Bangladesh govt should not fall for new WB-IMF trick

Editorial, NewAge, October 24, 2007. Dhaka, Bangladesh

The International Monetary Fund has approached the government for a new loan agreement after the expiry of the previous arrangement, reported New Age on Tuesday. The IMF deputy managing director, Takatoshi Kato, made the offer during a meeting with the finance adviser to the military-backed interim government, AB Mirza Azizul Islam, in Washington on Sunday, saying the fund was willing to remain actively engaged with Bangladesh in any form that is deemed ‘suitable and appropriate.’ According to a news release of the Bangladesh embassy in Washington, the IMF also hoped that the government would ‘seriously keep in view the urgent need to contain the rising inflationary trend through appropriate policies which it finds appropriate.’ Mirza Aziz, for his part, sought increased assistance from the World Bank at a meeting with the bank’s vice-president for South Asia, Praful C Patel. The suggestion one may gather from the news release is that the endorsement of the country’s economic policies and the government’s efforts to maintain stability by the lending agencies is a matter of great relief, which is rather infuriating. It is insulting to the intelligence and vision of the policymakers and bureaucrats that the aptness of our policies must be ascertained by agencies that have consistently failed to bring about equitable and wholesome development.

Despite opposition of local business bodies, economists and a section of citizens, the incumbents have unfailingly implemented and adopted policies in line with the preferences of the lending agencies. These decisions – increasing prices of energy and utilities, privatising public enterprises and adopting a precautionary monetary policy, to name a few – have increased the cost of living, created unemployment and given rise to further inflation. In reference to another report published on the same day in New Age, it appears that the incumbents are not satisfied with merely submitting to the will of these lending agencies but are out to ensure that there are no dissenting voices among the bureaucrats either. Badiur Rahman, recently removed from the position of chairman of the National Board of Revenue, at a press conference hinted as much. He claimed that he had recently had differences of opinion with the government regarding prescriptions of the lending agencies.

Thanks to the high export growth and increased remittance flow that shows no sign of reversal, Bangladesh currently has about a $5 billion worth of foreign exchange; and thanks to an unprecedented growth of the GDP, the current overseas assistance is miniscule in proportion to the GDP. A number of academics and a large section of the citizens rightly believe that the country would not be worse off without the loans from the international financial institutions. We believe there are enough resources and the economy has sufficient vibrancy and maturity to survive without the assistance of these agencies that have only spelled disaster for a number of countries across the world and are, therefore, losing ground globally. The incumbents should look towards countries that have made remarkable advances in economic prosperity and human development and look to implement those proven policies instead of those that have proved to invite crises.

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