Staff reporter :
Withdrawing from the ongoing International Monetary Fund (IMF) loan programme would be a short-sighted move and ultimately detrimental to Bangladesh’s long-term economic interests, warned Professor Selim Raihan, Executive Director of the South Asian Network on Economic Modelling (SANEM), in a Facebook post on Sunday.
“It is worth looking beyond the immediate economic cost of the loan and valuing the strategic advantage the IMF programme represents in driving long-overdue structural reforms – in areas such as banking, taxation, public expenditure, and exchange rate management,” he wrote.
While acknowledging that the $4.7 billion IMF loan, disbursed in tranches, is not transformative in size, Professor Raihan cautioned against reducing the IMF’s involvement to a purely financial transaction. “To do so is to miss the bigger picture,” he argued.
He stressed that the real value of the programme lies in the policy discipline it encourages and the window it opens for meaningful reform. “Over the decades, Bangladesh has struggled to implement essential reforms due to weak internal pressure for change and institutional inertia.
In such circumstances, external influence – particularly from institutions like the IMF and the World Bank – has historically played a pivotal role,” he said.
By linking disbursements to specific policy actions, the IMF creates scope for governments to bypass domestic resistance and implement politically sensitive measures, he noted.
However, he also warned that without genuine domestic ownership of the reform agenda, the IMF’s conditionalities may be perceived as externally imposed and risk losing local support.
“There are examples of both success and failure when it comes to IMF programmes in developing countries,” he added.
Professor Raihan cautioned that pulling out of the programme at this stage would risk a return to a policymaking ‘comfort zone’ – a pattern he said was characteristic of previous administrations that delayed essential reforms in favour of short-term stability, often resulting in more severe problems later on.
“The delays in disbursement of IMF loan tranches are not due to arbitrary demands, but stem from real and long-standing concerns – sluggish revenue collection, a non-market-determined exchange rate, limited progress on subsidy rationalisation, and the lack of reform in the banking sector,” he explained.
Rather than exiting the programme, Professor Raihan urged the government to deepen its engagement with the IMF to chart a reform path that is both politically feasible and tailored to Bangladesh’s development priorities.
“Reform is not a one-size-fits-all process – it allows room for sequencing and negotiation. With active and strategic engagement, Bangladesh can influence the reform agenda, integrate it with its national development goals, and ensure appropriate social safety nets for the vulnerable,” he said.
He warned that an opt-out from the IMF programme would undermine the credibility of Bangladesh’s economic governance in the eyes of the international community. “It is not the conditionalities that destabilise the economy, but the continued absence of reform momentum,” he stated.
“Bangladesh must remain committed to the programme – not just for the financing it provides, but for the opportunity it offers to build a stronger, more transparent, and sustainable economic future,” Professor Raihan concluded.
