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IMF loan would help economy gain stability in reserves, dollar market: Experts
Bangladesh is expecting around USD $4.5 billion loan from the International Monetary Fund (IMF) as a precautionary measure and stabilising foreign exchange reserves.
In the wake of a record $30.86 billion trade deficit, remittance inflow falling by 15.12 per cent and current account deficit of $18.70 billion in the recently concluded 2021-22 fiscal, the country is trying to get an IMF loan while two other South Asian countries- Sri Lanka and Pakistan - are struggling for IMF loan to survive their economy.
The two South Asian countries Sri Lanka and Pakistan’s economy are in danger, so they are trying to get IMF loans. The economy of Bangladesh is not in a disaster like them. Sri Lanka is bankrupt, and Pakistan is in dire economic straits. Still, many people ask why Bangladesh has to take an IMF loan.
Bangladesh’s foreign loan burden increased to $93.23 billion till March 2022. The external loan jumped as the government took foreign loans to implement some mega projects.
Read: Inflation hits record 8.9% in euro area, but economy grows
Replying to a query planning minister MA Mannan said that Bangladesh so far has not defaulted on repayment of external loans.
“In South-East Asia Bangladesh’s debt-GDP is around 41.4 percent of which foreign loans 21 per cent. Indian’s loans is 86.8 percent of GDP, Pakistan loans 74 per cent of GDP, Sri Lankan loans 107 percent of GDP and Thailand loans 62 percent of GDP,” he said.
Bangladesh took loans for some mega projects including Padma Bridge rail link being aware of the returns of those projects. The Padma Bridge authority is collecting toll more than they imagined earlier, which is an example of returns, Mannan said.
Regarding IMF loans, he said that Bangladesh sought IMF loans as a precautionary step to keep the economy stable and capable of meeting oil, gas and fertiliser import payments.
He said the current foreign exchange reserve is not in danger and there is no possibility of a crisis here like Sri Lanka. But pressure has been created in the economy due to the global price hike of commodities and energy due to the Ukraine-Russia war.
Floating bridge built by school teacher ends suffering of Lalmonirhat villagers
Ibrahim Ali, 45, the headmaster of Shalmara Ghonapara government primary school, has set a unique example by constructing a 50-foot-long floating bridge on the Sati River with drums and bamboo at Chandrapur union in Kaliganj upazila of Lalmonirhat.
Thanks to Ibrahim Ali’s initiative, around 15,000 villagers, including students, are now able to cross the river using the bridge.
“When no one stepped up to repair the concrete bridge over the river after it collapsed, I decided to build a floating bamboo bridge myself with the help of two or four local people to alleviate the sufferings of people including my students. We used 20 drums and more than hundred bamboos,” said headmaster Ibrahim Ali.
Read: Floods damage 1600 km roads, bridges in Sylhet: Govt estimate
“The bridge cost about Tk one lakh. The concrete bridge on the Sati River has remained collapsed for a year, causing sufferings of the villagers on both sides of the river,” said an employee of Naodabas Dakhil Madrasa Md Ruhul Amin.
Wrongly built embankment in Khulna faces demolition as trees start dying
Hundreds of trees of an afforestation project in Shibsha char are in Paikgachha upazila have been dying due to stagnant rainwater caused by the construction of a town protection embankment in an unplanned way three months ago.
On April 23, 2022, MP of Khulna-6 constituency Aktaruzzaman Babu inaugurated the embankment which was built to prevent saltwater from entering the low-lying areas of Shibsa under Paikgachha upazila of the district.
Within just three months, the embankment has become ineffective, causing water to stagnate inside the dam, and killing trees of the area.
As a result, Upazila Nirbahi Officer (UNO) of Paikgachha has ordered the local municipality to remove the dam within a week.
Paikgachha municipality, which stands beside the Shibsa river, was established in 1997. No dam was built in the area in the last 25 years except the one built in April. During full moon and new moon, water from the river used to swell and enter the locality, inundating households, shops and roads.
Besides, a 20-kilometre area stretching from Khulna Sadar to the Hariya river was being filled up for the last several years by encroachers. To stop this practice, the upazila administration launched an afforestation campaign through which trees were planted on these occupied lands.
While the campaign was successful in preventing land filling by local influential people, it also increased the natural beauty of the area.
