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Economic crisis is more domestic than global: Minister of State for Planning
Published: February 04, 2023 19:17:07
State Minister for Planning Shamsul Alam sees more internal responsibility than the global situation behind the pressure of the economy for the past few months.
The government has repeatedly blamed this situation on the changed global situation due to the Russia-Ukraine war. This was the first time another explanation came up. However, he did not give a detailed explanation about this 'internal crisis'. News from bdnews24.com.
The state minister said, "The economic crisis is more internal than global in nature."
He was speaking at the annual economist conference of private research organization South Asian Economic Modeling (SANEM) at the Mohakhali BRAC Center in Dhaka on Saturday, two days after the first installment of the IMF loan was deposited.
Like many other countries in the world, the past one year is going to be difficult for Bangladesh. Experts are talking about the biggest anxiety about the economy in the last era due to the rise in prices of commodities and energy in the global market, further impact on prices due to depreciation of rupee against the dollar, dollar crisis, continuous decline in reserves, decline in expatriate income, etc.
The Minister of State for Planning also spoke about the criticism that politics has gone into the hands of businessmen. He said, "The politics of the country is in the hands of politicians, but many members of parliament are businessmen."
The state minister also believes that the government is taking a loan from the International Monetary Fund or IMF to come out of this economic crisis, which will be positive for the country.
He said, “The reforms proposed by the IMF in our financial sector are logical. On their (IMF) advice, a series of reforms are being carried out in the financial sector. As we have taken these proposals positively, now other donor agencies are also showing interest.”
Last January 31, the IMF announced the approval of a loan of 4.7 billion dollars for Bangladesh. Two days later, 47.62 million dollars of the first installment was deposited in the Bangladesh Bank account.
Bangladesh has to accept 30 conditions of the organization to take this loan. One of them is to reduce subsidies on electricity and fuel.
Economists believe that this condition is responsible for increasing the price of electricity twice within a month, the price of gas for sectors other than residential and transport has increased two and a half times. Especially if the price of gas for industry and electricity increases, there is a fear that the product price will increase further.
However, the IMF feels that the move to reduce subsidies and raise prices will be positive overall for Bangladesh going forward. This will create more financing opportunities for social and development expenditure.
Another condition of the IMF is to reduce non-performing loans in the banking sector. The government has also agreed to bring down the default loan ceiling to 10 percent in public sector banks and 5 percent in private banks.
The speakers at this year's conference of SANEM discussed the challenges that are being created in the country's economy due to the global crisis and how to overcome them.
In the first session, Sanem Executive Director Prof. Salim Raihan said, "IMF's Tk 470 crore loan is not a political decision, but a turning point." As a result of getting this loan, now other donors will have confidence in Bangladesh. It will be easier for them to get low interest loans.”
Economist Professor Rehman Sobhan said to emphasize four things to fix the country's economy.
He said, "We have to find out which one should be prioritized among the injuries that have come to the macro economy. Emphasis should be placed on how governments and institutions will act in this regard and the impact of these injuries on the regional economic environment.”
Economist Wahiduddin Mahmud said, "The amount of reserves is not a big deal, it is important to note the trend. It remains to be seen how much it goes down in a year or two. If it goes down, it cannot be allowed to continue, once it starts going down, it is difficult for an import-dependent country like us to deal with it within the framework."
One and a half hundred economists from various regions including South Asia are participating in this two-day conference. In the conference, 80 articles will be presented by economics researchers including teachers and students of different universities in 23 sessions.
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