LDN - Business

European Investment Bank to boost funds for Bangladesh as it weathers political turmoil

[January 10, 2025] By JULHAS ALAM

DHAKA, Bangladesh (AP) — A senior official of the European Investment Bank says the regional lending agency is keen to double its funding for Bangladesh, but she expressed concern over human rights as the country endures a spell of political turmoil.

In an interview with The Associated Press, the bank’s Vice President Nicola Beer said the lending arm of the European Union will support reforms initiated by the interim government headed by Nobel Peace Prize laureate Muhammad Yunus that has been running the country since former Prime Minister Sheikh Hasina was ousted in mass protests in early August.

The 27-nation European Union is the largest destination for Bangladesh’s garment exports, a vital lifeline for millions of the country’s workers that earns the country more than $36 billion a year. The industry employs about 4 million workers, mostly women from rural areas.

Beer said the Luxemburg-based lending agency wants to double its fund portfolio for Bangladesh to 2 billion euros ($2.06 billion) while supporting the South Asian country's democratic transition, rule of law and freedoms of expression.

“Yes, of course, we are focusing on human rights, rule of law and freedom of expression,” she said. “In our discussions we always are very firm on these points that the freedom of expression, freedom of opinion ... are very important, and that this and all the following governments have really to make sure that these human and citizens rights are guaranteed.”

Hasina has been in exile in neighboring India since Aug. 5, when she fled the country. Yunus has promised to hold an election in December of this year or in the first half of 2026, depending on progress in reforms in various sectors.

Yunus is facing criticism over problems with law and order, rising commodity prices, treatment of minority groups and economic woes after many factories were shuttered due to labor protests or poor security. Economic growth fell to only 1.8% percent in the July-September quarter as student-led unrest disrupted business activities, according to a report released earlier this month by the Bureau of Statistics.

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European Investment Bank Vice President Nicola Beer speaks to the Associated Press during an interview in Dhaka, Bangladesh, Thursday, Jan. 9, 2025. (AP Photo/Al-emrun Garjon)

Beer said she appreciated reform measures taken by the Yunus-led government.

“This is important from what I hear, especially from entrepreneurs, is that they are applauding this course of reforms, which is now on the table,” she said. “So, we as a bank (will) try to support because this is important for the economy here in Bangladesh, for investors … coming from outside or inside the country.”

In October, the World Bank slashed its forecast for the fiscal year that will end in June to 4%, citing “significant uncertainties following recent political turmoil.”

The European Investment Bank is involved in some major infrastructure development projects, mainly focused on green energy, safe water, communication and climate change.

Beer visited bank-funded projects and met with officials, including Yunus, during her three-day visit to Bangladesh.

She emphasized the importance of working on integrating the region in such areas as electricity grids that could link to hydropower projects in mountainous Nepal, for example.

“I think we should discuss in the region to get more out of this interconnectivity, because this is a win-win situation, a win situation for Bangladesh, a win situation for the smaller neighbors like Bhutan and also Nepal or Myanmar. And it could be also a win situation for India,” she said.

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