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HomeNewsPer capita debt increased by one and a half lakh taka

Per capita debt increased by one and a half lakh taka

According to the Center for Policy Dialogue (CPD), per capita foreign debt has increased by about 50,000 rupees in the last three years. According to the agency, three years ago the per capita debt of people was Rs.
Speakers said these things at a seminar on ‘ Bangladesh ‘s foreign debt and debt repayment capacity’ at a hotel in Gulshan on Thursday . The research institute CPD and Asia Foundation jointly organized this seminar. The chief guest at the seminar was the Prime Minister’s economic advisor. Mosiur Rahman. CPD Executive Pari Cha Lock Dr. Chaired by Fahmida Khatun, Chairman of CPD said. Rehman Sobhan, Honorary Fellow of the organization. Devapriya Bhatta Cha Raya; Honorable Fellow Dr. presented the main article.  Mostafizur Rahman.
Chairman of CPD Dr. Rehman Sobhan says that in the 1980s, many African and Latin American countries were in danger of short-term debt. A recent example is Sri Lanka.  Short term loans are also increasing in Bangladesh , this country is on a dangerous path like Sri Lanka.
Dr. in the original article.  Mostafizur Rahman said, ‘Until a few years ago, our foreign debt was at a tolerable level. If we are not careful now, there could be big problems. However, the fact that the government is cautious is understood from the fact that it went to the IMF for 4.7 billion. During the presentation of the article, he said, ‘Foreign debt is not only  Bangladesh ‘s problem, around 1980, Latin American countries faced such a big problem with foreign debt. The recent debt default of Greece is a prime example. Besides, there are examples of countries like Sri Lanka and Ghana. Internationally, the global reasons for this impact are – Covid-19, the negative impact of the Russia-Ukraine war,  the decrease in demand for goods and services in the world. Internal factors of countries – Debt management is very weak, many countries have taken short-sighted loans.According to the research paper, the United Nations Global Crisis Response Group said that developing countries have taken on foreign debt faster and more than developed countries. This has become a cause of concern in many developing countries. There are many borrowers  , many have defaulted .Among these foreign loans, private sector loans have also increased similarly. At the same time, private sector debt has increased from 47 percent to 62 percent, the economist said.

Dr. highlighted a part of the research of the World Bank.  Mostafizur Rahman said that the foreign debt status of low-income countries has increased by 109 percent, which is 33 percent of the countries’ GDP. Public and Publicly Guaranteed (PPG) debt rose to over $443.5 billion.

Referring to IMF’s warning, he said, IMF has made a report warning these countries. Are we headed for another debt crisis?

According to the CPD, the rate of foreign debt and debt repayment obligations has increased in recent years. In June 2023,  Bangladesh ‘s public and private external debt was $98.9 billion, which crossed $100 billion in September of the same year.

CPD said on the occasion that the composition of the loan portfolio is changing rapidly. The proportion of concessional loans is decreasing, while the share of concessional and  market -based loans is increasing. Loan terms are also getting stricter.

This economist said, ‘With this, debt carrying capacity and debt repayment capacity have created concerns. At the end of the day domestic resource accumulation is important, which has to be considered for repayment of both domestic and foreign debt.’ He also said that a growing portion of domestic resources is being used to pay principal and interest on domestic and foreign loans.

Honorable Fellow of CPD thinks that every person and organization related to the mega project has a financial relationship . Devapriya Bhatta Cha Raya. He said that many large-scale projects have been overestimated and cost increased. Again, some interest groups have been encouraged at the implementation stage within the project.

Dr. Debapriya said that in other countries capital is built up through people’s initial savings, but  in Bangladesh ,  capital is built up by looting people’s money from the stock market through mismanagement and not returning the bank’s money . Private sector capital has also been built up through foreign borrowing projects. It is applicable for various sectors including power, energy.

He said that  oligarchs who accumulate capital have been created in Bangladesh . As a result, the political leaders are not getting the benefits that these projects had hoped for.

Pointing out the increasing trend of the government’s liability from domestic and foreign debt, he said that currently the per capita foreign debt of the government is 3,000 and 10 dollars. And with internal source debt, the total debt of the government stands at eight thousand 50 dollars. After so many years of independence, the government’s per capita debt rose to one lakh rupees, but it doubled in the next three and a half years.While many claim that debt has increased due to Covid, the Russia-Ukraine war and unrest in the Middle East, the real reason is different, the economist said. Highlighting the issue of debt repayment, he said that even in 2018-19, 26 percent of the revenue collected by the government was spent on debt repayment .  But this rate has now risen to 34 percent, where domestic debt is going to 28 percent and foreign debt is 5 and a half percent.

Many claim that there is nothing to worry about foreign debt, but the World Bank, IMF, credit rating agency Modi or Standard and Poor’s  claim that Bangladesh ‘s credit rating is decreasing. godly He commented that the huge amount of borrowed mega project is not able to give real benefits in spite of various negative results including the instability of the macro economy.

Private sector investment has been stuck at 23.4 to 23.8 percent of GDP for over a decade. Why is the success of the last decade and a half not reflected in investment? Why is FDI stuck at 1 percent of GDP? Dr. leaving questions. Debapriya said private sector investment in 2023 has decreased as a proportion of GDP as the government. Apart from this, the rate of people not in education, training or work has increased, the number of unemployed has increased as well as the number of food insecure households. More than 25 percent people take loans for daily needs.

While financing big projects, the education and health sectors have suffered, commenting. Debapriya said that in the last 15 years education has never been allocated more than 2 percent of GDP and health has not been allocated more than 1 percent. He said that negligence in education and health is also reflected in this SVRS report. This economist commented that the parliamentary standing committee is not working properly to solve such problems.

He said, to ensure transparency, the finance minister was supposed to give a statement about the financial situation after three months, but it was not given. Apart from this, he also commented that the Cabinet’s sub-committee on economic matters has become a procurement committee.