Bangladesh: COVID-19 Active Response and Expenditure Support (CARES) Program

approved

This Program is proposed to be supported under the COVID-19 Crisis Recovery Facility (the Facility) of the Bank and co-financed with the Asian Development Bank (ADB) as a policy-based loan under ADB's Countercyclical Support Facility COVID-19 Pandemic Response Option (CPRO). Being a densely populated country with a large number of internal and external migrant workers, Bangladesh is very vulnerable to the spread of COVID-19. The country has already faced significant healthcare challenges in combatting the COVID-19 pandemic. The number of COVID-19 cases in the country has been significantly increasing; as of May 6, 2020, number of confirmed cases are 11,719. On Mar 25, 2020, the Government of Bangladesh (GoB) imposed a lockdown which has been extended till May 30, 2020, and is likely to extend further as this crisis continues to evolve rapidly, and the ultimate fallout is difficult to predict. The pandemic has seriously impacted the country's economy. The extended closure of business establishments and offices as well as other social distancing measures result in simultaneous supply and demand shocks, with production, consumption, trade and investment all at a standstill. The traditional growth engines of the country's economy - export-oriented industries, remittances and small and medium enterprises (SMEs) have all ground to a halt. As a result, the poor and the vulnerable will likely bear the brunt of the impact. Thus, the GoB has undertaken fiscal countercyclical expenditure programs to strengthen healthcare services, and provide direct support for the poor and vulnerable groups and for businesses to protect jobs. The Program is expected to increase GoB's spending on crisis measures with a focus on social and economic protection. The following key outputs are expected: (i) employment opportunities are protected; and (ii) social safety net to vulnerable groups expanded.