Bangladesh is being punished for prudent debt management and cautious trade transactions during the period of global recession, said finance minister AMA Muhith at the joint annual discussion of the World Bank and International Monetary Fund held in Istanbul on Wednesday.
The punishment for good performance and prudent debt policy is an issue that cannot be neglected any further, the minister said.
"The country is forced to borrow costly short-term money to finance essential imports such as fuel, fertiliser or food and undertake their development effort at a lower level of their potential," he said at the meeting.
Asian Development Bank is going to lend Bangladesh $500 million at a high rate to face global financial crisis.
"The response of the global system to the present crisis is extremely slow and very limited but the regional development banks, however, are doing much better in extending helping hands to the low income countries," he added.
The World Bank has yet to start operations directed at anti-cyclical measures in its member countries and there is very little of trade financing from any quarter although global liquidity is at very comfortable level, Mr Muhith said.
Bangladesh cannot qualify for debt reduction nor can they get any IMF support for trade financing although they have no balance of payment crisis, the minister said.
Economies like Bangladesh need grants and concessional loans that are now available at much reduced levels and secondly rapid commitment of external assistance without elaborate conditionalities, he said
International financial institutions have to consider a "minimum convergence criteria" principle in place of the antiquated conditionalities to guide their programmes in low income countries, he suggested.
The country has been experiencing a gradual decline in export earnings and volume of manpower export, he added.
Remittance receipts have not been affected yet mainly because of improvement in the system of money transfer but revenue collection has slowed down and investment is not progressing at all, Mr Muhith said.
Gigantic moves and bold undertakings in the area of infrastructure development demands the support of the development partners and foreign direct investment, he said.
The minister also said infrastructure bottlenecks of the past and the dismal situation with the supply of energy and power are holding the economy back.
He, however, admitted that implementation weakness is the Achilles' heel next only to the energy crisis and sought support of the global community in this regard.
The minister said the situation has been further complicated by the threat of climate change and environmental hazards being faced especially by the low-income countries. |
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