Farrukh Khosru :
Bangladesh’s external debt dramatically increased under the oligarchic kleptocracy of the Sheikh Hasina regime from 2009 to 2024, with the average external debt stock rising from $10.7 billion between 1972 and 2008 to $52.6 billion from 2009 to 2023.
The country has seen a significant increase in external debt since 2009, with the debt stock rising from $23.3 billion in 2008 to $100.6 billion by December 2023.
This increase is largely attributed to various mega-projects initiated under the authoritarian rule of Hasina, which relied heavily on borrowed funds.
Corruption, money laundering, and poor project management have led to lower-than-expected returns from these projects, exacerbating the debt situation.
Key indicators, such as the gross external debt-to-GDP ratio and the external debt-to-export earnings ratio, have worsened, indicating a looming debt crisis temporarily alleviated by an IMF loan.
The IMF’s loan, however, is not a sustainable solution, and there are calls for holding lenders accountable for irresponsible lending, knowing the borrowed funds were misused.
The IMF, World Bank, and ADB have continued to support Bangladesh despite concerns about the legitimacy of the regime and its corruption.
The World Bank, which withdrew from a project due to corruption concerns in 2012, approved a $900 million loan just before the month (on 21 June, 2024) Sheikh Hasina fled the country, seemingly overlooking the country’s deep-rooted corruption issues.
Bangladesh ranks as the 10th most corrupt country globally, with significant amounts of money laundered out of the country.
There are moral, economic, and legal justifications for repudiating such odious debts. Morally, it is unacceptable to burden future generations with the debts of a corrupt regime.
Economically, repudiating such debts can reduce the debt burden, discourage the emergence of oppressive regimes, and support the welfare of the country.
Legally, international law acknowledges that debt repayment is not absolute and can be limited by equitable considerations.
The new interim government, led by Nobel Laureate Prof. Dr. Yunus, is urged to impose a moratorium on debt repayments, drawing on UN Security Council resolution 1483, which protected Iraq from creditor lawsuits.
It is proposed that an independent review of all debt contracts be conducted to assess the beneficial use of these debts and to identify portions wasted through corruption or used to finance repression.
These should be classified as “odious debt,” a concept in international law that refers to debts incurred by regimes without public consent and used for harmful purposes.
The new government is urged to confront this issue and ensure that future financial support is used responsibly and transparently.
The new government of Bangladesh is encouraged to halt external debt servicing and request the UN to establish an independent commission to review the debts incurred under the previous regime.
This review should exclude lenders to avoid conflicts of interest.
Despite the challenges posed by powerful countries and financial institutions, the people of Bangladesh have expressed a desire for a new beginning based on accountability and justice.
The burden of odious debts should not hinder the rebuilding of the nation.