The refund system set up to allow companies to recover illegally collected tariffs from ​the US government went live yesterday (20 April) as thousands of companies rushed to file claims.

"So far, so good" - though the system is a little glitchy, said ‌Jay Foreman, CEO of toymaker Basic Fun, which had a team in its "war room" at its headquarters in Boca Raton, Florida, ready to start filing when the system went live at 8am US Eastern time (1300 GMT).

Foreman said the system didn't crash as some had feared it might under the onslaught of attempted submissions, but rather would sometimes not allow an upload and force them to retry. The company has over 500 files it ​needs to upload to the system, although the system permits these to be uploaded in batches.

"However, if you load too many or the system is too busy, it ​will kick them back," Foreman said in an email about how the process was working in the early moments. "We've got over 50% of ⁠our invoices loaded so far. We are hoping in the next few hours to have them all loaded. I'm very happy we got this process started early."

Companies contacted by Reuters in recent ​days expressed concerns about the durability of the new system, created by US Customs and Border Protection in response to a court order that it prepare to return up to $166 billion to importers.

"I'm ​relieved that the portal seems to be functioning properly," said Cassie Abel, CEO of Idaho-based outerwear company Wild Rye. Abel had her customs broker make the submission, which she said cost her $250 for the first phase of the filing.

The US Supreme Court in February struck down the tariffs President Donald Trump pursued under a law meant for use in national emergencies, handing the Republican president a stinging defeat.

In court filings, Customs officials said as ​of 9 April, some 56,497 importers had completed the necessary steps to receive electronic refunds, an amount totalling $127 billion, or more than three-quarters of the total eligible to be refunded. More ​than 330,000 importers paid the tariffs at issue on 53 million shipments of imported goods.

It's a European first for city streets and could lead to more near-autonomous vehicles on the continent.

It is unclear whether getting a refund claim into the portal as soon as possible will impact how quickly it's processed, ‌but many ⁠companies decided not to take the risk of waiting.

A CBP spokesman said on Friday they created a system that will "efficiently process refunds, pursuant to court order, for importers and brokers who paid" the duties.

Long battle over tariffs

Rick Woldenberg, CEO of educational toy maker Learning Resources, said he had heard some users experienced temporary crashes, but he wasn't among them. "I think it was sort of like everyone was lined up to get Taylor Swift tickets - they all hit the button at once," Woldenberg said.

Learning Resources, one of the plaintiffs in the lawsuit that led to the tariffs' undoing, ​is seeking some $10 million in refunds. The company ​has filed about 5,000 entries, and so ⁠far, the vast majority have been accepted.

Woldenberg voiced some frustration at having to file for reimbursement at all, saying: "They have a ruling from the Supreme Court that says they over-collected taxes, so why do I have to tell them to send it back?"

Still, he said he was ​impressed with how smoothly the system has run so far.

"The policies set at the top have nothing to do with the professionals who ​work in CBP, and those ⁠folks have done a good and earnest job," said Woldenberg.

Lynlee Brown, global trade partner at EY, said the firm's clients have largely seen the system accept most submissions without problem but that the first phase of submissions included easier ones that are less complex.

Brown said that once the entries are accepted by the system, they are then sent to a mass-processing phase that is supposed to automate ⁠the payment of ​refunds within 60 to 90 days. "If an origin comes up that looks fishy," she said, "that will probably go ​to a human for review."

This is the latest twist in a drawn-out battle over emergency tariffs collected over the past year as Trump seeks to restructure US trade relations. The constantly shifting tariffs roiled global business as companies rushed to ​move supply chains to avoid them as well as figure out who would ultimately pay the taxes.

The recent diesel price hike has made service providers increase charges for harvesting the largest rice crop, Boro, irrigating farmlands, and threshing the cash crop maize-- and farmers are struggling to cope.

Costs soared because of a 15 percent hike in the price of diesel, a key fuel used by nearly 15 lakh shallow tube well pumps to water the Boro fields.

Farmers in four haor districts of Sylhet also depend on nearly 1,500 combine harvesters -- run on diesel -- for bringing their crops home.

The government increased fuel prices on April 19 to cut subsidy payment pressure on the state coffers in the wake of increased import costs.

It coincides with a time when farmers have started harvesting Boro paddy, particularly in the Sylhet region, where a majority of the paddy fields require irrigation.

“Now machines are needed for harvesting and threshing paddy and shelling maize-- everything. With diesel price rising, all costs have gone up,” said Mozammel Haque, a farmer in Aditmari upazila of Lalmonirhat.

The 65-year-old farmer cultivated Boro paddy on 12 bighas and maize on 10 bighas this season. He harvested a portion of the ripened paddy using a diesel-powered harvester machine on Monday.

This year, he has to pay Tk 850 to Tk 900 to harvest the crop per bigha, up from Tk 750 to Tk 800 per bigha in the previous year.

“I am worried whether I would be able to recover my costs after selling the crops.”

In Sylhet, where Boro paddy is harvested early, thousands of farmers rely on combine harvesters for faster harvesting. But the cost of renting a combine harvester has doubled in some areas in the Haor.

The rate of harvesting paddy on one acre of farmland has jumped to Tk 7,500 this season, up from Tk 4,500 to Tk 5,000 in the previous Boro season.

Selim Raza Chowdhury, a farmer from Razapur Union in Sunamganj’s Dharmapasha upazila, said he offered up to Tk 12,000 to harvest one acre of his Boro paddy, and still could not manage to rent a combine harvester.

“With excessive rates and lower paddy prices in the market, it is becoming impossible for us to cover the harvesting and processing expenses,” he said.

Shahibur Rahman, a 55-year-old farmer in Rangpur sadar upazila, said the rent of harvesters and maize threshers increased within a single day of the diesel price hike.

While it costs an additional Tk 250 to Tk 300 per bigha to harvest paddy, for maize the hike is higher-- Tk 400 to Tk 450.

Sirajul Islam, a harvester operator in Aditmari upazila of Lalmonirhat, said about two litres of diesel are required to harvest paddy on one bigha of land.

“Even after standing in line at the pump, fuel is not available. Diesel price has also increased. We were compelled to raise the machine rent,” he said.

“In a few more days, when the full season of rice and maize harvesting begins, pressure will increase further.”

Maize thresher operator Rafiqul Islam from Kurigram, another northern district, has started charging Tk 200 to Tk 300 more than last year.

More than four litres of fuel are needed to thresh maize grown on one bigha of land, he said.

“Diesel price has gone up. There are labour costs too. This is also resulting in arguments with farmers.”

Farmer Ranju Mia of Kharjani Char in Gaibandha sadar upazila cultivated maize on 12 bighas of land, investing Tk 250,000.

