$111.5m WB credit for strengthening local governance

An agreement was signed to this effect between the government and the WB at a city hotel yesterday.

Christine Wallich, World Bank country director, and Ismail Zabihullah, secretary of the Economic Relations Division (ERD), signed the agreement.

The WB credit will be utilised to implement the 'Local governance support project (LSGP)' aimed at promoting the mandate and responsibility of the Union Parishds (UPs) and enhancing the capability and efficiency of the UP representatives.

The five-year project will start next month.

Under the project, all 4,488 UPs of the country will receive Tk 5,00,000 in block allocation a year, which will be spent on development activities such as construction of roads, bridges and culverts and development of agriculture and fisheries.

In its first year, the project will focus on capacity building in UPs, particularly regarding financial management and procurement. Following the capacity building period, the UPs will receive additional fiscal transfers through the government's block grant system.

In addition to the World Bank credit, in a parallel but coordinated initiative, the United Nations Capital Development Fund (UNCDF), United Nations Development Programme (UNDP) and the European Union (EU) will also contribute US$ 16 million for the 'second generation' pilots.

These pilots will focus on Millennium Development Goals (MDGs) by enhancing UPs' role in service delivery, rural infrastructure development and linking local economy with markets for poverty reduction.

LGRD and Cooperatives Minister Abdul Mannan Bhuiyan was present at the signing ceremony as the chief guest.

He said the government is committed to strengthening local governance by increasing fiscal transfer to Union Parishads, so that they are able to respond to community development priorities.

Christine Wallich said, "The emergence of effective local government could create space for broader political participation and bring with it a chance for greater accountability of the state to citizens."

She also said the project will make the UPs more capable of running their activities.

Local Government Division Secretary SM Jahurul Islam, PPRC chairman Dr Hossain Zillur Rahman and representatives of UP Chairman Association were also present at the ceremony.