FY21 foreign debt to surge to Tk 4.4 lakh crore ($52.38 billion)

[bluesky]

https://www.newagebd.net/article/106610/fy21-foreign-debt-to-surge-to-tk-44-lakh-crore

FY21 foreign debt to surge to Tk 4.4 lakh crore ($52.38 billion)
Shakhawat Hossain | Published: 00:11, May 17,2020




The country’s external debt will jump to Tk 4.4 lakh crore in the new fiscal year from Tk 3.7 lakh crore in the outgoing fiscal year due to the spike in short-term borrowing and receiving suppliers credits for development projects.

According to the ministry of finance’s Medium Term Macroeconomic Policy Statement FY20–FY22, a whopping Tk 68,020 crore would be added to the country’s external debt portfolio in 2020–21 beginning from July 1.

In the outgoing fiscal year, Tk 47,180 crore was projected to make entry into the country’s external debt portfolio.

The amount was TK 54,070 crore in 2018–19.

Economic experts have attributed the steep rise in the external debt to the spree of resorting to costly short-term loans and suppliers credit to implement development projects.

Despite the surge in the country’s overall external debt it is at a tolerable level, said Economic Relations Division officials.

Newly-appointed ERD secretary Fatima Yasmin said that the ratio of external debt to the GDP was hovering around 13 per cent until last year, much below the danger level of 50 per cent.

According to the Bangladesh Bank, the external debt repayment amount has been increasing over the years and stood at $1.59 billion in the FY2019, from $1.4 billion in the FY 2018 and $1.1 billion in the FY2017.

Besides, there are many projects being implemented by state-owned entities with loans guaranteed from the government of Bangladesh.

The value of guarantee and counter-guarantee was Tk 52,2250 crore as of June, 2019, with the power sector alone accounting for 71.1 per cent of the contingent liability.

The Power Division projects include the controversial Rampal 1,320MW coal-fired power project near the Sunderbans being implemented jointly by Bangladesh and India at a cost of nearly $2 billion.

The Rampal coal-fired power project is implemented by ignoring the UNESCO request for suspending it and the protests from local and international experts and green activists.

Jahangirnagar University economics professor Anu Muhammad said that many projects, including the Rampal project and the Roopour Nuclear Power Plant with loan from Russia, would turn into liabilities for the nation.

The projects have been undertaken only for serving political interests, he commented.

In addition to the annual loan amortisation, the county is facing an annual remittance outflow of around $5 billion and suffered some yearly capital flight of $7.4 billion on average in 11 years until 2015 as per an assessment by the Washington-based Global Financial Integrity in 2019.

Having mainly through under- and over-invoicing, economic experts noted, the capital flight might have been linked to the steep rise in the defaulted loans crossing over one lakh crore taka in the country’s banking sector.

Former chief economist of the World Bank Dhaka office Zahid Hussain said that the nation received some benefit from the remittance outflow by utilising services of Indians and Sri Lankans in the growing manufacturing sector.

But there was zero benefit from the capital flight as the country’s surplus fund, ie savings, generated by the labour of millions of marginal people, was smuggled out, he said.

Policy Research Institute executive director Ahsan H Mausur said that the sharp rise in the external borrowing posed many risks because many projects were undertaken without proper feasibility studies.

Such projects often failed to pay expected dividend due to the cost escalation and the delay in implementation. In the long run, the nation might face debt distress as a result, he said.

The Bangladesh Bank’s ‘Financial Stability Report 2018’, released in May 2019, highlighted that the short-term external debt was in a rising trend and stood at 4.5 per cent of the GDP in 2017–18 from only 1.3 per cent in 2011–12.

The size of the country’s GDP grew to Tk 22,38,498 crore in 2017–18 with its one per cent being Tk 22,384 crore.

The BB report also highlighted that long-term borrowing was declining until 2016–17, followed by a marginal increase in 2017–18 to stand at 15.5 per cent of the GDP.

 

[mmr]

Wonder how much of it went to BAL ministers and hasina's family members.

 

[Nilgiri]

Wonder how much of it went to BAL ministers and hasina's family members.

For just a cpl billion dollars (at most) of sleaze status quo+expansion, these ppl collapsed 40 billion USD from Bangladesh market cap in just one year time (though some of it was also bubble done by same people...surprise surprise). After all a huge deal of market cap utility is what you can leverage your internal debt on much more better than foreign loans+forex.