Due to fertiliser and fuel shortages, the yield has been poor this year. Again, because of the sudden rise in fuel prices, threshing and transportation costs have increased, he said, fearing losses.

“There is no electricity in the char area, and the soil does not retain water. Frequent irrigation is needed. The amount of paddy we will get will not even cover the expenses,” said Ruhul Amin, another grower from Rasulpur Char in the Fulchhari upazila.

The government has simplified the industrial gas distribution system, allowing factories to rearrange equipment and transfer unused gas load with fewer approvals, in a move expected to boost productivity and reduce costs.

The Power, Energy and Mineral Resources Division issued a circular today (20 April) outlining the revised guidelines aimed at easing operational bottlenecks for industrial users.

Business leaders welcomed the initiative, saying the reforms would streamline operations, particularly for energy-intensive sectors such as textiles.

According to the circular, industrial units will be allowed to rearrange or replace gas equipment while keeping the approved hourly load unchanged. The commissioning work must be carried out by a contractor enlisted with the relevant gas company, but prior permission from the gas distribution company will no longer be required.

The circular also allows the transfer of unused gas load between industrial units located within the same premises and under the same ownership, subject to approval from the managing director or regional head of the respective gas distribution company. Previously, such transfers required approval from the head office board, often resulting in lengthy delays.

In addition, gas load allocated under the captive power category can now be transferred to the industrial category within the same premises and ownership, if required.

The directive further states that gas distribution and marketing companies must install meters within seven days, after which the quality of installation must be verified.

Textile mills are among the largest consumers of industrial gas in the country, making the sector particularly affected by the new measures.

The Bangladesh Textile Mills Association (BTMA) welcomed the decision, saying it would help improve operational efficiency.

In a statement issued today (20 April), the association said reforms in the energy sector would contribute significantly to increasing productivity, reducing costs and improving energy management in the country's textile and apparel industries.

The government is facing mounting financial pressure as revenue collection continues to fall short of expectations, widening the budget deficit.

Instalments of loans from the International Monetary Fund (IMF) are also being delayed due to unmet conditions, leaving the state with limited fiscal space for expenditure.

As a result, the government is increasingly relying on borrowing. It has already taken a record amount of loans from the banking sector and has sought more than $3.25 billion in fresh loans from development partners. Meanwhile, soaring global fuel prices have reduced the government’s ability to sell fuel domestically at subsidised rates, forcing it to raise prices in the local market.

Despite weak revenue inflows, the government is preparing an ambitious budget for the upcoming fiscal year. Expenditure, however, remains unavoidable, with debt servicing obligations—both domestic and foreign—continuing to rise. Data suggests the government is now operating under constraints comparable to a financially stretched middle-income household.

According to the National Board of Revenue (NBR), the revenue shortfall for the first eight months of the current fiscal year stood at Tk71,472 crore. Against a target of Tk325,802 crore, only Tk254,330 crore has been collected—around 22 per cent below target. Although nearly Tk300,000 crore needs to be collected in the remaining four months to meet the goal, the reality appears far from achievable. Monthly collections have not exceeded Tk40,000 crore so far, while more than Tk75,000 crore per month would be required to meet the target.

All three major revenue heads—income tax, VAT and import duties—have underperformed, with a particularly large gap in income tax collection. A significant number of taxpayers remain outside the tax net. Of approximately 12.8 million Taxpayer Identification Number (TIN) holders, only 4.6 million have filed returns, highlighting structural weaknesses in the tax system. Lower import duty collection and sluggish business and development activities have also contributed to reduced VAT receipts.

Despite declining income, government expenditure remains high, covering salaries and allowances for public employees, infrastructure development and other sectors—even after austerity measures. With revenue underperforming, the government has been compelled to borrow heavily from the banking system.

Data from Bangladesh Bank shows that government borrowing from banks has surged to nearly Tk109,000 crore in just nine months of the fiscal year, already exceeding the annual target. Around Tk56,000 crore was borrowed between January and March alone. Analysts warn that continued reliance on bank borrowing could crowd out private sector credit, dampening investment and employment, and ultimately slowing GDP growth.

External borrowing is also on the rise. According to the Economic Relations Division (ERD), Bangladesh’s total foreign debt now exceeds Tk23,00000 crore. Even so, the government has sought an additional $3 billion from development partners.

Repayment obligations remain pressing. Sources indicate that Bangladesh will need to repay around $26 billion in external debt over the next five years—significantly higher than in previous periods.

Although the government secured a $4.75 billion loan from the IMF, further disbursements are uncertain due to unmet conditions. During recent talks in Washington, the IMF did not guarantee the release of the next tranche, increasing risks to budget implementation.

In this context, the government has moved to adjust fuel prices. While it has repeatedly stated that prices would not be increased for now, rising global costs have made it difficult to continue selling fuel at lower domestic rates without incurring substantial losses. Pressure from the IMF to reduce such subsidies has also played a role. The price hike may offer some fiscal relief but could also fuel inflation, economists warn, creating further economic challenges.

The government is now planning a budget exceeding Tk925,000 crore for the 2026–27 fiscal year. The larger outlay reflects commitments to election pledges, expansion of social safety net programmes, a new pay structure and increased subsidies. However, with revenue growth lagging, the budget deficit could approach 5 per cent of GDP—raising concerns about macroeconomic stability.

A growing share of expenditure is being absorbed by interest payments and subsidies. Around Tk122,000 crore has been allocated for interest payments in the current fiscal year, a figure expected to rise further. Subsidy requirements, particularly in the energy sector, are also increasing due to global price trends, alongside rising development expenditure.

Business leaders and economists caution that without appropriate policy measures, Bangladesh risks falling into a debt trap. They stress the need to boost revenue collection, modernise the tax system, curb tax evasion and create a more investment-friendly environment. They also emphasise careful selection of development projects and prioritisation of spending.

President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Mohammad Hatem, warned that excessive bank borrowing could ultimately harm the economy, adding that repaying such large debts could become a major challenge for the government.

Distinguished Fellow of the Centre for Policy Dialogue (CPD), Dr Mustafizur Rahman, said avoiding a debt trap should be the government’s primary objective. “While borrowing may be necessary under current circumstances, the focus must be on resource mobilisation and increasing revenue,” he noted.

Former Lead Economist of the World Bank’s Dhaka office, Dr Zahid Hussain, observed that although demand for long-term, low-interest loans is rising, borrowing alone cannot resolve the situation. He stressed the need for a clear assessment of macroeconomic pressures, including the balance of payments. Rising import costs, declining export earnings and risks to remittance inflows are adding to the strain, alongside growing fiscal deficits and subsidy burdens. Addressing these challenges, he said, will require coordinated crisis management, continued reforms and strong support from development partners.

