By: Hafizur Talukdar
A few years ago, debt-ridden Bangladesh is now a country of unprecedented success in debt relief. The world today looks at Bangladesh in amazement. Bangladesh only borrowed from other countries or organizations. Now that history has changed and has started lending. Bangladesh has provided loans to Sri Lanka and Sudan. Bangladesh first loaned a country by providing the first tranche of the loan pledged to Sri Lanka in August. Once upon a time there was a “bottomless basket” and an international donation seeker. It is now a lender country. It shows countries across South Asia how to rise from the ashes. Bangladesh is leading by example in South Asia of how to achieve economic growth amid various socio-political aspects.
Overcoming various hardships, Bangladesh is today a confident and promising country. Today, Bangladesh has climbed to the top of all economic indices. When the 10 on-going megaprojects are completed, the country’s economic growth trend will increase and prosperity will increase. It shows countries across South Asia how to increase their growth in the midst of various adversities.
The economy of Sri Lanka, a South Asian island nation, is currently under severe pressure from civil war injuries and additional foreign loans for development projects. At present, the country’s foreign exchange reserves have fallen to $ 4 billion. Meanwhile, amid the epidemic, Bangladesh’s foreign exchange reserves have hit the $ 45 billion mark.
The Prime Minister of Sri Lanka was accompanied by the Governor of the Central Bank of Sri Lanka in Dhaka last March to attend the celebrations of the centenary of the birth of Bangabandhu. At that time, they made a proposal to Prime Minister Sheikh Hasina in this regard. After the Prime Minister accepted the proposal, the Sri Lankan government sent a formal proposal to the Central Bank. Then, in May, the board of directors of Bangladesh Bank approved in principle a 250 million loan to Sri Lanka under the currency swap.
The Bangladesh Bank released 50 million in the first installment on August 16 based on Sri Lanka’s request. Bangladesh entered the list of lending countries by waiving this loan. And on, the second tranche of 100 million was released in June 2021. This money comes from the foreign exchange reserve of the Bangladesh Bank.
Reserves are over 46 billion after a 100 million haircut in favor of Sri Lanka in June. With Bangladesh’s current foreign exchange reserves, it is possible to cover import costs for more than eight months. Bangladesh ranks second among South Asian countries in terms of foreign exchange reserves. Bangladesh is donating dollars this way for the first time. The number of dollars that Bangladesh donates will be reduced from the reserve. It will make Bangladesh famous.
Sri Lanka has suffered from a foreign exchange reserve crisis in recent times. At that time, they only had $ 500 million in foreign exchange reserves. With this reserve, it was not possible to meet their import expenses for three months. In order to maintain risk-free reserves, at least three months of import spending must be kept equal.
For the first time in 50 years of independence, Bangladesh granted a loan to a country for the development of the country or to meet various needs. Bangladesh was on the list of lenders by lending Sri Lanka 50 million.
Over the past decade, Bangladesh has gained this lending capacity due to enormous economic development, increased exports and increased expatriate incomes as the country’s foreign exchange reserves have swelled. Economists hope this will change the image of the country. And Sri Lanka will receive a total of $ 250 million. This money will be released in 5 installments.
Sudan, an African country, is unable to repay a loan from the International Monetary Fund (IMF). Bangladesh took responsibility for repaying this loan.
This information was highlighted in a notification from the Ministry of Finance on June 16, 2021. Previously, Bangladesh had granted similar benefits to Somalia, another African country.
Sudan’s external debt has skyrocketed to nearly $ 50 billion at the end of 2019. The IMF is known to get US $ 6 billion from Sudan. In other words, 5 lakh 10 thousand crore Takas in Bangladeshi currency. When the IMF called on all of its members to support the country in debt repayment, almost everyone responded. As a friendly country, Bangladesh has also agreed to cooperate with Sudan. In response to the IMF’s appeal, Bangladesh granted Sudan a Taka Taka 65 crore ($ 650 million) loan waiver on June 15, 2021
The next day, Wednesday, the finance ministry said in a statement that in response to the IMF’s appeal, Bangladesh had granted Sudan Tk 65 crore “debt relief”.
“Sudan is a very indebted and poor country,” the finance ministry said in a statement. The government hopes that the funding will strengthen Sudan’s fight against poverty.
Bangladesh has started to prove its economic potential in a very spectacular way. At one time the country was very poor. So US Secretary of State Henry Kissinger has declared Bangladesh to be a bottomless basket. After 46 years, according to the American media Bloomberg, Bangladesh is now an address of surprising success. The country’s per capita income is now US $ 2,500. He is ahead of India. At present, the per capita income of India is $ 2,116. Pakistan is far behind. The per capita income of the country is $ 1,260. Currently, Bangladesh has 45 billion foreign exchange reserves.
However, what happened to cause Bangladesh to create one surprise after another? Economists say there are reasons for this. Exports, social progress and economic forecasting. There are three other reasons besides economic capacity. Sympathy, economic diplomacy and political will.
When this was the case, the sudden news came that Bangladesh had provided 200 million euros in financial assistance to Sri Lanka. Sri Lankan media have raised the question of whether Bangladesh can be self-sufficient, why can’t we? In June, the Bangladesh Ministry of Finance gave more surprising news. Bangladesh is said to support Sudan, the poorest country in Africa. Bangladeshi taka 65 crore was provided to reduce the IMF debt burden. The country borrowed Rs 510,000 crore, Taka, from the IMF. The economic crisis was so severe that the country could not repay the debt. Bangladesh has come forward after sending messages asking for help from country to country. Bangladesh Ministry of Finance says Sudan is heavily indebted and poor. The government hopes that the funding will strengthen Sudan’s fight against poverty. At one time, Sudan was a British colony. The country gained its independence on January 1, 1956, by virtue of a treaty. Recall that last year, Bangladesh also provided over 80 million Tk to Somalia, another African country. It was also to repay the IMF loan. Sudan, a member of the Organization of Islamic Cooperation, or OIC, is crippled by debt and poverty, and financial assistance is expected to help overcome the crisis.
Bangladesh last year also donated Tk 80 million to help Somalia fight poverty under the IMF initiative. Everyone is fascinated by the development of Bangladesh.
Bangladesh’s image and respect for the people of that country has grown thanks to aid to Sri Lanka and Sudan from foreign exchange reserves. Now the question is valid. Bangladesh is now a lender country! If Bangladesh can be a self-sufficient, lending economic miracle in South Asia, why can’t others? Why isn’t South Asia taking lessons from Bangladesh? Of course, South Asia can learn a lot from Bangladesh.
The writer works as a teacher at a local school in Dhaka