Bangladesh needs 24 bln USD annual infrastructure spending to join middle income club: AIIB report

[Bilal9]

What's with these continuous targeting a particular member without any provocation? Do they really have nothing to get a life?

@Dubious this is not the first time, some other members like @Al-Ansar @Mage have also asked that user to not target @Bilal9 and throw personal attacks but all in vain, the user continues to show his obsession and perhaps, took Bilal9's restraint for granted. I do belief this 'member targeting' is a serious issue that just kills the spirit of a constructive debate.

I don't have time for these people in my life Bhai. 'Ignoring' them is the best option. Don't see their posts and couldn't care less....I guess it is a distraction for some threads such as this one.

But appreciate your standing up for me. Salaam.

 

[Tps43]

Unrequited love is cruel thing!

Definitely it is

 

[bluesky]

Really? If its govt spending, it has to be in the budget right? Basically a govt projects its revenues and spendings...and the shortfall is obviously borrowed (either foreign or local). If there is state level of govt (which BD does not have), same process with them at their level.

Or this infra spending (from loans) is done through private sector purely?

The spending of borrowed money from the foreign sources is shown in the budget. This foreign source of loan is not the same when the govt borrows money from the local Banks or by selling Bonds/Savings Certificates and uses it in the ADP works. Local borrowings are paid back in local currency and the foreign borrowing by the US dollars earned by exporting the commodities.

There is a gulf of difference between the two. Think of the case of Pakistan, the foreign borrowing has reached $95 billion and it is now unable to pay the dollar back because its foreign exchange reserve has dwindled. Now, I ask you why Pakistan is not allowed to pay this money with its Rupee? You have to understand the difference between these two sources of money even though both are recorded in the budget.

However, my point is different. I will have little objection to the borrowing from the foreign source if the public works are done almost by the local companies. But, it is not happening in BD. Local companies must be nurtured instead of depending upon foreign money as well as foreign companies. Can this be called progress?

 

[Nilgiri]

This foreign source of loan is not the same when the govt borrows money from the local Banks or by selling Bonds and uses in the ADP works. Local borrowings are paid back in local currency and the foreign borrowing by the US dollars earned by exporting the commodities.

It should total as same in the end fiscal deficit. You are talking about kind of the difference between primary and fiscal deficit....except delineating by fund source rather than base+interest. Fiscal deficit concerns ALL govt deficit (be it federal or state, latter which I believe BD does not have), whether its local currency or foreign currency borrowing w.r.t govt spending.

As long as the govt is the one involved in writing the checks (to whomever) and acquiring money (from wherever), it has to come up in the govt account book (the projection of which for one year is called the "budget").

There is a gulf of difference between the two.

Yes in the end (and depends on the particular subject at hand) the realised vector intensities in the economic chain are different (given there are more layers added with distance/non-homogeneity that forex basically involves). But it will get summed up in final fiscal deficit...it is still ultimately a borrowing the govt undertakes to meet a projected expenditure....whether it be:

a) foreign based + foreign currency
b) local based + local currency
c) local based + foreign currency (which is an interesting synthesis of the two but largely a govt + central bank interaction)
d) foreign based + local currency (very rare right now for BD case esp at official registered level...so can be ignored)

However, my point is different. I will have little objection to the borrowing from the foreign source if the public works are done almost by the local companies. But, it is not happening in BD. Local companies must be nurtured instead of depending upon foreign money as well as foreign companies. Can this be called progress?

It depends. BD needs to deliver certain important ROI things while its building up its own capacities to deliver them in future. Do I believe its being done optimally in BD? No. But that is more on corruption of the govt etc rather than the concept itself being unsound to progress.

@GeraltofRivia @Joe Shearer @VCheng

 

[bluesky]

It depends. BD needs to deliver certain important ROI things while its building up its own capacities to deliver them in future. Do I believe its being done optimally in BD? No. But that is more on corruption of the govt etc rather than the concept itself being unsound to progress.

No, you are wrong about corruption. It is always there but the politicians in BD would prefer foreign money only because it is easier for them to get the bribe money in dollars outside of the country. In the case of corruption when local money is used it is the local govt engineers who get the bribes in local currency. The politicians do not get the share so they are less interested in projects done with local currency.

 

[Nilgiri]

No, you are wrong about corruption. It is always there but the politicians in BD would prefer foreign money only because it is easier for them to get the bribe money in dollars outside of the country. In the case of corruption when local money is used it is the local govt engineers who get the bribes in local currency. The politicians do not get the share so they are less interested in projects done with local currency.

Well govt engineers is still govt in the end = corruption. Sure it happens at different levels of the gooey bureaucracy...depending if its USD or Taka etc...but the basic thing going on is putting personal greed over everything else...and stealing/misusing money that is not yours. That is corruption.

BD will have to fix it....or stay stuck on crucial capacity building.

 

[VCheng]

It depends. BD needs to deliver certain important ROI things while its building up its own capacities to deliver them in future. Do I believe its being done optimally in BD? No. But that is more on corruption of the govt etc rather than the concept itself being unsound to progress.

The path to development success is well known, but why does South Asia choose to persist in its failures to achieve that by remaining mired in its tried-and-true cesspits of choice? Oh, wait, I know the answer already.

 

[Nilgiri]

The path to development success is well known, but why does South Asia choose to persist in its failures to achieve that by remaining mired in its tried-and-true cesspits of choice? Oh, wait, I know the answer already.

Does it go something like this?:

...protect the loud-mouth haves against the silent, gullible have-nots...

https://defence.pk/pdf/threads/india-fight-back-trump-usa.600049/#post-11145241

 

[VCheng]

Does it go something like this?:

...protect the loud-mouth haves against the silent, gullible have-nots...

https://defence.pk/pdf/threads/india-fight-back-trump-usa.600049/#post-11145241

Something like that, yes. It doesn't really take much of a genius to figure that out, does it?

 

[GeraltofRivia]

It should total as same in the end fiscal deficit. You are talking about kind of the difference between primary and fiscal deficit....except delineating by fund source rather than base+interest. Fiscal deficit concerns ALL govt deficit (be it federal or state, latter which I believe BD does not have), whether its local currency or foreign currency borrowing w.r.t govt spending.

As long as the govt is the one involved in writing the checks (to whomever) and acquiring money (from wherever), it has to come up in the govt account book (the projection of which for one year is called the "budget").



Yes in the end (and depends on the particular subject at hand) the realised vector intensities in the economic chain are different (given there are more layers added with distance/non-homogeneity that forex basically involves). But it will get summed up in final fiscal deficit...it is still ultimately a borrowing the govt undertakes to meet a projected expenditure....whether it be:

a) foreign based + foreign currency
b) local based + local currency
c) local based + foreign currency (which is an interesting synthesis of the two but largely a govt + central bank interaction)
d) foreign based + local currency (very rare right now for BD case esp at official registered level...so can be ignored)



It depends. BD needs to deliver certain important ROI things while its building up its own capacities to deliver them in future. Do I believe its being done optimally in BD? No. But that is more on corruption of the govt etc rather than the concept itself being unsound to progress.

@GeraltofRivia @Joe Shearer @VCheng

Bangladesh has a reasonably good saving rate, which means it should be able to source quite a bit finance internally. At the end of the day, public debt is debt regardless where is sourced and it will show up in government’s balance sheets. However from a solvency perspective, internally sourced debt is considered less risky and more resilient to exchange rate fluctuations which tends to work against the obligor countries in the time of stress.

At the same time, external debt from international development banks can be significantly cheaper than the internal fund (at least solely on interest rate) and have various favorable terms like 30+ years term and grace period which are quite appealing.