The remaining $1.9 billion from the IMF’s program comes with conditions that could do more harm than good. And the country’s real development lifelines — JICA, ADB, the Europeans — don’t require IMF compliance anyway.

By Shama-E Zaheer · April 20, 2026

---

The question I keep coming back to is straightforward. Is it worth contorting the entire banking and fiscal architecture of a $460 billion economy to unlock $1.9 billion from an institution whose prescriptions have, in country after country, made things worse?

Where Things Stand

The objections center on four issues: weak revenue collection, slow banking sector reform, stalled energy subsidy withdrawal, and incomplete exchange rate liberalization. Fair enough, as some of these are real problems. But the framing matters. The IMF is treating each of these as a binary pass-fail gate, when in reality they are complex, sequenced reform challenges that cannot be rushed without creating worse distortions.

The IMF’s Track Record With Similar Economies

Before accepting the premise that Bangladesh must comply or suffer, it’s worth looking at what happened to countries that did comply.

Argentina — the $57 Billion Failure

Argentina has had 21 emergency financial support programs with the IMF — more than almost any country on Earth. The most spectacular failure was the 2018 Stand-By Arrangement, the largest in IMF history at $57 billion. The program demanded fiscal austerity, spending cuts, and inflation control. What followed was a deepening recession, a poverty rate that climbed above 35%, and a currency that kept falling despite the bailout. The IMF itself later admitted the program “did not fulfill the objectives of restoring confidence in fiscal and external viability while fostering economic growth.” Brookings described the situation as “a series of IMF-supported programs that has failed in a spectacular way, leading to widespread hardship and financial panic.” (Source)

Greece — Austerity that Broke a Country

Greece underwent severe Troika-imposed austerity from 2010 to 2018. GDP contracted by roughly 25%. Unemployment peaked above 27%. The IMF’s own internal review later conceded that fiscal multipliers had been badly underestimated, meaning the austerity was far more contractionary than their models had predicted. A generation of young Greeks emigrated. The country experienced what even sympathetic observers described as a humanitarian crisis, not in a war zone, but inside the European Union.

Sub-Saharan Africa — Structural Adjustment’s Graveyard

The Structural Adjustment Programs of the 1980s and 1990s demanded privatization, subsidy removal, trade liberalization, and public spending cuts across Zambia, Ghana, Tanzania, Nigeria, and dozens of other countries. The results were devastating: collapsed public health systems, rising poverty, deindustrialization. The term “structural adjustment” became a pejorative in development economics. A 2023 ActionAid report covering 10 African countries found that 8 out of 10 had recently been advised by the IMF to cut or freeze public sector wage bills, echoing the same playbook that failed forty years ago.

Pakistan — the Revolving Door

Pakistan has entered over 20 IMF programs since the 1950s. Each one delivers temporary stabilization followed by a reversion to the same structural problems. The pattern: borrow, impose conditions, partially comply, lapse, borrow again; this has become a textbook case of institutional dependency without institutional transformation. Pakistan’s per capita income growth over these decades has been anemic relative to comparable economies that charted independent paths.

The Countries that Grew without the IMF

Now consider the other side. The economies that achieved the highest sustained growth over the past three decades: China, Vietnam, India post-1991, South Korea post-crisis, Indonesia post-Asian crisis, all did so by selectively engaging with international institutions while maintaining sovereign control over the pace and sequencing of reforms.

Vietnam is the most instructive parallel for Bangladesh. It has been one of the largest recipients of both JICA ODA loans and ADB financing for decades, despite never having an active IMF lending program in recent years. Vietnam pursues a state-directed economic model with capital controls and managed exchange rates, precisely the kind of policies the IMF would typically oppose. Yet JICA just signed a $50 million loan co-financed with ADB for Vietnamese rural MSMEs in April 2026. Nobody asked Hanoi for an IMF report card.