Source: Kaler Kantho

The owners of 21 private inland container depots (ICDs) have announced an 8.5 percent increase in various container handling charges, effective from April 19.

Operators of lighter vessels transporting imported cargoes from Chattogram port’s outer anchorage to different destinations on inland water routes will meet with government authorities on April 22 to discuss freight adjustments.

The Bangladesh Inland Container Depots Association (BICDA), in a circular issued on Sunday, announced the increase in six types of container handling charges at ICDs by 8.5 percent following a 15 percent rise in diesel prices, from Tk 100 to Tk 115 per litre.

The charges include empty container transportation between Chattogram port and ICD, empty container transportation between Patenga Container Terminal and ICD, empty container lift-on or lift-off, export goods stuffing package, export loaded container verified gross mass and import goods delivery package.

There are 21 privately owned ICDs located in and around the port city. Almost 93 percent of export-loaded containers are handled by ICDs before shipment through Chattogram port.

BICDA Secretary General Md Ruhul Amin Sikder said prime movers and all container handling equipment at ICDs run on diesel, with ICDs requiring over 70,000 litres of diesel per day.

“Following the diesel price hike and subsequent cost increase, there is no alternative to adjusting charges in order to maintain smooth operational activities,” Sikder said.

Currently, ICDs charge on average Tk 2,046 for each empty container transported between the port and ICDs, while the export goods stuffing package charge stands at around Tk 7,424 per 20-foot container and Tk 9,900 per 40-foot container.

Sikder noted that charges vary as ICDs individually fix rates through negotiation with clients.

Khairul Alam Suzan, former vice president of the Bangladesh Freight Forwarders Association (BAFFA), said ICDs had already increased their charges by 20 percent only four months ago.

He pointed out that Chittagong Port Authority (CPA) increased its tariffs by over 41 percent since December, adding that the cost of import and export businesses would sharply rise with the fresh hike in ICD charges.

Officials from different shipping agents opined that the newly revised ICD tariffs would adversely impact trade.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Director SM Abu Tayyab expressed resentment over BICDA’s unilateral decision to raise tariffs without consulting stakeholders.

Tayyab said a government coordination committee needs to discuss the issue with stakeholders to assess the actual impact of the fuel price hike on ICD operations before any adjustment in charges.

He added that following recent hikes in port tariffs, ICD tariffs, and freight increases by shipping lines, the fresh hike by ICDs would badly hurt the already struggling readymade garment sector.

Meanwhile, the Director General of the Department of Shipping will meet with stakeholders in Dhaka on Wednesday to discuss adjusting lighter vessel freights due to the diesel price hike.

Bangladesh Water Transport Coordination Cell Convener Shafiq Ahmed said a lighter vessel requires on average 3,500 litres of diesel for a round trip from Chattogram to Dhaka.

Currently, freight for transporting cement clinker in a lighter vessel from Chattogram to Dhaka stands at Tk 550 per tonne, he said.

The positive trend in remittance inflows has continued into April, with Bangladeshi expatriates living in different countries sending US$2.12 billion in the first 19 days of April, according to the latest data from Bangladesh Bank.Bangladesh economic indicators

This marks a significant surge compared to the same period last year, when inflows stood at $1.71 billion. This year’s figures show an increase of $408 million.

Central bank sources noted that this momentum follows a record-breaking performance in March 2026, which saw the highest single-month remittance inflow in the country’s history. In March, expatriates sent a staggering $3.75 billion.

Previous record highs include $3.29 billion in March 2025, $3.22 billion in December 2025, and $3.17 billion in January 2026.

Analysts attribute the surge in part to ongoing tensions and instability in the Middle East, which have affected global foreign exchange markets. The crisis has increased demand for the US dollar internationally, leading to a rise in the dollar’s exchange rate against the local currency. Consequently, expatriates are receiving a higher value in Taka for every dollar sent home.

While the high inflow provides a boost to the economy, economists warn that a prolonged Middle East crisis could pose risks to Bangladesh, similar to other global economies. Experts have advised the government to focus on maintaining a robust foreign exchange reserve to mitigate potential future shocks.

Unilever Consumer Care reported that its revenue dropped by 8% in the first quarter of this year.

According to the financial statement for the January-March period of 2026, the health drinks like Horlicks producer posted a revenue of Tk87.44 crore, which was Tk95.40 crore during the same quarter a year ago.

Following the revenue decline, its net profit also dropped by 12% year-on-year to Tk12.11 crore in the first quarter.

At the end of March, its earnings per share stood at Tk6.29, which was Tk7.13 a year ago.

In alignment with the BNP government's election manifesto, the finance ministry will prioritise 12 sectors in the upcoming FY2026-27 budget, including ensuring advanced education and healthcare, job creation, and food and energy security.

The Finance Division has instructed various ministries to submit their budget estimates for the next fiscal year and projections for the following two fiscal years to the finance ministry by 30 April, keeping these priorities in mind.

A circular issued today (20 April) emphasised prioritising human resource development, social protection, women and child development, poverty alleviation, the expansion of creative economic activities, tackling climate change, and bringing dynamism to economic development.

The first budget of the BNP government is likely to be announced on 11 June.

The estimated budget size is Tk9.30 lakh crore, which includes Tk3 lakh crore for development expenditure and Tk6.30 lakh crore for operating expenditure.

Pioneer Insurance PLC posted a 25% year-on-year growth in net profit in the first quarter of 2026, driven largely by a sharp cut in management expenses, even as its premium income declined significantly.

According to the company's financial statements for the January–March period, net profit after tax rose to Tk16.59 crore, up from the same period last year. Earnings per share (EPS) also increased to Tk1.70, compared to Tk1.36 a year earlier.

However, the insurer's premium income dropped by 19% to Tk77.72 crore during the quarter, reflecting a broader slowdown in the general insurance sector.

The profit growth was mainly supported by a 45% reduction in management expenses, which fell to Tk16.37 crore. The decline followed a regulatory move by the Insurance Development and Regulatory Authority (IDRA) to cancel agent commissions for non-life insurers, easing operational costs.

Despite the improved bottom line, the company faced rising claims, which surged by 64% year-on-year to Tk12.11 crore during the quarter.

Commenting on the performance, Syed Shahriyar Ahsan, chief executive officer of Pioneer Insurance, said the industry is currently navigating a challenging environment.

"The cancellation of agent commissions has significantly reduced business volumes that were previously driven by agents," he told The Business Standard.

He added that a slowdown in private sector exports and imports, coupled with geopolitical tensions in the Middle East, has further impacted the sector.

