The World Bank will be more cautious in cancelling financing when allegations of corruption surfaces in future after the Padma bridge episode, Finance Minister AMA Muhith said yesterday.
“The WB has now admitted that the cancellation of financing for the Padma bridge project on mere accusations of corruption was wrong. Now, the bank has realised its mistake,” he told reporters after a meeting with WB Country Director Johannes Zutt at the planning ministry.
Muhith said the WB’s acknowledgement that the disengagement from the bridge project was not right has been good for both the multilateral lender and developing countries.
“The bank will be cautious in future in dealing with such cases.”
His comments come a day after The Daily Star reported that the WB has realigned its approach to tackling corruption in projects after it found that in Bangladesh its project implementation has suffered following withdrawal of its $1.2 billion funding commitment for the country’s largest ever infrastructure project.
When evidence of corruption comes to light, its response should not be to disengage, but to engage differently, the bank said in its Country Assistance Strategy Progress Report.
The Independent Evaluation Group of the WB found that decisions to disengage have affected its relationship with clients, resulted in losses of knowledge and momentum and left important development objectives unaddressed.
Meanwhile, Zutt yesterday said the bank should not distance itself from any project after corruption allegations come to light.
“Upon discovery of incidence of corruption in Bangladesh, as in any other country in the world, we should not cease to engage with that country to help it to address its development problems, but we should engage differently.”
“In other words, we should help the government of the country to understand what is driving this type of corrupt practices, to deal with them in a professional way and to create an environment in which the very important development investments that the country needs to make can continue.”
The WB cancelled its financing for the Padma bridge project in June 2012 after corruption allegations were brought up against some public servants.
Although talks had revived, Bangladesh ultimately withdrew its request for funds in January 2013, just before the expert panel of the WB reported that the government did not carry out a full and fair corruption investigation that it had promised.