the government and ADB, and the findings of the inception and review missions. The CSF and the PESF shared implementation arrangements, with the Ministry of Finance (MOF) as executing agency, 10 ministry divisions or agencies as implementing agencies, and a program steering committee under the finance secretary, MOF, taking stock of economic and fiscal developments, as well as the progress of the government’s countercyclical development expenditure program.