Govt must address high per capita foreign debt issue before it reaches extreme levels

Per capita foreign debt increased to $580 in June 2023 compared with that of $283 in June 2017.

Per capita foreign loan represents the share of the country’s foreign debt burden that each individual citizen carries. The surge in per capita external debts constrained public services and restricted opportunities and resources for citizens.

According to the central bank data, Bangladesh’s external debts, including public sector debts and private sector debts, reached $99 billion (about Tk 11 lakh crore) at the end of June 2023, surging from $45.23 billion in June 2017 and $23.5 billion in June 2009.

Finance minister AHM Mustafa Kamal, however, on October 31 said that currently the per capita debt of Bangladesh was about $365. The amount of foreign debts until June 2023 was $62,312.71 million.

According to the Bangladesh Bank data, the total external debts were $98,935.47 million at the end of June 2023 and of the amount, the public sector took $76.67 billion ($64.57 billion was borrowed directly by the government and the rest by various government institutions) in foreign credit and short-term foreign loans in the private sector were $22.25 billion.

Economists said that per capita loan showed the average debt burden on individuals, including both public and private sector debts, offering a comprehensive view of the country’s overall indebtedness.

Both the public and private sector debts are crucial for evaluating the country’s economic health and understanding the potential impact on its citizens.

Foreign loans could serve as a vital source of funding for development and economic progress, but prudent management of such loans is important.

Excessive reliance on such loans, without effective oversight, can potentially result in various economic and social challenges for a country.

The high amount of foreign loans means the government needs to allocate a significant portion of its budget to repay the principal and service the interest on the loans, economists said.

The mindless foreign loan to ensure fund embezzlement and corruption would burn the next generations for many years.

The draconian regime paralysed the country in every way in the name of economic development, but did nothing of economic development.