According to Ahsan, the general insurance industry experienced a combined premium income decline of Tk221 crore in the first two months of 2026, reflecting sluggish economic activity and the absence of agent incentives.

He also raised concerns over pricing practices among smaller insurers, alleging that some companies are undercutting premiums to secure business. "This creates an uneven playing field for companies that maintain standard pricing and transparency," he said, urging regulators to address the issue.

To stabilise the sector, he suggested reintroducing mandatory motor insurance, citing rising road accidents and the need to expand coverage while improving industry transparency.

Despite the quarterly profit growth, investor sentiment remained cautious. Pioneer Insurance shares declined by 1.13% to close at Tk61.30 on the Dhaka Stock Exchange on Monday.

For the year ended 31 December 2025, the company reported an EPS of Tk4.57 and a net asset value per share of Tk46.97. Based on this performance, its board has recommended a 25% cash dividend alongside a 5% stock dividend, subject to regulatory approval.

The company's annual general meeting is scheduled to be held on 4 May through a digital platform.

Shahjibazar Power Co Ltd, a concern of Youth Group, has reported a staggering 138% growth in its consolidated net profit during the first nine months of the 2025-26 fiscal year, driven by higher operational efficiency and strong contributions from its associate companies.

According to the company's price-sensitive disclosure released on Monday following its board meeting, consolidated net profit reached Tk81.53 crore for the July-March period, while the consolidated earnings per share (EPS) surged to Tk4.37 from the previous year's levels.

This growth was supported by a 15% increase in total consolidated revenue, which climbed to Tk1,055 crore.

The company's performance was even more robust in the third quarter alone, spanning January to March, where consolidated net profit skyrocketed by 254% to settle at Tk24.71 crore.

During these three months, consolidated revenue grew by 13% to Tk331.31 crore, yielding an EPS of Tk1.32.

The company attributed this stellar numerical performance primarily to a substantial increase in its plant factor, which rose to 77% during this period compared to just 55% in the corresponding period of the previous year.

Beyond its core operations, Shahjibazar Power benefited significantly from its diversified investment portfolio.

A senior company official noted that the firm's bottom line was bolstered by substantial earnings from its two associate companies – Midland East Power and Midland Power Company.

Additionally, the company's subsidiary, Petromax Refinery Limited, showed a healthy recovery, with its revenue jumping by 6% to Tk721.32 crore during the nine-month period.

The parent company, Shahjibazar Power, also displayed remarkable standalone strength as its revenue grew by 41% to reach Tk333.71 crore.

On Monday, Shahjibazar Power shares ended 2.12% higher at Tk53.10 at the Dhaka Stock Exchange.

Following a lack of consensus on several conditions during recent talks with the International Monetary Fund in Washington, Finance Minister Amir Khosru Mahmud Chowdhury is set to seek Prime Minister Tarique Rahman's guidance on the matter, according to ministry sources.

Sources in the finance ministry said the minister is expected to meet the PM this week, along with members of the delegation who attended the IMF meetings, to brief him on the discussions and decide the next course of action.

Further engagement with the IMF is likely to depend on that guidance.

A senior finance ministry official, speaking on condition of anonymity, told The Business Standard that the IMF has outlined its position on three major issues that Bangladesh is expected to implement from the next fiscal year: eliminating all forms of tax exemptions, withdrawing government subsidies, and allowing the exchange rate to become fully market-based.

While these conditions featured in negotiations with previous administrations, the IMF is now pressing the BNP government for a concrete implementation plan.

"There is a direct relationship between implementing these measures and an increase in consumer expenses. Therefore, decisions on these issues will have to come from the highest political level of the government," the official said.

"If tax exemptions are removed as per the conditions, the tax burden will fall on consumers, increasing costs and potentially fuelling inflation. Similarly, withdrawing subsidies will raise the prices of goods, further increasing expenses," the official added.

Sources at the NBR said its chairman, Abdur Rahman Khan, who attended the IMF meetings in Washington, held a meeting on Sunday (19 April) with senior officials to review the outcomes and explore ways to reduce tax exemptions and boost revenue collection.

According to the latest data published by the NBR for FY2022-23, the revenue board collected Tk3.25 lakh crore while granting tax exemptions worth approximately Tk2.75 lakh crore – nearly 85% of the total collection.

Meanwhile, in the current fiscal year (FY26), government spending on subsidies, incentives and cash support is estimated at Tk1.12 lakh crore.

Concerns over implementation

Given the prevailing economic landscape, economists argue that the new administration will find it challenging to overhaul all tax exemptions and subsidies, urging the government to adopt a more pragmatic approach.

Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), told TBS that the government needs to strike a balance.

"The government must increase revenue. However, it will be difficult to eliminate all exemptions at once. A realistic decision should be reached through discussions," he said.

"Tax exemptions exist not only in Bangladesh but also in other countries. These exemptions need to be rationalised. If all are removed at the IMF's insistence, it may create distrust among investors who have made investments based on government commitments," he added.

He suggested negotiating a two- to three-year timeline with the IMF. "Failure to reach an understanding with the IMF would send a negative signal. It may become difficult to secure loans from other development partners," Mustafizur added.

An NBR official told TBS that if IMF conditions are implemented, many existing exemptions would no longer be allowed. This could lead to the imposition of VAT on essential services such as agriculture, food, education and healthcare, raising costs for consumers.

Another senior NBR official warned that removing exemptions would bring several key sectors under the tax net, adding that even remittances could potentially be taxed.

Gradual reduction underway

Over the last three years, the NBR has been implementing a phased plan to curb tax exemptions, retaining them only for essential sectors and consumer-facing goods while introducing sunset clauses to ensure other incentives expire within a set timeframe.

In income tax, rates have been increased in sectors such as poultry and fisheries, effectively reducing exemptions.

Tax incentives for local manufacturing of products such as electronics, home appliances, mobile phones and semiconductors are also being gradually phased out, with timelines for full withdrawal outlined in last year's budget.

The standard VAT rate currently stands at 15%, and any lower rate applied to a sector is treated as a tax exemption.

To support export competitiveness, exporters benefit from reduced tax rates. They are exempt from import duties on raw materials and do not pay VAT on locally sourced inputs. Export-oriented firms are subject to a corporate tax rate of 12%, compared with 27% for non-listed companies.

The government raised fuel oil prices Saturday midnight to rein in mounting subsidies. The adjustment has had an immediate knock-on effect on transport fares and commodity prices, reflecting Bangladesh's heavy reliance on diesel-powered logistics.

