Bangladesh's government is engaged in an increasingly tough war of words with the World Bank. Last month, the lender cancelled funding for a high-profile bridge project, citing evidence of high-level corruption. The Bangladeshi authorities have chosen not to take the rebuke quietly. Via today's Guardian:
Ministers have sought to contain the damage from the highly embarrassing accusations of corruption made by the World Bank, portraying the row with the lender as a matter of "national honour", and calling on the World Bank not to punish the people of Bangladesh.
In a speech in parliament on 8 July, [Prime Minister] Hasina appealed to nationalist sentiment by invoking memories of the 1971 war of liberation. "They want us to beg. They want us to continue as guinea pigs," she said. "We will go ahead with this project using our own resources."
Hasina's government has laid out ambitious plans to mobilise resources, including levying surcharges and issuing sovereign bonds worth at least $750m (£480m). The prime minister said she had already told different ministries to slash development projects and divert the money to fund the $2.9bn Padma multipurpose bridge – a key election pledge.
As the article points out, this strategy carries risks for the government. External lenders could be available, but they would likely charge much more than the Bank. If it diverts its own scarce resources away from other projects, the government may face domestic consequences.
The confrontation could be consequential for the Bank as well, which has ramped up its efforts to combat corruption in recent years. Bangladesh is no bit player for the institution; last year, it was the largest recipient of loans through the Bank's International Development Association, dedicated to lending to low-income countries. If Bangladesh is able to finance the project without Bank support, that may create an important precedent for other low-income borrowers, many of whom chafe at the Bank's instrusive conditions and monitoring.
David Bosco reports on the new world order for The Multilateralist.