Read:Sundarban tigers: Inbreeding leads to generation of weak, diseased cubs
Although water from the Shibsa river can’t enter the dam area, rain water has inundated the entire place, and stagnant water has caused the death of valuable trees planted during the afforestation campaign .
Premananda Ray, a forest official from Paikgachha upazila, said that the upazila administration has planted trees that are usually found in the Sunderbans in the embankment area.
“The lives of these trees are dependent on high tide and low tide. If river water can’t enter the embankment, these trees will die due to waterlogging. Already many trees have started dying. This is why the local authorities should remove the dam immediately,” said Premananda.
Mostofa Kamal Jahangir, President of Paikgachha Upazila Citizens’ Committee, said that the trees would’ve lived if the dam was built alongside the locality instead of in the middle of the river.
Prasanta Kumar Mondal, president of Paikgachha Upazila Citizens’ Right Implementation Committee, said that building the dam was an effort to grab the river.
“Due to the dam, the Shibsa river is losing its depth. Besides, the river is also shrinking, causing its water to overflow and inundate the municipality area. The relevant stakeholders must take prompt steps to change the scenario,” Prasanta said.
Anwar Iqbal Montu, Chairman of Paikgachha upazila, denied his involvement in building the dam in the middle of the river.
Paikgachha Upazila Nirbahi Officer Mamataj Begum said that dams can’t be built grabbing rivers.
“Dams have to be built alongside the town where people live. Dams have to be built in a way so that they don’t harm the rivers and trees,” said Mamataj.
The UNO reaffirmed the fact that she has given the municipality a timeframe of seven days to remove the dam, saying that otherwise the upazila administration will remove it through conducting mobile court activities.
Sundarban tigers: Inbreeding leads to generation of weak, diseased cubs
Due to different barriers to free movement of tigers in the Sundarbans, inbreeding occurs among a small population - compromising the genetic diversity of these big cats which eventually results in diseased and weak cubs. Chief conservator of Forest Department Md Amir Hossain Chowdhury told UNB, “Big rivers like Shibsa, Poshur, and Pangashia are dividing the Bengal tiger into small populations, which result in inbreeding. Inbreeding among tigers with similar genes increases the morbidity and mortality rate of the tigers.” Transferring of the tigers from one population to another inside the Sundarbans can increase their genetic variety, possibility to survive and as a result the number of tigers will rise, he added. Amid the growing concern over extinction facing the tiger, 13 tiger-populated countries including Bangladesh are celebrating International Tiger Day 2022 on Friday with different programmes to create awareness.
Read: Panic after tiger strays into Satkhira village This year’s slogan for the day is "Tiger is our pride, everyone's responsibility to protect”. According to Sundarbans East Forest Department the tiger population may increase in Bangladesh part of Sundarbans in this year’s census, which is good news for environmentalists and animal lovers across the globe. According to a survey conducted in 2018 by camera trapping, there were 114 tigers.
Illegal autos continue to ply in N'ganj on pilfered power
Amid the worsening power situation in Bangladesh, some 50,000 battery-run auto-rickshaws continue plying illegally in Narayanganj on pilfered electricity and that too right under the nose of the authorities.
These auto-rickshaws consume electricity mostly via illegal connections available at roadside garages, according to officials of Dhaka Power Distribution Company Limited (DPDC) that supplies alternating current to the five upazilas of the district.
At a time when discoms are resorting to rationing of electricity across the country to avert an energy crisis in Bangladesh, the authorities have neither been able to crack down on these battery-run auto-rickshaws nor take action against the garage owners.
As per a rough estimate, 30,000 of these 50,000 battery-run-auto-rickshaws ply in Narayanganj, Fatulla, Siddhirganj and port area of the district. The government ban on these auto-rickshaws has failed to yield the desired results, say the discom officials.
If the same estimate is to be believed, each of these auto-rickshaws runs on four to five 12 Volt capacity batteries that cumilatively consume 55 MW of power daily during 5-6 hours of recharge.
A simple calculation will yield the final consumption figure for the 50,000-odd auto-rickshaws -- not to mention that the power pilferage cause a loss to the exchequer.
Read: Battery-run rickshaws continue to operate amid massive power cuts
In 2018, the discom and a task force in separate drives snapped illegal power connections and penalised 50 garages. That was the last such mega drive.
