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Fiscal policy should be designed to steer Bangladesh through crisis: Toufique Khalidi

  • Staff Correspondent, bdnews24.com
    Published: 2022-05-20 01:31:36 BdST

bdnews24
A woman bought products after waiting for a long time at Mirpur Rd 14 in Bhashantek on Sunday, Mar 6, 2022. Photo: Asif Mahmud Ove

bdnews24.com Editor-in-Chief Toufique Imrose Khalidi has advised the government to strengthen its economic capacity in line with the global economy which is facing a sharp slump.

He made the recommendation during a pre-budget discussion with Finance Minister AHM Mustafa Kamal on Thursday evening.

“The fiscal policy, I believe, should be designed to restore confidence in our economy – and strengthen the government’s ability to tackle any future crisis.”

“There has to be a fiscal blueprint to steer Bangladesh through this crisis — this is going to be a period of uncertainty and austerity. We just can’t spend the way we used to in the previous years,” Toufique Khalidi said at the discussion.

Newspaper editors and a good number of senior executives of the electronic media attended the discussion.

Emphasising how the poor have been suffering from a sudden inflation and price hike of essentials, Khalidi said people expect the government to come up with solid plans to protect them from “price shock.”

In his speech, the chief editor of Bangladesh’s largest news publisher showered the Sheikh Hasina administration with the highest accolades for the Padma Bridge, which he described as an “important and absolutely necessary” project for the country and proved “Bangladesh’s financial resilience.”

However, highlighting the examples of Sri Lanka and Pakistan, which are on the brink of total economic collapse, the senior journalist has asked the government to err on the side of caution regarding other major ongoing projects.

“The cost of this huge infrastructure [Padma bridge] has since gone up nearly three times. Questions have been raised and will continue to be raised. I am sure you will address those questions. It’s very important, the governmental accountability.”

He also put forward his two cents regarding the proposed budget, by underlining the importance of taxing the rich more and stressing the necessity of a new stimulus package, like during the pandemic years.

Toufique Khalidi also asked the finance minister to take the climate change and extreme weather conditions into account while proposing a budget as these two elements, in his opinion, will determine “how much the food on our platter will cost in the coming months”.

Highlighting the downturn in the value of the taka against the US dollar, the

bdnews24.com editor-in-chief also advised the finance ministry to take more measures to arrest the currency sliding further against the greenback.

“Our reserves have for long been at a comfortable level … there are signs now emerging that we need to be very careful on this front too. Already your [AHM Mustafa Kamal] ministry has taken certain steps in the past few days, which means you are ready to go further, you are aware and you are ready and you will do more,” he said.

In conclusion, Toufique Imrose Khalidi said he believes the government is capable of making the tough calls and adjustments the economy requires at the moment and wished Kamal all the best for his budget proposal.

The parliament’s budget session will kick off on Jun 5.

ACCOUNTABLE, TRANSPARENT BUDGET: KAMAL

The finance minister said he would take into account everyone’s advice and draw on past experience to design the next budget. “We’ll work harder. Our budget will be responsible, accountable and transparent.”

He said he would prioritise the marginal population in the budget. “We want to go forward taking everyone with us, not leaving anyone behind. We’ve always prioritised the marginal people, agriculture, job creation and the Made in Bangladesh idea.”

“We’ve been providing the locally made products with strong fiscal support because we want industries to develop and our boys and girls to work there.”

Kamal tried to allay the fears of depleting foreign currency reserves with remittance inflow making little or no improvement for quite some time.

“It’s said that remittances are going downward, but actually it’s not true. We took it to $24 billion [annually] from $14 billion a decade ago. Now it has decreased to $21 billion.”

“Fuel prices are increasing. But we won’t put all the pressure on consumers. However, it’s very difficult to tackle so many vulnerabilities at a time.”

Amid an unprecedented economic crisis, Sri Lanka has defaulted on debt for the first time in its history. Many in Bangladesh fear the country may plunge into a similar crisis if it does not move cautiously.

Kamal dismissed the fears. “The loans we’ve taken are 34 percent of our GDP, the lowest in the world.”

“And 77 percent of our debts are soft loans from the World Bank, ADB, JICA and other similar agencies, but Sri Lanka borrowed from commercial banks. All of their loans are hard loans.”

Bangladesh’s external debt stood at $90.8 billion by the end of December. Kamal said, “We’ll get $2 billion in remittances this month while the requirement for loan servicing will be $2.4 billion this year, $2.8 billion [in 2023], $3.3 billion in 2024 and $4 billion in 2025. So, we’ll be able to make annual payments with remittances of two months.”