Let me start with a little reminder. It was the early nineties and the wave of economic reforms and liberalization was sweeping through the developing countries. My colleague Tapan and I had just returned from completing our higher studies abroad and joined the National Board of Revenue. At that time our economy was insular and fragile. The World Bank wanted Bangladesh to join the campaign for economic reforms and liberalisation. Our senior officers were opposed to reforms and liberalisation. They wanted things to remain as they were. We wanted reforms and liberalization to be implemented. However, we maintained, this should proceed at a rational pace, not overnight, as recommended by the World Bank. We were engaged in regular discussions and debates with the World Bank Mission at that time. But the objective of both sides was to take Bangladesh forward. We will explain to our senior officers the need for reforms and liberalisation.
At that time our head was Finance Minister Saifur Rahman. He used to listen to our ideas and encourage us. We will explain the mission of the World Bank that no reform or liberalization will be possible if we follow their instructions in letter and spirit. If some relaxation is given in some conditions then it can be implemented. In turn, he explained the matter to his superiors at the headquarters. And thus we were able to successfully implement trade liberalization under ‘Industrial Sector Adjustment Credit-2’ and tax sector reforms under ‘Public Resource Management Adjustment Credit’. Also, a Value Added Tax was introduced under these two credit programs and the ‘Extended Structural Integration Facilities’ of the IMF. As a result, the economy gained momentum and the tax revenue-GDP ratio improved.
Meanwhile, the World Bank backed out of its earlier commitment on the Jamuna Multipurpose Bridge project due to the low internal rate of return (IRR). The three of us re-evaluated the feasibility of the project and pointed out that some important elements were missing in the World Bank’s assessment. If these are included, the IRR will increase according to their satisfaction. The World Bank accepted this and returned to finance the bridge. The country’s first major bridge was implemented in the shortest possible time and at the lowest cost.
A few years later, through IDCOL and with the support of the World Bank, we implemented the world’s most successful solar home system initiative under the ‘Rural Electrification and Renewable Energy Development Project’. Under this initiative, about 2 crore people in remote areas of the country were provided with solar power facilities. The success of all the above projects was due to the World Bank’s determination to reform, flexibility in implementation and taking local views and analysis into account.