However, Mohammad Main Uddin, the executive engineer of DPDC's Fatullah zone, said, “We regularly conduct such drives against illegal power users and it is a continuous process."
Battery-run auto-rickshaw drivers, on the other hand, said that they would have to endure hardships in case of a crackdown.
"It will be really difficult for me to manage two square meals a day in such a scenario," said Md Rahman, an auto-rickshaw driver in the district town. "The government should think of giving us alternative employment before strictly enforcing such a ban."
Local residents, on their part, said that such auto-rickshaws are the cheapest and quickest way of commuting in the district. "They provide last-mile connectivity," said Badal Rahman, a resident of the Deubhog area of the district town.
Not all are willing to buy the arguments.
Mizanur Rahman, deputy general manager of Polly Bidyut, said that drives against illegal power users should pick up now "as we consider such use as waste of power".
"Not only the source of pilfered electricity, the government should take strict action against the operators of these battery-run auto-rickshaws," he said.
For the first time, Bangladesh has more women than men
Bangladesh has witnessed a major demographic shift since record-keeping began in the country, with females outnumbering males for the first time in a population census.
Of a total population of around 16.5 crore recorded in the latest census, 81,712,824 are males and 83,347,206 females -- which means that for every 100 females, there are 99 males. The transgender count, on the other hand, is 12,629.
This has happened for the first time in the history of independent Bangladesh and that too under a female Prime Minister who has undertaken a slew of measures for gender equality and women empowerment since coming to power.
The provisional data of the '6th Population and Housing Census 2022' was revealed by the Bangladesh Bureau of Statistics (BBS) at a presser at Bangabandhu International Conference Center in Dhaka on Wednesday.
The Census was supposed to end on June 21 but due to floods in the north-eastern districts, it continued till June 28.
Read: Population Census gives right picture of country: Dipu
Except Muslims, the population of other religious communities has decreased in the country, according to the preliminary report of the Census that has pegged the country's exact population figure at 165,158,616.
While Muslims constitute 91% of the population, Hindus are 7.95% -- a decrease from the 2011 census when it was pegged at 8.54%. The Buddhist population has also decreased to 0.61% in 2022 from 0.62% in 2011.
Jatiya Sangsad's speaker Shirin Sharmin Chowdhury, Planning Minister MA Mannan, State Minister for Public Administration Farhad Hossain and State Minister for Planning Shamsul Alam were present on the occasion.
As per the report, the average annual population growth rate in Bangladesh is 1.22%. The average population growth rate in the 2011 census was 1.37. The population density has increased to 1,119 people. In the last census, it was 976.
The signature (people able to write) rate population has increased to 74.66% from the previous census figure of 51.77%.
Similarly, 55.89% of mobile phone users are aged over five years. The number of internet users is 30.68% of the total population.
Now, the total number of restaurants in the country is 4.10 crore. In the last census, it was 3.21 crore. The number of families -- with four members -- is now 4.10 crore.
A modern international standard medical education system is on the anvil: Official document
The government has taken up a series of measures to make the country’s medical education more modern and time-befitting and of international standard.
As a part of it, according to an official document, much importance is being given to higher investment and higher training in medical education.
The document mentioned that confronting all the challenges to achieve the targets the government will give priority to activities such as bringing all the Post- Graduate Medical Education degrees under one platform and modernisation of examination system.
It will also maintain continuous training of the teachers, giving more emphasis on research by the medical education teachers and developing the quality of education in non-government sector.
The government is implementing various development activities in health, nutrition and population sector according to the Perspective Plan, National Health Policy and 8th Five Year Plan.
The government is continuously trying to ensure quality service at non-government medical colleges, medical education and training institutions, to keep the education expenses within the reach of the population, to modernise of nursing education and to keep it updated according to the need of the country.
Read: Steps underway to reopen educational institutions: Hasina
For the development of nursing college, as per the document, the government will complete Dhaka Nursing College accreditation.
The activities are going on to establish a medical university in every division and transforming the Nursing Institute into a Nursing College.
For the development of medical education, steps have been taken to establish simulation lab in eight medical colleges.
In order to form a base for fundamental and action research in the medical science sector in the country and to use this knowledge in health service, health education, public health, microbiology, pathology and disease control sector, the government has created an ‘Integrated Health-Science Research and Development Fund’ of Tk. 100 crore.
