M S Siddiqui: In February 2012, The Bangladesh Prime Minister Sheikh Hasina requested the European Union to use its good office for Dr Yunus for the presidency of the World Bank. Hasina said Nobel Laureate Prof Muhammad Yunus is respected all over the world for his outstanding contribution towards alleviating poverty through microcredit activities. She mentioned that the experience of Prof Yunus would be a valuable asset for the World Bank to expand its activities to different countries of the world. But he declined the gesture and said he has no plan as such for the position.
Bangladesh PM called for reforms of the United Nations, World Bank, IMF and other international financial institutions so they could serve the interests of large majorities instead of a privileged few, as said in addressing the 67th UN General Assembly in 2013 at the UN headquarters in New York. According to her, we talk boldly about justice, equality, democracy, freedom, human rights, environment, and adverse impacts of climate change. She said, “I join the vast majority of the UN members in re-emphasizing the urgent need to reform the United Nations, the Bretton Woods institutions and other global financial bodies, as their structure and decision-making process reflect the 60-year-old power equations.”
Before the proposal on reform and leadership of WB, it has given approval to the Padma Bridge product in February 2011; the Bank got evidence of corruption involving senior public officials, and requested that the Government take remedial measures to safeguard project integrity involving appointment of consultant for the project.
The Royal Canadian Mounted Police (RCMP) launch an investigation against SNC-Lavalin, who submitted bid to become consultant to the project upon a WB request around October 2011, Police raided the company’s office, seize all documents from there and arrest former chief executive Pierre Duhaime, Bangladesh-born Canadian citizen Ismail Hossain and Indian-born Canadian citizen Ramesh. Syed Abul Hossain was removed from the communications ministry and given the charge of ICT ministry being replaced by Obaidul Quader. The Bangladesh Anti-corruption Commission (ACC) has said that its investigation found no tangible evidence of corruption in the project and that it did not find any proof of corruption against Abul Hossain. Their insistence to include minister and officials in charge sheet was not a decent act. WB considered the measures taken were not sufficient and in June 2012 decided to terminate the project, resulting in cancellation of the credit.
Subsequently government agreement to comply with the requested measures led the Bank, in September 2012, to consider renewing engagement in the project, provided that the government proceed with a full and fair corruption investigation, subject to the review of an external panel of anti-corruption experts, and that it also agree to modify implementation arrangements to give financiers greater procurement oversight. In December 2012, the external panel reported that the investigation was considered not full and fair because it did not include all suspects and did not implicate officials. In January 2013, just before the expert panel reported that the government did not carry out the full and fair corruption investigation it had promised to. In January 2013, the Government withdrew its request for Bank financing of the project.
Bangladesh is still waiting for substantial evidence of corruption conspiracy in the project but WB could not give any. ACC is now waiting for verdict of Canadian court on the same allegation. The case also proves the sincerity of ACC for investigating the allegation.
There were some media reports regarding allegations made by various quarters that Dr Yunus lobbied the World Bank against funding the Padma Bridge project. But Dr Yunus states that this allegation is completely untrue and without basis. Bangladesh opted to go to construct the bride from own funds and one Chinese company has been awarded work order.
As per Bangladesh country assistance strategy progress report (CASPR) for the year 2011-15 an Independent Evaluation Group (IEG) found that decisions to disengage have affected Bank-client relationships, resulted in losses of knowledge and momentum, and left important development objectives unaddressed. Project implementation suffered, with allegations of corruption in the bridge project prompting the WB to reconsider its approach to governance in the country, to find ways to remain engaged while also taking a more pro-active approach to addressing governance challenges. In response, the WB has decided to change its attitude to correct the deficiencies.
The World Bank might be more cautious in cancelling financing when allegations of corruption surfaces in future after the Padma bridge episode. WB had gone through re-evaluation after debacle in handling the Padma Bridge project. It consider Bangladesh’s overall Country Policy and Institutional Assessment rating fell from 3.5 in 2007 to 3.3 in 2011-12. The rating for public sector management and institutions, which strongly influences International Development Agency’s performance based allocation, was only 2.9 in 2012, below IDA and South Asia averages. Although Bangladesh’s ranking in Transparency International’s Corruption Perception Index rose from the bottom of the list of 159 countries in 2005 to 144 out of 176 countries in 2012, it remains below Nepal and Pakistan.
WB is now applying stronger integrity safeguards to centralized expenditures (where the Bank directly supervises procurement, financial management, compliance, and value-for-money, such as for large-scale infrastructure contracts), including the use of forensic auditing, independent procurement agencies and independent reviews of government processes, to verify compliance and detect corruption where risks are very high. For decentralized expenditures (i.e., small expenditures at local levels involving multiple spending agencies, where the Bank will rely on intermediaries to supervise procurement, financial management, compliance and value-for-money), the WB’s enhanced safeguards may involve better record-keeping; strengthened management information systems; stronger supervision, including geo-mapping, randomized site visits and third-party monitoring; and more effective information disclosure and grievance-handling mechanisms.
At the same time, the Bank will continue to assist the government in building systems to manage its own corruption risks, especially in budget formulation and management, public procurement, audit and parliamentary oversight, banking supervision and payment systems, and local government. The aim of this work is to enable continued Bank engagement, even in challenging integrity environments, and sustained improvement in country governance systems over time.
For Bangladesh, the Bank Group will enhance its focus on being a knowledge provider rather than solely a project financier to respond to Bangladesh’s aspirations to reach Middle Income Country status by 2021. During the upcoming political transition, the Bank Group will aim to inform the debate on Bangladesh’s economic reform agenda, by disseminating its recent work on growth, poverty, trade and competitiveness, through a series of user-friendly policy notes. The WBG recently produced seminal analytical work on Bangladesh-including a growth study, a poverty report, a trade and competitiveness diagnostic, and a report on the costs of adapting to climate change.
WB wishes to remain leading development partner with a large and diverse portfolio and tailored knowledge products to help Bangladesh achieve its goal of middle-income prosperity. Building on Bangladesh’s remarkable achievements to date-in reducing income poverty, improving health outcomes and educational attainment, empowering girls and women, and building the beginnings of a labour intensive export-oriented economy that can support further gains in the near future-the WBG will continue to work with this dynamic and resilient country, to reduce poverty and bring prosperity to all Bangladeshis, particularly the poor.
A section of media and civil society had constant propaganda against corruption in Padma bridge episode advocating the corruption allegation of WB. But WB has rapidly changes policy to face the corruptions in their financed projects.
Bangladesh media and civil society approved everything of WB and it’s ex-Country Director was very popular with a section of media. She proudly claimed that she is very popular in Bangladesh due to ‘discovery’ of corruption. WB can admit mistake and change but can a section of Bangladesh media and civil society change?r
The writer is a legal economist. He may be reached at email@example.com