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.
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.