To use this fund properly ‘Integrated Health-Science Research and Development Fund Use Guidelines 2020’ has been prepared and according to this guideline a national level committee has been formed.
In the FY2021-22, a total of 23 researchers/research institutions have been selected for starting their research works.
Read: Meeting on reopening educational institutions Sunday
An amount of Tk.100 cr has also been allocated to this fund in the running 2022-23 fiscal year.
The document further mentioned that the government has taken up various priority-based activities for the development of mother and child health care under the 4th sector programme.
This includes the training of the doctors on maternity health care services, the training of the field-level workers on ‘community-based skilled birth attendant’, providing integrated services.
The government has taken up various priority-based activities for the development of mother and child health under the 4th sector programme.
This includes the training of the doctors on maternity health care services, the training of the field-level workers on ‘community-based skilled birth attendant’, providing integrated service for the pregnant women, the expansion of the ‘Mother Health Voucher Scheme’, the early detection of cervical and breast cancer.
The government has introduced a three-year Midwifery Course and created 3,000 Midwife posts. Recruitment against the newly created posts is going on.
‘The Development of Child and Mother Health and Health Management System’ project is being implemented.
Now the Comprehensive Emergency Obstetric Care Service is being provided in all medical college hospitals of the country, in 59 Zilla hospitals, in 132 Upazila Health Complexes throughout the country, and in the rest of the Upazila Health Complexes the “Basic Emergency Obstetrics Service’ is also available.
A 200-bed Mother and Child Health Training Institution has been set up at Lalkuthi, Dhaka.
To expand health service up to the grass-root level of the country the government has established 102 10-bed Mother and Child Welfare Centre at Union level, and another 57 centres are under construction.
The government is working to provide adolescent health service. For this, ‘Adolescent Friendly Health Service Corner’ has been set up in 1103 service centres.
For proper physical and mental development of the adolescents, service and information are being provided through 603 ‘Adolescent Friendly Health Corner’ at Union Health and Family Welfare Centres and at Mother and Child Welfare Centres, the document said.
Acute hardship plagues lives of earthen stovemakers in Bagerhat
Artisans manufacturing earthen stoves beside the Bhairab river in Bagerhat are finding it hard to earn a livelihood, compelling them to request the government’s support.
The artisans, mostly women, have been manufacturing earthen stoves beside the Bhairab river for a very long time. They collect alluvium from the chars that emerge in the river and use it to make stoves. Besides making stoves, they also sell their produce at the riverbank.
Read: Govt braces for hefty capacity charges for 5,350 MW of upcoming electricity likely to remain idle
Earthen stoves are part of the long-running tradition of rural Bengal. Although a lot of time has passed, earthen stoves have kept their appeal intact. Those who use timber for cooking still rely on earthen stoves for food processing.
Besides villages, earthen stoves can be found in cities too, especially during winter when small traders are seen preparing cakes on the streets. An earthen stove costs Tk 150 to Tk 500 depending on size, much lower than gas stoves, which is also a reason why earthen stoves are still being used by many.
Govt braces for hefty capacity charges for 5,350 MW of upcoming electricity likely to remain idle
In next six months several private producers will be ready to supply 5,350 MW of electricity to the national grid under agreements with the government. You are wrong if you think it’s going to ease the ongoing power crisis in the country.
Worse still, the state-owned Bangladesh Power Development Board will have little use of this new electricity even though it is likely to pay in crores of taka in capacity charges to the producers further bulging the government’s spending on available but unused power.
Capacity payment is considered a penalty for the BPDB as the government fails to purchase the power available with the power plants for supply to the national grid under agreements. The government has recently been under fire from energy experts for continuing with the capacity payment for idle electricity amid rising economic problems.
As per the government’s power purchase agreement (PPA) with the private producers, the entire payments will be made in foreign currency mounting a new pressure on declining foreign exchange reserves, official sources said speaking on condition of anonymity due to the subject’s sensitivity.
