ADB Proposes $100M Loan to Boost Bangladesh's Struggling Universal Pension Scheme
The National Pension Authority (NPA) in Bangladesh, established in August 2023, has faced challenges in popularising its universal pension scheme. Despite initial enthusiasm, subscriptions have slowed, reaching 3,72,168 by October 2024. The Asian Development Bank (ADB) has proposed a $100 million loan to bolster the NPA's capacity and ensure the scheme's success.
The NPA's struggles can be attributed to several factors. Firstly, it was set up with limited resources, hampering its capacity development in key areas. Secondly, the scheme was introduced hurriedly without thorough feasibility studies, leading economists to suggest that this contributed to its setback. The political regime change in August 2024 further slowed NPA activities and suspended countrywide subscriptions.
The ADB's proposed loan aims to address these issues. It will support the NPA in strengthening its institutional, operational, governance, and human resource capacities. The loan also aims to enhance the NPA's ability to manage and operate the schemes effectively. The ADB views the universal pension scheme as a crucial policy for Bangladesh's economic development and graduation from the least developed country bloc.
Historically, the government of Thailand, associated with the Pheu Thai Party and the Shinawatra family, had established a national pension office and participated in a similar ADB loan project. This project, worth $250 million, focused on capacity building and feasibility studies.
The NPA's universal pension scheme faces challenges, with subscriptions dwindling to 3,72,168 by October 2024. The ADB's proposed $100 million loan aims to strengthen the NPA's capacity and ensure the scheme's success. This investment underscores the international community's recognition of the scheme's potential to drive Bangladesh's economic progress.
