One of the conditions dictates that the government will need to fully implement the Supreme Court's directive on separation of the judiciary by July 2005.

Another stipulates announcement of a voluntary retirement scheme for civil servants by the same timeframe.

The WB Board approved $ 300 million as development support credit to Bangladesh on June 19. In the credit programme document, the bank pointed out the steps to be taken by the government by the next two years -- FY04 and FY05.

The government has already fulfilled 50 conditions, which the WB terms 'prior actions' to obtain the credit.

It would get another $350 million for poverty alleviation programmes if the government fulfilled additional conditions by FY04 and FY05. This would also qualify the government for getting WB loans in other sectors.

Unlike in the past, the WB this time gave the loan in a single tranche, "since experience with multi-tranche adjustment operations in Bangladesh in the early-to-mid 1990s was not good... it is intended that the credit will be disbursed in a single tranche, upon completion of the prior actions (the conditions). The prior actions are consistent with the government's medium-term policy framework."

To qualify for more loans, the government will have to fulfil conditions in financial sector, public administration, education and health sectors by July 2004, the WB document says.

According to the conditions, the government will have to ask all ministries to publish annual reports to be submitted to the relevant parliamentary standing committees within a specified time.

The government will have to initiate preparation of a Freedom of Information Act and introduce a mechanism for fast track promotions and performance-based salaries.

The government will also have to improve the health sector governance by initiating actions to develop a unified regulatory structure for the provision of public and private health services.

It will also need to limit concessional borrowing including suppliers' credit to less than 2 per cent of GDP and also classify Annual Development Programme as core and non-core projects.

In the banking sector, the government will have to rationalise the staff of the Bangladesh Bank, complete the process of selling off Rupali Bank, secure management support for Janata and Sonali banks and complete audits of the nationalised commercial banks.

If these actions are taken in FY04, the government will get $550 million including $150 million in development support credit-2.

By July 1, 2005, it will have to fulfil even more conditions like reducing the top tariff rate to 25 per cent and eliminating all quantitative restrictions.

In the financial sector, the government will have to introduce a voluntary retirement scheme for the NCB staff, phase out BB refinancing for directed and concessional credit programmes, further rationalise the national savings schemes to reflect market-determined interest rates, initiate privatisation of a second NCB and other issues.

In the energy sector, the government will have to transfer operations and management of 50 per cent of the electricity and gas distribution market to the private sector and issue tender documents inviting bids for at least another 25 per cent of the market.

The government will have to pass the Freedom of Information Act and ensure that every ministry has fully functional financial management units.

With these conditions met, the government will get $700 million including $200 million in poverty reduction support credit-1 in FY05.

On May 17, Finance Minister M Saifur Rahman wrote a 22-page letter to James D Wolfensohn, president of the WB, highlighting the achievements and steps taken and his commitment about the steps which would be taken in the future.