Post-LDC transition could worsen debt crisis, Warns Fahmida

Staff Reporter :

Fahmida Khatun, Executive Director of the Centre for Policy Dialogue (CPD), has warned that Bangladesh will face increased costs for foreign loans following its graduation from the Least Developed Country (LDC) category.

She made these remarks while speaking as the chief guest at a shadow parliamentary debate competition on the challenges of LDC graduation, organised by Debate for Democracy at the Bangladesh Film Development Corporation today (15 March).

“At present, we benefit from grace periods and low-interest loans from various international institutions.

After graduation, these grace periods will be shortened, and we will face competitive interest rates, which will increase borrowing costs.

It is essential to consider this in advance,” she said. Fahmida Khatun emphasised the importance of careful planning when securing foreign loans.

Highlighting concerns about mismanagement, she added, “If we continue to misuse loans through corruption and inefficiency, as has been the case over the past 16 years, repayment will become challenging.

We must clearly understand how loans will be used and the expected returns. Without proper long-term management, we risk falling into a debt trap.”

She also criticised the manipulation of economic data, stating, “Bangladesh is a notable example of how data can be distorted for political purposes.

We have seen inflated GDP figures without clear sources, despite the absence of substantial investment. Even the Bangladesh Bureau of Statistics (BBS) later acknowledged manipulating data.”

Regarding post-graduation economic policies, Fahmida Khatun stressed the importance of separate approaches to tariff and trade policies.

“We also need to assess whether export incentives can continue. While initial tariff exemptions are vital for industries, they should not be extended indefinitely,” she said.

In the shadow parliamentary debate competition, Shaheed Suhrawardy Medical College was crowned champion, while Noakhali University of Science and Technology secured the runner-up position.

The judging panel comprised Professor Abu Muhammad Rais, Sheikh Mohammad Jobayed Hossain, SM Morshed, and journalists Mainul Alam and Md Touhidul Islam.

At the conclusion of the event, trophies, crests, and certificates were presented to the participants. Hasan Ahmed Chowdhury Kiran, Chairman of Debate for Democracy, presided over the programme.