Also read: Battery-run rickshaws continue to operate amid massive power cuts
According to the sources, despite an improvement in payment the government still owes $1.5 billion to the private power plant operators for purchase of electricity. This arrear bills may increase as a fall-out of the new arrivals. The sources said, of the 5,346 MW electricity, scheduled to be added to the national grid from November 2022-to February 2022, some 1,600 MW will come from Adani Group’s coal-fired power plant in the Indian state of Jharkhand, 620 MW from Rampal Power Plant, 1224 MW from S Alam Group’s power plant in Bashkhali of Chattagram, 718 MW electricity from Reliance Power LNG-based Plant in Meghnaghat and another 600 MW from LNG-based GE-Summit power plant in Meghnaghat, and 584 MW from LNG-based Unique Group’s power plant in Meghnaghat.
Forex reserve: Why $10 billion in 2010 was not a worry, but $40 billion today is
Economists have expressed concern just after Bangladesh’s foreign exchange reserves slipped below $40 billion, even though that should be capable of meeting three months import payments, based on imports for the immediate past fiscal.
Such concern was not seen 12 years ago, when Bangladesh’s forex reserves were only $10.60 billion in the FY2010 (2009-10 fiscal).
That is roughly the same level, since imports back then were also lower, at around $23 billion, meaning the reserve was enough to cover 4-5 months.
What is worrying now is a surge in imports driven by both demand for raw materials by export-oriented industries and growing consumption among the domestic consumers.
That, allied to an energy crisis caused by both domestic and international factors, is causing significant downward pressure on the forex reserve. Bangladeshis were used to hearing about the reserve rising gradually, reaching a peak of $48 billion a year ago.
But now, these two factors have combined to bring the reserve down quite rapidly below $40 billion, and it is likely even lower, given that exporters have started defaulting on dollar loans taken out of the Export Development Fund, which is funded out of the reserve.
Many economists now believe that foreign exchange reserves in Bangladesh have gone to dangerous levels.
Read: Forex reserves drop below $40 billion for the first time since 2020
They say, now that the reserves have fallen below $40 billion dollars, it is not possible to cover more than three months of import expenses.
Talking with UNB, Dr Debapriya Bhattacharya of CPD said how much in foreign exchange reserve is secure for a country depends on the price of energy and commodities in the global markets, dollars required in a month to meet import payments, and whether the demand for import will go up in the coming months or not.
Though the Bangladesh Bank (BB) is showing forex reserves near $40 billion, unencumbered reserves is actually around $31 or $32 billion after excluding dollar support to the export sector (the Export Development Fund is worth $7 billion), he said.
Dr Debapriya said the government is taking the right measures to face the situation, but it is not enough considering the global and domestic situation.
He suggested taking a loan of $1.5 or $2 billion from the IMF as a cautionary step to avert any worsening situation.
Debapriya also pointed out that the current situation (depreciation of taka) would create some opportunities to boost exports and encourage expatriates to send remittances.
But the overall macroeconomic stability has undoubtedly weakened. There is a danger of slowing down the ongoing development activities in the country.
However, the government does not consider the situation to be critical yet. To reduce the pressure on reserves, several cost-effective measures, including load shedding in the power sector, have been taken so that the cost of fuel imports can be kept under control.
The central bank is also dismissing economists' concerns about current forex reserves.
Md Serajul Islam, executive director and spokesperson of BB, said that if the reserves are enough meet the import expenses for three months, there is no danger.
"The reserves we have now will cover more than three months of import expenses. Now we have increased the import duty on all luxury goods. Hopefully, we will reap the benefits," he added.
Bangladesh’s import expenses grew to $80 billion in the immediate past fiscal, but even then, $40 billion should be enough to meet the Bangladesh Bank benchmark of 3 months, and possibly up to six months (half a year).
The inward remittance flow also slipped to $21 billion in FY 22 from $24.77 billion in FY 21.
The real concern stems from the fact that there are now issues beyond the government’s control at play. With gas reserves dwindling fast, Bangladesh has suddenly become highly dependent on energy imports, and their prices have been rising to record levels in the international market, with a pandemic-ending rally exacerbated by the war in Ukraine.
Bangladesh was forced to sit out two rounds of purchasing LNG on the international market recently due to exceptionally high price, and that directly led to the country’s energy crisis, as production of gas from the country’s own gasfields is nowhere near enough these days to meet demand. That led to the return of load shedding.
There is also the issue of export income not being fully repatriated to the country. Besides, the garment sector also imports 60 percent of its export volume.
In the face of all this, the government’s steps to cut imports of luxury goods is also a step in the right direction. But whether they will be enough, only time will tell.