News and Update: Rights group demands scrapping of foreign loan liability and demands perliamentary oversight

Staff Correspondent, NewAge, October 7, 2007

A rights group has demanded cancellation of the liabilities of all loans the successive governments had taken from global lenders to stop repayment of more than $700 million debt every year and spending more money in pursuing the UN Millennium Development Goals.

The Equity and Justice Working Group, at a seminar in the city’s CIRDAP auditorium on Saturday, also demanded formation of a mass audit commission to investigate the modality of signing loan agreements with the multilateral lenders as well as disbursement and use of the funds.

Workers Party of Bangladesh president Rashed Khan Menon, BNP Standing Committee member Mahbubur Rahman, Jatiya Party leader GM Qader and one of the joint general secretaries of Awami League, Mahmudur Rahman Manna, seconded the demands.

They as well as development activists taking part in the discussion said any government would have to take the consent of the parliament to sign the loan agreements and use the borrowed money for development of the people. To ensure accountability of taking and using such loans, amendment to the constitution is needed, they added.

‘All our overseas loans are illegal as none of them has been rubberstamped by the national parliament. From now on, any loan agreement must have the backing of the parliament,’ said Mohammad Shamsoddoha in a paper prepared jointly with Rezaul Karim Chowdhury.

In the paper titled ‘Liability of Overseas Development Assistance and a Loan-burdened Bangladesh’, they pointed out that while the country needed $7.5 billion foreign aid every year to attain the major targets of the global goals, it had received $1.4 billon on an average in recent years.

Bangladesh spends 48 per cent of its yearly debt servicing money for repaying the World Bank loans, 26 per cent for the Asian Development Bank loans, 11 per cent for the International Monetary Fund loans, and 15 per cent for loans taken from other lenders, the paper said, adding that disbursement of foreign aid had declined by 37 per cent by 2006 from the level of 1999.

‘We will not pay back the loan amounts and we have to come out of the bondage. It’s our right to get access to overseas loan since colonial power plundered our resources,’ Menon said, referring to the resurgence of anti-imperialist movement in the entire Latin America in recent times.

‘We will not repay the loans, no matter whether they give us fresh loans or not,’ Qader said, reiterating some economists’ conviction that Bangladesh needed foreign aid, but not desperately, to harness its development goals.

‘We are not willing any more to become burdened with loans. It is hardly likely that Bangladesh will be entitled to debt relief like the ones extended to Iraq or Nigeria,’ Faruq Ahmed, president of the Media Foundation for Trade and Development, told the seminar, moderated by Rafiqul Islam Khokon, coordinator of the Equity and Justice Working Group.

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