The key question, however, is whether these cost increases are proportionate to the fuel price hike or significantly inflated. Take freight rates as an example. The cost of hiring a covered van from Dhaka to Chattogram jumped 30-40% to Tk20,000-Tk25,000 on Monday, up from Tk14,000-Tk15,000 on Friday.

Pickup fares from Bogura and Jashore have also risen from Tk12,000 to Tk15,500. This is despite diesel prices rising by around 15% to Tk115 per litre.

A typical truck or covered van consumes roughly 80-100 litres of diesel on the Dhaka-Chattogram route. Even at the higher end, the fuel cost increase would be about Tk1,500 per trip. In practice, however, freight charges have gone up by Tk6,000-Tk10,000.

"There is a shortage of vehicles due to fuel constraints. Those still operating are losing time refuelling, often stopping at multiple filling stations," said Syed Md Bakhtiar, executive president of the Bangladesh Truck and Covered Van Owners' Association.

In Dhaka's wholesale hubs, these inflated overheads have translated into immediate hikes for daily staples, leaving low- and middle-income households to tighten their belts. Egg prices, for instance, have risen by Tk2-Tk2.5 per piece, due to higher transport costs.

But the actual impact of the fuel hike should be no more than 20 paisa per egg, according to Mohammad Halim, a wholesale trader at Moghbazar.

Rice prices have increased by Tk4 to Tk6 per kg over the past week. Miniket rice is now selling at Tk82 to Tk85 per kg, up from Tk78, while Najirshail has risen to Tk88 to Tk94 per kg. Local lentils have increased by Tk10 per kg, now selling at Tk150 to Tk160.

Edible oil and sugar prices have also climbed. Loose soybean oil is selling at Tk170 to Tk175 per litre, while sugar has risen to Tk135 to Tk145 per kg amid supply shortages.

Vegetable prices have climbed across the board, particularly for items sourced from outside Dhaka. Brinjal now sells at Tk100-Tk120 per kg, while most other vegetables, including gourds, beans and leafy varieties, have moved into the Tk70-Tk120 per kg range. Even staple items like tomatoes, carrots, onions and cabbage have edged higher, tightening household budgets.

Spice prices have risen more sharply in comparison, with cardamom seeing the steepest jump, nearly doubling to Tk4,500–Tk6,099 per kg. Cumin, cinnamon, cloves and bay leaf have also recorded steady increases, adding sustained pressure on kitchen costs.

While poultry has remained a relative silver lining – with Sonali chicken at Tk360 to Tk380 and broiler chicken at Tk170 to Tk180 per kg – the fish market has seen a broad increase of Tk40 to Tk50 per kg.

Large tilapia is now selling at Tk300 per kg, rohu at Tk450, and pangash at Tk200, while the prized hilsa is fetching between Tk2,200 and Tk3,000 per kg.

Beyond transport, wholesalers like Khalek Uddin at Moulvibazar say that higher energy prices are driving up cold storage and packaging costs, further narrowing the margins.

At Karwan Bazar, trader Nurul Islam noted that the relentless rise in procurement costs has left merchants with little choice but to pass the buck to consumers, who now face an increasingly difficult battle to manage basic food expenses.

Once upon a time, banks in Bangladesh were regarded as highly reliable financial institutions. Any walk-in customer could open an account at a nearby branch and deposit their money without much concern for risk, as the perceived risk was virtually zero.

Financial Institutions (FIs), however, were considered less trustworthy. Only individuals with personal connections to FI officials or those familiar with their operational framework and oversight by the central bank, Bangladesh Bank, were willing to place funds there—mainly to earn higher returns than banks offered.

Public confidence in FIs deteriorated following the collapse of several institutions over the past decade. Although banks continued operations during this period, the acute liquidity crisis of Farmers Bank Ltd. in 2017 significantly undermined public trust in the banking sector.

This incident compelled people to reconsider the safety of keeping their savings in banks, intensifying concerns over the sector’s credibility and stability. Nevertheless, depositors did not withdraw their money en masse. Many banks, however, have since experienced prolonged financial distress and face substantial challenges in managing operational funds.

The required regulatory measures in 2024–25 constrained fund inflows, slowing deposit growth and, in some cases, increasing withdrawals, leading to a major setback for the sector and further erosion of public confidence.

Numerous factors contribute to vulnerabilities in the banking sector, most of which fall under the broad umbrella of corporate governance failure. Corporate governance encompasses institutional structure, internal systems, policies, implementation mechanisms, oversight processes, internal controls, audit functions, and consistent reporting to Boards and regulators.

While structural frameworks often align with global standards, deficiencies persist in implementation and oversight. Weaknesses in monitoring, execution of responsibilities by management and Boards, and ineffective audit functions—including internal audit—reflect a gap between formal compliance and the competence required for robust governance.

Senior management and boards should ensure strict compliance with policies across all stages of credit and investment operations:

(a) initial screening, including checkpoints such as the coachability of owners, legal compliance, financial performance, and sectoral outlook;

(b) rigorous due diligence covering financial and marketing performance, legal compliance, risk assessment, and management frameworks, concluding with structured investment decisions addressing repayment terms, security coverage, and monitoring as per agreement and covenant clauses;

(c) ongoing monitoring of borrowers’ operations and financial performance, ensuring adherence to agreements;

(d) effective functioning of Internal Control and Compliance Departments and Audit Committees; and

(e) implementation of early alert systems to identify and mitigate emerging risks.

Management must adhere strictly to these policies, while Boards should review implementation through regular reports and provide guidance, exercising oversight without interference, including political influence. Such processes were grossly neglected in vulnerable banks.

In practice, these policies were often only on paper, with many investments pre-decided due to personal connections or political influence (“name-lending”). Investment memos were sometimes based on illegal or non-compliant financial statements, with insufficient knowledge of the legally acceptable requirements under the Companies Act 1994.

Banks failing to comply with rigorous policies accumulated poor-quality loan portfolios and generated misleading reports that obscured asset classifications, creating persistent warning signals. The undue flexibility of Boards and regulators, instead of enforcing early corrective measures, contributed to recurring weaknesses, ultimately bringing banks to the brink of collapse.

All distressed banks should undergo independent compliance audits to identify wrongdoing and strengthen governance.

To restore public trust, they must ensure adequate capitalization, timely depositor repayment, prudent lending, regulatory compliance, transparent reporting, robust risk management, strong internal controls, and accountable, ethical leadership with effective oversight by Boards, audit committees, and regulators.

The writer is a fellow member of ICAB and partner at Basu Banerjee Nath & Co., Chartered Accountants.

The American Apparel and Footwear Association (AAFA), along with several other organisations, has urged the United States Trade Representative (USTR), the US government’s chief trade body, not to impose any new tariffs on countries currently under investigation over production capacity.

