Economists must hit at where Bangladesh’s problem crucially lies
The countries that have fragile economies usually approach the international lending organisation IMF for economic recovery. As a developing economy Bangladesh was triumphantly on the way of becoming a middle income economy by 2026 and its dollar reserves even a couple of years ago were burgeoning, thanks mainly to its garments exports and migrant workers’ remittance.
But the government became extravagant in spending and even had the ‘luxury’ to extend even a loan of $200 million to the crisis-hit country like Sri Lanka all the while beating the drum of development. It used its precious reserves to buy costly Boeings for Bangladesh Biman and other infrastructure development projects without thinking that reserves must not be used this way. As per Bangladesh Bank Order 1972, there is no scope to use the reserve in any projects.
Even more seriously, under the watch of the government, huge money looted from banks, financial institutions and power sector among others was laundered thus making the dollar reserves extremely vulnerable.
When the dollar crisis hit the economy in the wake of Ukraine-Russia war as well as the aftereffects Covid-19 pandemic, the government’s fantasy kingdom has fallen on the ground like a pack of cards. To keep the economy going, albeit frustratingly, the government took an IMF loan to the tune of $4.7-billion under certain conditions and commitments that include reducing subsidies from the power and agriculture sector.
As a result of meeting these conditions partially, a vast majority of people in Bangladesh is already suffering inflation and inequality has widened even further. Against this backdrop, a discussion entitled ‘How to Reflect the Concern of the Disadvantaged Groups in the Upcoming National Budget during the IMF Programme Period?’ by the think tank Center for Policy Dialogue and the Citizen’s Platform Group for SDGs ahead of the national budget.
The experts in the discussion pointed out that implementation of the IMF conditions will increase production costs in manufacturing and agriculture sectors, thereby pushing up inflation further. They reminded that much of the national budget would be prepared as per the IMF loan conditions against the backdrop of ongoing economic downturn, price spiral of essential commodities, prolonged dollar shortage and power outage, high non-performing loan and capital flights.
Debapriya Bhattacharya, a distinguished CPD fellow in his keynote paper, termed the forthcoming national budget “an orphan” and the IMF was the “foster father” of the economy. The nation is not prepared to listen to this kind of rhetoric. People like him must say why the economy has come to this present hopeless state clearly pointing out that absence of democracy, lack of accountability in running the government affairs as well as massive corruption are the culprits of the present problem. Unless they do that, their role will be considered no better than the queer experts and scientists who inhabit the imaginary lands mentioned in the voyages of Jonathan Swift’s Gulliver’s Travels.
