WB approves $300m to strengthen local governments

The World Bank (WB) yesterday approved a USD 300 million financial aid to give local governments at the grassroots level discretionary funds that would enable communities to decide and implement local development priorities.

Based on the success of two earlier projects, the Local Governance Support Project-3 (LGSP-3) will cover all the 4,550 union parishads, the lowest tier of the local government, and benefit more than 115 million people. The project will establish national budget transfers to the union parishads as a norm.
The project will also expand to the urban local government and pilot a fiscal transfer system in 16 municipalities in eight divisions of the country. For the first time, the eligible municipalities will receive block grants with discretionary powers to select sub-projects to improve service delivery.
“The WB has been a long-standing partner in supporting the government’s vision of advancing decentralisation and empowerment of local governments,” said Rajashree Paralkar, WB's acting country director for Bangladesh, Bhutan and Nepal.
“A predictable and transparent financial resource transfer system will help the union parishads and participating municipalities to further improve planning, participatory budgeting, public finance management and accountability,” the WB official added.
To institutionalise the fiscal transfer system, starting from the fourth year of the project, the government will fully finance the union parishad block grants out of the national budgetary allocations with all the principal features. This will help the union parishads respond to local needs more effectively and make them more accountable.
“Like its predecessors, the LGSP-3 will also place a strong emphasis on gender empowerment. At least one-third of the ward committee and supervision committee members will continue to be women,” said Shenhua Wang, WB team leader for LGSP-3.
 “To ensure that women’s decisions are implemented, 30 per cent of the grant will be earmarked for schemes prioritised by women,” noted the WB team leader.
Since 2011, through the predecessor LGSP, all union parishads have been receiving annual block grants with full discretion to deliver local services after undergoing rigorous audit. 

 

WB approves $300m to strengthen local governments

The World Bank (WB) yesterday approved a USD 300 million financial aid to give local governments at the grassroots level discretionary funds that would enable communities to decide and implement local development priorities. Based on the success of two earlierprojects, the Local Governance Support Project-3 (LGSP-3) will cover all the 4,550 union parishads, the lowest tier of the local government, and benefit more than 115 million people. The project will establish national budget transfers to the union parishads as a norm. The project will also expand to the urban local government and pilot a fiscal transfer system in 16 municipalities in eight divisions of the country. For the first time, the eligible municipalities will receive block grants with discretionary powers to select sub-projects to improve service delivery. The WB has been a long-standing partner in supporting the governments vision of advancing decentralisation and empowerment of local governments, said Rajashree Paralkar, WBs acting country director for Bangladesh, Bhutan and Nepal. A predictable and transparent financial resource transfer system will help the union parishads and participating municipalities to further improve planning, participatory budgeting, public finance management and accountability, the WB official added. To institutionalise the fiscal transfer system, starting from the fourth year of the project, the government will fully finance the union parishad block grants out of the national budgetary allocations with all the principal features. This will help the union parishads respond to local needs more effectively and make them more accountable. Like its predecessors, the LGSP-3 will also place a strong emphasis on gender empowerment. At least one-third of the ward committee and supervision committee members will continue to be women, said Shenhua Wang, WB team leader for LGSP-3. To ensure that womens decisions are implemented, 30 per cent of the grant will be earmarked for schemes prioritised by women, noted the WB team leader. Since 2011, through the predecessor LGSP, all union parishads have been receiving annual block grants with full discretion to deliver local services after undergoing rigorous audit.