China receives substantial ADB lending while maintaining economic policies, state-owned enterprise dominance, capital controls, managed currency, that run counter to every IMF prescription in the book. Uzbekistan has been a major ADB and JICA borrower, specifically identified as a priority country for the new $1.5 billion LEAP 2 infrastructure fund. Cambodia, Laos, Myanmar (pre-coup), all received large JICA and ADB portfolios without active IMF programs.

ODA Is Not Contingent on IMF Compliance

This is the most important point, and the one least understood in Dhaka’s policy circles: the major development financing institutions operate under independent mandates with their own eligibility criteria, and IMF compliance is not a prerequisite.

ADB

The Asian Development Bank classifies developing member countries into Groups A, B, and C based on GNI per capita and creditworthiness. Bangladesh accesses ADB lending based on this classification, not on whether it has an active IMF program or is meeting IMF conditionalities. ADB’s 2024-26 allocation for Bangladesh was projected at $5.5 billion, with over half directed toward climate financing. This pipeline does not have an IMF compliance gate. ADB has its own country partnership strategy focused on competitiveness, green growth, and human capital.

ADB Bangladesh Operations

ADB is supporting Bangladesh’s structural economic transformation independently, though the country’s downgraded credit rating and rising borrowing costs could limit policy-based loans. The pipeline is project-driven, not IMF-conditioned. (Source)

JICA

Japan’s ODA loan terms are set by income category. For countries with active IMF programs, JICA can modify terms to meet IMF concessionality criteria, but this is an accommodation, not a prerequisite. Countries without IMF programs simply receive standard JICA terms. Bangladesh has been one of JICA’s largest borrowers globally; in FY2020, JICA’s ODA loan commitment to Bangladesh hit a record 373 billion yen. JICA has active projects in metro rail, power generation, highway development, and port infrastructure. None of these are contingent on Bangladesh’s IMF review status.

JICA Bangladesh Portfolio

JICA’s ODA commitment to Bangladesh has included the Matarbari power project, Dhaka Metro Rail Line 6, the Chattogram-Cox’s Bazar highway, and SME two-step loan programs, all structured as bilateral government-to-government agreements independent of IMF conditionality. (Terms · Disbursement Record)

European Development Finance

The EU’s broader development cooperation, through KfW, AFD, EIB, and bilateral member state programs, operates independently of IMF conditionality. The one exception is the EU’s Macro-Financial Assistance (MFA), which is explicitly tied to a disbursing IMF program, but MFA is only available to EU neighborhood countries. For Bangladesh, European development financing flows through project-level agreements, climate platforms, and sector-specific facilities. France’s AFD alone has processed over $1 billion in Bangladesh, with more than 75% directed toward climate projects.

The Bottom Line

Bangladesh’s real development financing lifelines, ADB ($5.5 billion pipeline), JICA (record-level commitments), European bilateral (AFD, KfW, EIB), are structurally independent of IMF program performance. The $1.9 billion remaining from the IMF represents less than a quarter of what these institutions collectively mobilize for Bangladesh. Walking away from onerous conditionality does not mean walking away from development finance.

What Bangladesh Actually Needs

Let me be clear, I am not arguing that Bangladesh has no reform needs. The banking sector is fragile, revenue mobilization is weak, and the exchange rate framework needs coherent implementation. These are real problems. But the IMF’s approach to solving them, demanding simultaneous, rapid-fire reforms across all four fronts with binary compliance gates, is the wrong sequencing for an economy that’s navigating a post-uprising political transition, absorbing LDC graduation, and managing elevated global commodity prices.

Bangladesh’s GDP growth decelerated to 3.7% in FY25. Inflation remains elevated at 8.2%. Tax revenue-to-GDP fell sharply. The IMF’s own Article IV consultation in January 2026 noted that the primary deficit target was met, but only through “substantial cuts in capital and social spending.” In other words, Bangladesh achieved the IMF’s fiscal target by starving infrastructure and social programs. That’s not reform. That’s self-harm dressed up as discipline.