Unreported + unanalysed story still! You can guess why.

Just think how much effect thats going to have on BD for this decade. Maybe you get full story after the crooks+cabal are somehow removed and maybe some other crooks+new cabal have some gain to expose the details regarding this.

You are young, thus you can wait and see later in life for it.

 

[mmr]

For just a cpl billion dollars (at most) of sleaze status quo+expansion, these ppl collapsed 40 billion USD from Bangladesh market cap in just one year time (though some of it was also bubble done by same people...surprise surprise).

Unreported + unanalysed story still! You can guess why.

Just think how much effect thats going to have on BD for this decade. Maybe you get full story after the crooks+cabal are somehow removed and maybe some other crooks+new cabal have some gain to expose the details regarding this.

You are young, thus you can wait and see later in life for it.

Too bad some people wont accept the truth and act blind.

For me i just feel bad for average bd ppl. Who probably dont even know any of this. But waiting for nasty surprises later this decade.

 

[Nilgiri]

For me i just feel bad for average bd ppl. Who probably dont even know any of this. But waiting for nasty surprises later this decade.

Yup, as much I don't like some crew of BAL-bravado-elitist members here (Bhadrolok As @bluesky has called)... I bear no ill will to average BD person, or average person anywhere in the world who are just trying to get from day to next day and eke out some pittance and existence in this world so their kids have better future hopefully.

We of course feel extra bad when its our countrymen in end, since we relate to them lot more too....we thank our stars for we easily could have been there too....instead of having this far lofty vantage point. You are correct to feel bad for them, but lets hope and wish for the best...if almighty sees it in his grace and wisdom (in great plan) to bequeath all peoples with better chance and future.

 

[bluesky]

Wonder how much of it went to BAL ministers and hasina's family members.

So what if BAL ministers steal money, our BD nuts in the PDF will celebrate how good the economic shape of BD is by comparing with the Pakistan debt at $95 billion dollars. However, Pakistan accumulated the debt in 72 years and BD successfully accumulated this $53 billion debt in only 50 years.

BD's highly educated bureaucrats steal more actively than half-educated ministers. All send the stolen money to their sons and sons-in-law living in luxury in NY City. Go visit some of the eateries there, you will find them in the evenings doing nothing the whole day and talking big the whole night.

Since the target is stealing money, therefore, this minister/bureaucrat group joins hand to prepare Prestige Projects that would bring in foreign money and contractors who are required to deposit their Bakhra in certain foreign banks.

 

[mmr]

So what if BAL ministers steal money, our BD nuts in the PDF will celebrate how good the economic shape of BD is by comparing with the Pakistan debt at $95 billion dollars. However, Pakistan accumulated the debt in 72 years and BD successfully accumulated this $53 billion debt in only 50 years.

BD's highly educated bureaucrats steal more actively than half-educated ministers. All send the stolen money to their sons and sons-in-law living in luxury in NY City. Go visit some of the eateries there, you will find them in the evenings doing nothing the whole day and talking big the whole night.

Since the target is stealing money, therefore, these two groups join hands to prepare Prestige Projects that would bring in foreign money and contractors who are asked to deposit their Bakhra in certain foreign banks.

Debt would be good if they used it properly. But half of it goes on corruption.

 

[bluesky]

Debt would be good if they used it properly. But half of it goes on corruption.

Yes, you are right to the point. Some infrastructure projects are certainly needed. But, the country must prioritize them depending upon the revenue and export earnings of today and a little ahead. Most of the money should better be invested to develop industries by the private people other than solving waterlogging, bridge and road re-construction/widening etc. These are all public projects.

However, private people are equally thieves as the ministers/bureaucrats are. They borrow and do not pay back. Instead, they buy prime lands in Dhaka making them very expensive. However, some of our PDF brats were celebrating the high price the other day by talking as if Dhaka can now be equated with London, Paris, NY and Tokyo just because some apartments are very expensive.

This similar thing I noticed in Lagos/Nigeria. It exports oil and build many prestige projects by foreigners that they are unable to upkeep and maintain. When food prices there in the eateries are more expensive than in Tokyo, their normal people have little means to earn money and survive.

BD people are surviving only because the textile money is quite equally disbursed because this industry requires many hands.