WB VP stresses need for boosting private sector, FDI in Bangladesh

The newly appointed World Bank Vice President for South Asia, Johannes Zutt, has observed that Bangladesh’s private sector is lagging behind and emphasised the need for intensified efforts to revitalise it.

He also called for proactive steps to increase foreign direct investment (FDI) in the country.

Zutt made the remarks during a bilateral meeting on Thursday with Dr Salehuddin Ahmed, Economic Adviser to the caretaker government, at the Secretariat. Following the meeting, the adviser briefed the media.

During the discussion, the World Bank Vice President assured Bangladesh of continued support in all necessary areas. He also noted that the International Finance Corporation (IFC), a World Bank Group entity, will enhance its engagement with the private sector.

Dr Ahmed said that the World Bank has recently undergone internal changes and that Zutt is visiting Dhaka in his new role to reaffirm the organisation’s commitment to Bangladesh. He particularly expressed optimism about the continuation of budgetary support.

Zutt reportedly expressed satisfaction with Bangladesh's economic recovery, noting that the country has made considerable progress since facing serious financial challenges a year ago. “This is a significant achievement for the financial sector,” he said.

He highlighted that the IFC is already providing regular support of USD 500 million and an additional USD 1.5 billion in trade finance. The IFC also plans to invest in local currency bonds.

Furthermore, the IFC will provide targeted support to the IT sector, including an initial assistance package of up to USD 25 million and additional funding for rooftop solar projects.

The economic adviser also confirmed that reforms were discussed during the meeting. “We informed them that the Bangladesh Bank has initiated the process of banking sector restructuring. The National Board of Revenue (NBR) is in the process of becoming an independent entity. It will take some more time, but we aim to complete the separation by December,” he said.

Discussions also covered the development of new ports, including the proposed Laldia Port.

Dr Ahmed added, “The NBR has already been divided into two segments, and by December, separate operations will be fully functional. Two departments under the Finance Ministry will then work independently. A committee is currently working on this and will submit a report after consultations. Based on that, we will proceed further.”

In response to a question about the US tariff issue, he stated, “It’s too early to make a definitive comment. A Bangladeshi delegation led by the Trade Adviser will visit soon and determine which areas require negotiation. On our part, the Ministry of Finance will address tax policy, while other ministries will handle related issues. The next steps will be determined collectively.”

Present at the meeting were Jean-Pascal Nganou, World Bank Country Director for Bangladesh and Bhutan; Martin Holtmann, IFC Country Manager; and World Bank Chief Economist for South Asia, Sulemane Coulibaly. Shahriar Kader Siddiky, Secretary of the Economic Relations Division, also attended.

As part of his four-day official visit, Johannes Zutt is scheduled to meet with the Chief Adviser of the caretaker government, the Governor of Bangladesh Bank, senior government officials, and representatives from the private sector.