In a letter sent to the USTR on April 15, the AAFA warned that additional tariffs on supplying countries could raise costs for American consumers.

Last month, the USTR launched an investigation into 60 economies, including Bangladesh, over alleged failures to address issues related to production capacity and forced labour.

Bangladesh is scheduled to take part in a virtual USTR hearing on the matter on April 29.

The AAFA said in its letter that the US already imposes relatively high tariffs on textiles, apparel, footwear and accessories, even though these products contain significant US value, including intellectual property, raw materials such as leather, and textile inputs like yarns and fabrics.

As a result, textiles, apparel, footwear and travel goods face higher effective tariff rates than most other sectors.

The letter added that this burden disproportionately affects the industry, even though many of these goods are no longer produced in commercial quantities in the US.

It further said that although some countries identified in the investigation may run trade surpluses in certain product categories, these do not necessarily reflect structural excess capacity or practices that distort or restrict US commerce.

The concept of structural excess capacity does not reflect conditions in the US industry, it added.

Instead, the AAFA said, these trade flows are shaped by globally integrated supply chains, where production capacity is developed and used based on business decisions, long-term customer relationships and changing demand patterns.

The association urged the USTR to avoid any action that would further increase tariffs on these goods.

It also said the broad, multi-country investigation appears to be aimed at a pre-determined outcome rather than a focused review of specific practices.

The AAFA added that the investigation may be used to recreate tariff rates and structures that existed under the International Emergency Economic Powers Act (IEEPA).

It also cited Treasury Secretary Bessent, who said, “We will get back to the same tariff level for the countries. It will be just in a less direct and slightly more convoluted manner.”

The association warned that this approach could weaken the government’s ability to properly investigate and address specific foreign trade barriers.

In conclusion, the letter said the industry should not face unintended negative impacts from these investigations. It warned against further tariffs on an already heavily taxed sector, saying such measures would raise costs for American families while doing little to boost domestic production due to existing capacity and investment limits.

BANGLADESH EXPORTS SHOW STRONG GROWTH IN US MARKET

For example, in 2025, clothing exports -- accounting for 86 percent of Bangladesh’s total exports to the US -- rose by 12.36 percent to 266.15 crore square metre equivalents (SME). In value terms, exports increased by 11.75 percent to $8.20 billion compared with 2024, according to the USTR.

Footwear exports from Bangladesh reached 1.78 crore pairs, a rise of 76.43 percent in 2025 compared with 2024. In value terms, footwear exports grew by 52.67 percent to $391.77 million.

Travel goods exports increased by 26.32 percent to 2.15 crore pieces in 2025. Their value also rose by 35.44 percent to $12.37 million, the USTR said.

In another letter, the Forced Labor Working Group (FLWG) of the AAFA, along with 17 other trade organisations, urged the USTR not to impose tariffs linked to forced labour investigations.

They said companies that have invested heavily in compliance systems and are working to eliminate forced labour in supply chains should not be penalised through broad tariff measures that do not distinguish between responsible firms and bad actors.

The letter added that, under Agreements on Reciprocal Trade (ART) and related framework negotiations with the US, several economies -- including some covered by the investigation --have already committed to protecting labour rights and banning imports made with forced labour.

A consistent theme in global oil markets since the US and Israel attacked Iran is that the effective closure of the Strait of Hormuz will be short-lived, and therefore so will the disruption to the supply of crude and refined products.

That expectation has consistently been reflected in pricing for crude oil futures, which have risen sharply since ​the conflict began on February 28, but are still well short of the highs reached in the wake of Russia’s invasion of Ukraine in 2022.

In effect, the paper crude market has believed ‌US President Donald Trump’s slew of social media posts since the bombing started that the conflict will be short, and result in Iran accepting US terms for a peace deal.

The problem is that the reality on the ground doesn’t match the social media claims, and the longer the Strait of Hormuz remains closed the more severe the energy crisis will become, especially in Asia.

Brent crude futures fell 9.1 percent on April 17 to end at $90.38 a barrel in the wake of Trump’s post that the Strait of Hormuz was fully ​open. But they jumped 6.9 percent in early Asian trade on Monday to $96.59 when it became clear the waterway was still closed.

The latest round of optimism that the Strait of Hormuz would re-open began after a Trump social media post ​on April 17 that the waterway that carried as much as 20 percent of the world’s crude oil and refined product supply prior to the war was “fully open and ready for full passage.”

Trump’s assertion was even backed by elements within the Iranian government, but the optimism proved short-lived as Iran’s Islamic Revolutionary Guards Corps moved to keep the strait closed, given Trump’s decision to maintain a US ​naval blockade of Iranian ports.

There are several questions that the market should be asking about the current situation.

Does this mean that the Strait of Hormuz is now effectively being closed by the United States?

Would it re-open if Trump ended ​the blockade of Iranian ports?

Is there sufficient trust between the warring parties to accept a principle that the strait should be open to all?

Who is really in control in Iran, and are they willing to negotiate with a US administration that has a track record of abandoning agreements?

While these are issues for debate, the only fact that really matters is that the strait isn’t open and the risk of attack is likely to keep it that way for the hundreds of vessels waiting either side of the crucial waterway.

SUPPLY STRESS

In ​the meantime crude oil and refined product supply chains are becoming more stressed, especially in Asia, which was the destination for about 80 percent of all the shipments via the Strait of Hormuz prior to the conflict.

While crude futures have ​largely traded on the daily news flow and an underlying optimism that the conflict will be of a limited duration, physical oil and refined products have reflected a more dire near-term supply situation.

Refined products in the Asian trading hub of Singapore have ‌remained at extreme levels, with jet fuel ending at $204.13 a barrel on April 17, more than double the $93.45 close on February 27, the day before the war started.

Gasoil, the building block for diesel, ended at $145.27 a barrel on April 17, up 59 percent since the conflict started, although down from the record $199.89 hit on March 30.

The problem for Asia is that the worst of the supply crunch is probably still to come, as crude shipments into the region fall sharply.

Asia’s seaborne crude imports are estimated at 20.62 million barrels per day (bpd) in April, down from 22.36 million bpd in March, according to data compiled by commodity analysts Kpler. However, both March and April are well down on the 26.76 million bpd average for the ​three months prior to the attacks on Iran.

The situation ​is especially worrying for countries that are major refining centres and exporters of fuels to the region.

Singapore’s crude imports are forecast at 388,000 bpd in April, down from 715,000 bpd in March and 980,000 bpd in January.

South Korea’s crude imports are estimated at 1.68 million bpd in April, down from 2.24 million bpd in March and 2.74 million bpd in January.

