Dhaka, August 21:

Future World Bank funding for projects such as power plants in Bangladesh depends on reducing corruption which acts as a big drag on economic growth, bank president Paul Wolfowitz said. “We can’t commit money unless we’re convinced it is going to be spent in the right way,” Wolfowitz said after meeting finance minister M Saifur Rahman on the final leg of his first South Asian tour in the post. Bangladesh received $600 million in funding from the World Bank last year and is its third largest recipient of low-interest loans.

“The problem of corruption is a big drag on the Bangladesh economy,” Wolfowitz said, adding the country could grow by eight per cent a year instead of the current five per cent if graft were reduced. Bangladesh, one of the world’s poorest countries with nearly half its 140 million people living on less than a dollar a day, has grown more than five per cent a year since the mid-1990s.

Last year the Berlin-based Transparency International labelled it the world’s most corrupt economy for the fourth year running. The Bangladesh government has rejected the body’s methodology. Wolfowitz arrived in Dhaka Sunday after visits to Pakistan and India last week. He was also scheduled to meet prime minister Khaleda Zia and opposition leader Sheikh Hasina Wajed and visit a poverty alleviation project of a local NGO. Wolfowitz said the World Bank is prepared to invest in the power sector where the country “badly needs investment” but the government has to fix its corruption problems first.