The smarter approach is to sequence reforms in a way that doesn’t tank the economy while you’re trying to fix it. Prioritize revenue mobilization through broadening the tax base, not through regressive measures that squeeze the middle class. Phase in banking sector reforms with realistic timelines that allow weak institutions to restructure rather than mechanically reclassifying them into crisis categories. Let the exchange rate move, but manage the transition so it doesn’t trigger import cost shocks in an economy already dealing with elevated inflation.

And critically, stop treating the IMF’s remaining $1.9 billion as if it’s the only money in the room. It isn’t.

The Takeaways

The real risk of walking away from IMF conditionality isn’t loss of ADB or JICA financing, those pipelines are independent. The real risk is reputational signaling to private capital markets and credit rating agencies. That’s a legitimate concern, and it needs to be managed. But it’s a solvable problem. Countries like India, Vietnam, and Indonesia have all demonstrated that you can maintain investment-grade access to capital markets while charting your own policy course, provided the underlying economic fundamentals are sound and the reform direction, not the speed, is credible.

Bangladesh has $460 billion in GDP, $50 billion in garment exports, a young and growing labor force, and a strategic geographic position between South and Southeast Asia. These fundamentals don’t disappear because Dhaka decides to negotiate harder with the IMF on sequencing.

The $1.9 billion question isn’t whether Bangladesh needs reform. It does. The question is whether Bangladesh needs to accept someone else’s reform timeline at the cost of its own economic stability. The evidence, from Argentina to Greece to sub-Saharan Africa, says no. And the evidence from Vietnam to China to Uzbekistan says there’s another way.

Countries that achieved the highest sustained growth in the past three decades did so by selectively engaging with international institutions while maintaining sovereign control over the pace and sequencing of reforms. Bangladesh needs to do some adulting and do just that.

Sources & Further Reading

1. IMF Executive Board, “Article IV Consultation with Bangladesh,” January 26, 2026. imf.org
2. Krishna Srinivasan, IMF Asia-Pacific press briefing, April 16, 2026. Reported by The Business Standard
3. “IMF loan delay puts pressure on Bangladesh economy,” Bangla Mirror News, April 18, 2026. banglamirrornews.com
4. IMF Country Report No. 26/24, Bangladesh Staff Report (2025 Article IV). PDF
5. Argentina and the International Monetary Fund, Wikipedia. wikipedia.org
6. Brookings Institution, “The IMF’s Dilemma in Argentina: Time for a New Approach to Lending?” brookings.edu
7. IMF post-mortem on the Argentina program: “The programme did not fulfil the objectives.” D+C
8. Bretton Woods Project, “IMF and Milei — partners in Argentina’s neoliberal autocracy,” July 2025. brettonwoodsproject.org
9. ActionAid, “Fifty Years of Failure: The IMF, Debt and Austerity in Africa,” October 2023. actionaid.org
10. Human Rights Watch, “IMF: Austerity Loan Conditions Risk Undermining Rights,” September 2023. hrw.org
11. Hoover Institution, “The Case Against the International Monetary Fund.” IMF compliance rates study by Sebastian Edwards (UCLA). hoover.org
12. Eurodad, “Unhealthy Conditions: IMF loan conditionality and its impact on health financing,” November 2018. eurodad.org
13. GDP Center, Boston University, “IMF Austerity is Alive and Increasing Poverty and Inequality,” April 2021. bu.edu/gdp
14. JICA Terms and Conditions of ODA Loans (effective April 2024). jica.go.jp
15. ADB Public Sector Financing: Lending Policies and Rates. adb.org
16. ADB Bangladesh Country Overview. adb.org
17. JICA ODA loan disbursement records in Bangladesh. The Business Standard
18. EU Macro-Financial Assistance policy — requirement of active IMF program. ec.europa.eu
19. Bangladesh Climate and Development Platform (BCDP) launch, December 2023 — ADB, JICA, World Bank, EU, AFD joint commitment. imf.org
20. JICA-BIDV $50M loan to Vietnam rural MSMEs, April 2026 — financing without IMF program. vietnamplus.vn