Japan’s April imports are expected to be ​921,000 bpd, a drop from 1.63 million bpd in March and 2.16 million bpd in January.

Only India is bucking the trend, with April imports estimated by Kpler ​at 4.67 million bpd, up from 4.45 million bpd in March, but below January’s 5.15 million bpd.

India has been able to secure Russian oil to help offset the loss of barrels from the Middle East, with 1.64 million bpd arriving in April, up from 1.06 million bpd in February.

Notwithstanding India’s success in sourcing crude from other producers, the problem is that Asia’s supplies are coming under strain and it’s likely that refinery processing rates will have to be cut in coming weeks.

It is when the supply of refined ⁠products becomes more ​constrained that the real economic impact of Trump’s war of choice will be felt.

The question for the paper crude oil market is how ​long can it maintain the hope that the conflict will be over soon, when the reality seems to be heading in the other direction?

Finance authorities are set to seek Prime Minister's guidance as to how far the government can go in complying with the International Monetary Fund conditions to secure hard-term budget-support funds.

Finance Minister Amir Khasru Mahmud Chowdhury will lead his team at the consultation today with Prime Minister Tarek Rahman, officials say, as the IMF lending terms have seemingly outwitted negotiators.

A senior government official who attended last week's Spring Meetings in Washington says the decision has become increasingly complex as the current economic situation leaves little room to fully comply with all the IMF conditions.Global economy analysis

"It is now a political decision rather than an economic one -- whether the government will accept the IMF conditions," the official told The Financial Express.

Key IMF strings binding the release of the next two tranches from a lending package in June 2026 include withdrawal of subsidies, raising the tax-to-GDP ratio to 9.2 per cent, and adopting a market-based exchange rate.

Given the ongoing Middle East conflict, sluggish investment, rising fuel prices, persistent inflation, and a downward trend in exports, the government is unlikely to take any drastic measures in the upcoming budget, the official adds.

"We have found the IMF quite rigid on its conditions this time. It wants the withdrawal of all tax exemptions and the introduction of a single VAT rate, which appears difficult to implement under current circumstances," the official notes.

However, IMF officials have urged the government to undertake reforms early in its tenure to minimize future challenges.

Officials at the National Board of Revenue (NBR) say achieving a tax-to-GDP ratio of 9.2 per cent by FY2026-27 would require an additional Tk 2.0 trillion in revenue collection within the next year.Politics

At a recent coordination council meeting, the government set an NBR revenue target of Tk 6.04 trillion -- an increase by nearly Tk 1.0 trillion from the current fiscal year.

However, the revenue officials fear a revenue shortfall of around Tk 1.0 trillion in the ongoing fiscal year.

Until February, the NBR had collected Tk 2.51 trillion, roughly 50 per cent of the revised target of Tk 5.03 trillion.

Government insiders say the situation has become more complicated as the IMF has taken a firm stance on three key issues that the Ministry of Finance cannot decide on its own.

External financing from multilateral development partners largely depends on IMF assessments and approval. Following the IMF meetings, the NBR chairman held an emergency meeting Sunday to assess the feasibility of complying with the dos.

A senior NBR official has told the FE that achieving the targeted increase in the tax-GDP ratio -- from the current 6.5 per cent to 9.2 per cent -- would require around 50 per cent growth in tax revenue.

"We find these conditions difficult to implement in the current economic environment," the official says.

He adds that scrapping time-bound tax exemptions may not be legally feasible either, while withdrawing subsidies is not practical at a time when the economy is under strain due to the impact of the Mideast conflict.Financial news subscription

"The economy does not have the capacity to absorb a complete withdrawal of tax exemptions at this stage."

However, the IMF has advised the government to implement difficult reforms early in its tenure for long-term economic stability.

"We cannot increase revenue overnight simply by curbing tax evasion or recovering arrears," the NBR official says in clear terms.

The revenue board is currently conducting intensive internal assessments to evaluate the potential impact of implementing the IMF conditions.

Dr Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), suggests the government should prepare a roadmap to implement IMF conditions.

She, however, finds it difficult to implement all conditions by next year, such as withdrawal of all tax exemptions.

"We need IMF funds but the government needs to be cautious as economy is not prepared now to absorb the pressure," she adds.Banking sector news

There are many sectors that need tax benefits and fiscal support to grow, she notes.

The country's capital market began the week on a sluggish note today (19 April), as investors remained cautious following the recent adjustment in domestic fuel prices and ongoing uncertainty regarding the Middle East conflict.

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) edged down by approximately 9 points to settle at 5,247.

Market participants remained cautious, refraining from taking fresh positions and instead adopting a wait-and-see stance amid lingering geopolitical and macroeconomic uncertainties that continued to weigh on market momentum.

Despite a relatively steady performance during the mid-session, the early optimism failed to hold as mounting selling pressure in major large-cap scrips eventually eroded the initial gains.

EBL Securities, in its daily market review, noted that the recent hike in domestic fuel prices further reinstated investor caution.

While the benchmark index fell, the blue-chip DS30 index saw a marginal uptick, closing at 1,990. However, the overall market breadth remained bearish, with 223 issues declining against 125 advancing, while 56 remained unchanged.

Trading activity on the premier bourse saw a slight upward trend compared to previous sessions, with total turnover rising to Tk819 crore.

On the sectoral front, the engineering sector dominated market participation, accounting for 18.9% of the total turnover, followed by the textile and general insurance sectors.

However, the majority of sectors recorded negative returns. The paper and printing sector faced the steepest correction, dropping by 1.7%, while the travel and leisure and jute sectors declined by 1.5% and 1.1%, respectively.

In contrast, the general insurance sector emerged as a rare bright spot, posting a 2.2% gain, while the textile and tannery sectors also managed to end the day with marginal positive returns.

Several high-cap stocks acted as significant index draggers during the session, including Islami Bank, Walton Hi-Tech Industries, National Bank, ACI, and Beacon Pharmaceuticals.

On the other hand, turnover leaders included City Bank, Paramount Textile, Khan Brothers PP Woven Bag, Runner Auto, and Acme Pesticides.

Among individual stocks, Runner Auto and Janata Insurance emerged as the top gainers, both surging by 9.94%, while Sonar Bangla Insurance and Prime Textile also posted significant gains.

Conversely, Popular Life First Mutual Fund and Meghna Cement were among the top losers of the session, facing notable price corrections.

The bearish sentiment was mirrored at the Chittagong Stock Exchange (CSE), where the key indices both closed in negative territory.

