A Commentator: The election year is coming ahead. It has been alleged that the government is trying to manage the situation by printing extra money. The impact of the corona epidemic is still raging. The effects of war are everywhere. Instability is increasing in the domestic market of Bangladesh. At such a time, there has been an urge to repay the foreign debt of $12 billion and this debt must be repaid within the next four months.
The public and private sectors of Bangladesh have to repay $12 billion loans by December this year. Analysts believe that it will be difficult for Bangladesh to repay this amount of debt now due to the decrease in foreign exchange reserves and the dollar crisis. Although the government concerned says there is no reason to worry about repayment of this loan.
The former Governor of Bangladesh Bank, and Economist Professor Dr. Salehuddin Ahmed and Jahangirnagar University Economics Department Professor MM Akash have opined on the issue.
It will be very difficult for the government of Bangladesh to pay the foreign debt of $12 billion dollars within four months, said Dr. Salehuddin Ahmed said, actually we do not think properly while taking loans. There are also weaknesses in the reason we take loans. Projects are not completed on time.
I think the financial management of Bangladesh government is very weak. How will the government give $12 billion at once? I think it’s a step-by-step process. Said to repay within four months. The loan has already been repaid. But it will be difficult for the government to pay such a huge sum of money by limiting the time like this.
He said, Bangladesh central bank has reserves of $30 billion. Of this, $12 billion will put the reserves at greater risk.
Pointing out that there is no good news for the economy of Bangladesh, he said, “Remittances are not in a very regular position.” There is instability. Once it increases, it decreases again. Export income could not be increased. We are getting used to one-way export earnings. We are stuck in the garment industry with cheap labor. The scope for exporting more products has been created in the world market. We are destroying the leather industry. There is no urgency in the government about tea and jute industry. Internal unrest in the country is also increasing. The IMF loan is also not available properly. If it was properly supplied, the crisis would have eased somewhat.
Professor MM Akash also expressed almost the same expression. He thinks that three things should be considered to increase the current account of the state. Increasing export earnings, reducing imports and increasing remittances. We now have to see how these three sectors are doing. It seems to me, not in very good shape. At least inflation, market conditions and reserve conditions suggest so. Reserves are now down to $30 billion. A drop from $50 billion to $30 billion is not a good sign. We saw the situation in neighboring Sri Lanka.
This economist said, “If we can’t repay $12 billion from the current account, then we will have to pay from the reserve.” Paying off $12 billion in four months would create enormous pressure. Unless we can increase the amount of reserves.’
Paying $12 billion is not the end. The government has made many loans. This pressure will fall on everyone. Danger will increase. Attention needs to be increased in terms of export earnings, reducing imports and increasing remittances. Again, you can’t increase production by reducing imports. Reduced reserves mean increased risk. Anytime the state becomes insolvent due to reserves. Repayment of foreign debt means increasing pressure on reserves.
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