Even developed nations are struggling: Bangladesh PM on global recession

The premier also said that the government is trying hard to maintain the economy, but everyone has to maintain some austerity.


Prime Minister Sheikh Hasina. Photo: File/PID

November 7, 2022

DHAKA – Highlighting the ongoing global economic recession, Prime Minister Sheikh Hasina told the parliament today (November 6, 2022) that since developed countries are even struggling to cope with the situation, Bangladesh will definitely suffer.

The premier said, “We have to be ready in any situation.”

Sheikh Hasina, also the Leader of the House, was addressing the valedictory speech in the 20th session of the 11th parliament.

The premier said that the government is trying hard to maintain the economy. But everyone has to maintain some austerity.

She said that the government has paid special attention so that the pressure of the dollar crisis ends from January next year. Pressure has been created due to pressure on the dollar. The added pressure of opening the letter of credit will end by next December, she added.

Sheikh Hasina said, what is going to happen in the future is a matter of concern. Decisions have to be made after reviewing the matter constantly. Import of luxury goods should be reduced. Instead of foreign fruits like grapes and apples, she urged all to eat local fruits.

Hasina said that due to this recession, the amount of government subsidies in various sectors has increased, and the demand for subsidies has increased due to global inflation and transport costs.

She said subsidy in the electricity sector was estimated at Tk 17,000 crore. Now there is an additional demand of Tk 32, 500 crore. This subsidy has to be paid to provide full electricity.

An additional subsidy of Tk 19,558 crore is being charged on fuel oil. Tk 4,000 crore is spent on food import. Additional Tk 9,000 crore has to be paid for public friendly programs.

Only subsidy demand has increased by about Tk 1 lakh 5 thousand and 105 crores.

About foreign debt, Hasina said, government debt is only 36 percent of GDP. Foreign debt is 13.5 percent. The government has never defaulted on repaying foreign debt. The government will not fail in the future.

About foreign reserves, she said Bangladesh still has a good reserve of foreign currencies which is enough to meet up the five-month import expenditures.

“The forex reserve was US$ 35.72 billion on November 03, 2022. Still it is possible to import goods for five months with our reserve of foreign currencies. But the forex to meet up three-month import expenditures is enough according to the international standards,” she told Parliament.

She said everyone now talks about the reserve and everyone has become expert over it. But the reserve was only US$ 2.12 billion in 1996 but her government raised it to nearly US$ 4 billion in 2001.

The PM said the AL government, coming power again in 2009, found the forex reserve of US$ 5.35 billion on January 06, 2009, which was raised to 17.47 billion on 08 January, 2014, US$ 32.09 billion on January 7, 2019, US$ 36.04 billion on June 30, 2020 and 46.39 billion on June 30, 2021.

She said the forex reserve went up to nearly US$ 48 billion during the Covid-19 as the import of goods declined sharply and the capital machinery was not imported during the pandemic.

But when the Covid restrictions were withdrawn, the imports of goods normally increased. So, the forex reserve declined, she said.

She, however, stressed the need for reducing the import of luxurious goods and imposition of high taxes on the import of less necessary products.

Besides, Sheikh Hasina, in her speech, focused on the government’s steps taken to ensure enough stock of foods, to ease the dollar crisis, to lessen import expenditures and to expand food-friendly programmes including OMS.

She also highlighted subsidies to different sectors, expansion of the social safety net, the export growth, dengue outbreak, the amount of the government’s loans and foreign debts.

About BNP’s allegations that the government imposed a bus strike ahead of the opposition party’s meetings, PM said, “What can we do if the bus owners do not drive the buses [fearing vandalism by BNP men likewise in the past]?”

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