The CSCX ended 5 points lower at 9,035, while the CASPI shed 9 points to settle at 14,751. Turnover at the port city bourse, however, saw an increase, reaching Tk41 crore

Oil prices rebounded more than 6% today (20 April) after tumbling more than 9% on Friday on news the Strait of Hormuz is closed again after both the US and Iran said the other party had violated their ceasefire deal by attacking ships over the weekend.

Brent crude futures jumped $6.11, or 6.76%, to $96.49 a barrel by 2327 GMT and US West Texas Intermediate was at $90.38 a barrel, ⁠up $6.53, or 7.79%.

The US military had seized an Iranian cargo ship that tried to run its blockade, US President Donald Trump said yesterday, while Iran said it would not participate in a second round of peace talks despite Trump's threat of renewed airstrikes.

The United States has maintained a blockade of Iranian ports, while Iran has lifted and then reimposed its own blockade of the Strait, which handled roughly one-fifth of the world's oil supply before the war began almost two months ago.

"Oil markets continue to gyrate in response to ⁠oscillating social media posts by the US and Iran, rather than the realities on the ground which remain challenging for oil flows to resume in a rapid fashion," Saul Kavonic, MST Marquee's head of research, said.

Both contracts posted on Friday their largest daily declines since April 18 after ⁠Iran said passage for all commercial vessels through the Strait of Hormuz was open for the remaining ceasefire period and Trump said Iran had agreed to never close the strait again.

"The announcement of ⁠the Strait opening proved premature," Kavonic said.

"Ship owners will be twice shy about heading towards the Strait again without receiving much more confidence that any announced passage is ⁠real."

More than 20 ships passed the strait on Saturday carrying oil, liquefied petroleum gas, metals and fertilizers, Kpler data showed, the highest number of vessels crossing the waterway since 1 March.

Finance Minister Amir Khosru Mahmud Chowdhury has said that the government will not accept all the conditions of the International Monetary Fund (IMF) in order to take loans.

"Decisions will be taken after safeguarding the interests of the country's people and businesses," he said while speaking with journalists at his office in the Secretariat today (19 April), after returning from the IMF-World Bank Spring Meetings.

Khosru stressed that the relationship with the IMF is not charitable but commercial.

He further said, "There are many ongoing discussions between the government of Bangladesh and the IMF and World Bank, and the issue is not only about the amount of money involved, which many people fail to understand."

He added that loan discussions with the IMF are ongoing and may continue for another 15 to 20 days, or even up to a month.

"We have not fully agreed with the IMF in the discussions. We are reviewing what the IMF is asking for, and we also have our own expectations. We are an elected government, and we will not accept everything just because someone asks us to," Khosru said.

The current government will not take any decision that creates pressure on the people or businesses, he added.

Khosru said discussions with the World Bank, Asian Development Bank (ADB), and Infrastructure Bank have already been completed.

He said the current IMF loan programme is not tied to the months of June or July.

"Many people do not understand this. The current IMF programme was taken under the previous Awami League government and includes many conditions. Its tenure is only seven months. Some of those conditions may not be acceptable to the current government."

"We will decide whether we will proceed with the next programme," Khosru added.

Responding to a journalist's comment that the introduction of the Family Card may have caused the IMF to step back or impose new conditions, the finance minister said there is no connection between the Family Card and IMF loans.

"On the contrary, the Family Card has been widely appreciated. It will help deliver the benefits of the economy to poor people."

When asked whether the increase in fuel prices was made to meet IMF conditions, he said fuel prices have increased globally.

"We are not the only ones who have increased prices. Everyone has asked why we are not increasing fuel prices. In Sri Lanka, fuel prices were increased by up to 25%."

He added, "If we do not increase fuel prices, pressure on the treasury increases, and with the upcoming budget, it is not easy to manage. So, we have increased it only as much as necessary. This has no relation with the IMF."

Asked whether inflation will rise, he said it may or may not increase. "The recent increase in fuel prices is temporary and not significant. Fuel has a small share in the inflation basket."

He further said representatives from the IMF, World Bank, ADB, Infrastructure Bank, and IDB will visit Bangladesh. "All of them want to work with the current government."

He added that their policies align with the government's election manifesto, so they are interested and supportive of cooperation.

Khosru also said that the presidents of the World Bank and the Asian Development Bank will visit Bangladesh.

The World Bank on Friday unveiled a new strategy aimed at helping small island states and other ​small countries better address unique challenges such as remoteness, exposure to shocks and a narrow economic base by ‌focusing firmly on jobs.

World Bank President Ajay Banga discussed the initiative at a closed-door gathering of ministers and central bank governors from 50 small countries held during the spring meetings of the International Monetary Fund and World Bank.

He said the concept was aimed at using differentiated tools to help small ​states attract more private investment, carry out policy and regulatory reforms to make it easier for businesses to operate ​and grow, and ultimately create more jobs.

It will focus on areas such as health, affordable energy, resilient ⁠infrastructure and micro- and small businesses where Bank officials see the greatest opportunities to boost growth, strengthen businesses, and create more and better jobs.

The World Bank Group last year approved a record $3.3 billion in new commitments and guarantees for small states, which face unique economic challenges and are disproportionately affected by shocks, as seen during the war in the Middle East.

"For small businesses, a single hurricane, a sudden surge in imported fuel prices, or a downturn in tourism can undo months of investment and income in a matter of days," the bank said in a blog released with the new strategy.

Banga said the Bank will take a differentiated approach to shape the regional projects it pursues in such countries, and partnerships would be a big component.

"This is not a one-size-fits-all approach. Small states are diverse, and our support will ‌reflect that," ⁠Banga told the finance officials. "We also know the economics are different."

He noted that working in small states costs up to four times more than in larger countries, so the Bank planned to streamline delivery of its services, use more flexible financing and scale solutions to make the most of each dollar.

Some projects are already underway.

In Tonga, for example, the bank will co-finance an urban resilience project with the Asian Development Bank under a mutual reliance ⁠framework agreement, a first-of-its-kind agreement between multilateral development banks.

Banga said more such agreements were planned, including one with the Inter-American Development Bank to expand the approach to the Caribbean. The World Bank was also expanding the tools available to countries, he said.

Better diagnostics were also important, the bank said. ⁠Deeper reports studying the constraints to private-sector–led hiring were underway for Barbados, Guinea-Bissau, Lesotho, Mauritius, Samoa, and Seychelles.

The World Bank could also leverage its power to help drive investments, the blog noted.

For instance, the International Finance Corp, the bank's investment arm, helped fund ⁠development of Botswana's first utility-scale solar project, while the World Bank worked on a parallel project on battery storage to enable the integration of solar projects into the grid.

"The result is not only a solar plant, but a replicable model for how unlocking private finance can open markets and create jobs," the bank said in its blog.