Bangladesh’s economic development agenda gained substantial international backing this week as the World Bank and Asian Development Bank jointly committed over $300 million to address workforce skills gaps. The World Bank confirmed $150.75 million in additional financing for informal-sector employment on Monday, while the ADB approved $150 million for modernizing technical and vocational training.
According to the Economic Relations Division, these investments represent a coordinated $300 million strategy to eliminate the skills mismatch between traditional educational outputs and the requirements of the modern high-tech economy. The funding targets comprehensive workforce transformation to support Bangladesh’s aspirations to become an upper-middle-income country.
ERD Secretary Md Shahriar Kader Siddiky and World Bank Division Director for Bangladesh and Bhutan, Jean Pesme, formalized the loan agreement on Sunday in Dhaka. The World Bank simultaneously executed a $750,000 grant agreement. Under the Recovery and Advancement of Informal Sector Employment project, the Palli Karma-Sahayak Foundation will deploy the additional $150.75 million to provide market-relevant skills training and entrepreneurship development for low-income youth and micro-entrepreneurs.
The expanded project focuses on transforming the informal sector through several high-impact interventions. It will deliver technical training and hands-on apprenticeships to approximately 176,000 additional young people, increasing the project’s total reach to over 400,000 beneficiaries. The initiative specifically emphasizes women and climate-vulnerable communities, integrating gender equality and environmental resilience into workforce development.
World Bank financing enables beneficiaries to access microfinance and business development services designed to revive small-scale businesses and facilitate post-pandemic economic growth. The project introduces innovative home-based childcare services to eliminate barriers to women’s workforce participation, supplemented by targeted life-skills training. It also promotes climate-smart livelihoods for young workers in flood-prone and cyclone-affected areas, building disaster resilience into economic opportunities.
While Bangladesh has substantially increased education enrollment, skills mismatch remains a persistent challenge. Graduates often lack the technical proficiency required by modern industries, limiting the country’s competitiveness in higher-value economic activities and constraining the realization of the demographic dividend.
The new financing increases the World Bank’s total RAISE project support to $350.75 million. Since launching in 2021, the initiative has produced tangible outcomes. Recent data indicate that over 80% of apprentices secure employment within 3 months of completing training. The project has also registered over 250,000 returning migrants for reintegration support, facilitating their economic transition in the domestic economy.
The ADB’s $150 million TVET Teachers for Future programme adopts a complementary instructor-focused approach. The program will train some 10,000 technical and vocational education and training teachers in fourth Industrial Revolution technologies, building institutional capacity for sustained skills development.
The combined World Bank and ADB investments create a comprehensive workforce development ecosystem addressing both immediate employment needs and long-term institutional capacity for continuous adaptation to evolving technology and market requirements.
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