POBNEWS24, Dhaka, Apr 9, 2022 : Sri Lanka, the 100th most educated country in Asia, is now the talk of the town. Sri Lanka is mired in foreign debt and inflation. Some people are saying that Bangladesh is also at risk due to big projects with loans. But economists have called the comparison a “simplification” and said Bangladesh was not at risk like Sri Lanka.
According to the Economic Relations Department (ERD) and the International Monetary Fund (IMF), Bangladesh’s economy is larger and more diverse than Sri Lanka’s. Bangladesh is in a good position in economic indicators.
An analysis of IMF and ERD data shows that Bangladesh’s gross domestic product (GDP) is ৬ 417 billion. And Sri Lanka’s GDP is only 72 billion dollars. Bangladesh’s foreign exchange reserves are বিল 44 billion. Sri Lanka’s reserves are 1.5 billion. Bangladesh has to repay two billion dollars of foreign debt every year. Sri Lanka has to make seven to eight billion dollars.
According to the IMF, Sri Lanka’s external debt is more than 61 percent of its GDP. In Bangladesh it is about 16 percent. If the foreign debt of a country is 20 percent of the GDP, it is considered ideal. Most of Sri Lanka’s foreign loans are taken on difficult terms. Most of the foreign loans in Bangladesh are taken on easy terms.
Although economists have commented positively on Bangladesh on these indicators, they have suggested that Sri Lanka learn from the current situation. Mostafizur Rahman, Honorary Fellow of the Center for Policy Dialogue (CPD), told Kaler Kanth that the situation is not conducive to comparing Bangladesh with Sri Lanka. But Bangladesh has to learn from Sri Lanka. Sri Lanka has become an educational country not only for Bangladesh but for the whole world. He said, “We have to be careful from now on so that we do not face any such problem in the near future.” We should study Sri Lanka, especially for economic policy. ‘
ERD’s data analysis shows that Bangladesh’s foreign debt position has increased rapidly in the last seven years. Of this, the country’s external debt stood at ৬ 26.56 billion in FY 2014-15. It rose to. 29.19 billion in the following fiscal year. The external debt stood at. 32.07 billion in FY 2017-18 and ৮ 36.24 billion in FY 2017-18.
It has grown even faster over the next three fiscal years. Of this, পরিমাণ 44.46 billion in FY 2018-19,. 51.13 billion in FY 2019-20 and. 60.15 billion in FY 2020-21.
Asked if the rapid rise in foreign debt was taking Bangladesh on its way to Sri Lanka, Zahid Hossain, a former chief economist at the World Bank’s Dhaka office, told Kaler Kantha: There are various dimensions to this mismanagement. First, the Sri Lankan government has slashed taxes to make it more popular. But the government has not provided alternative funding to meet the expenditure. In this case, a large number of new notes have been printed to meet the need for money. As a result, inflation has increased a lot. Bangladesh has not done anything like that. In this case, Bangladesh is not in big risk. ‘
Many big projects are going on in Bangladesh now. Ahsan H. Mansoor, executive director of the Policy Research Institute, thinks that the situation in Bangladesh could be similar to that in Sri Lanka if there is no proper return from these projects. He recently told the media, “Bangladesh has to be careful in taking mega projects in the coming days. ‘
As of January, Sri Lanka’s remittances were only ৭ 261 million. According to the March data of Bangladesh Bank, the expatriates have sent remittances of ৮৬ 160 million this month. In the fiscal year 2020-21, a quarter of a billion Bangladeshis living in different countries of the world sent a record amount of remittances of ৭৮ 24.6 billion even during the Corona epidemic. The Sri Lankan calendar year is a financial year. In 2021, remittances to the country reached about eight billion dollars.
In the fiscal year 2020-21, Bangladesh earned ৮ 36.75 billion from the export of goods. In the first nine months of the current 2021-22 fiscal year, Bangladesh exported about ৮ 36.60 billion worth of goods. In 2021, Sri Lanka earned সাড়ে 8.5 billion from exports. Although Corona has reduced Sri Lanka’s export earnings, the opposite has happened in Bangladesh. This income is now increasing even more after the Corona situation came under control.
After coming to power in 2019, Sri Lankan President Gotabha encouraged organic farming in the country on behalf of the king. For this he banned the use of chemical fertilizers and pesticides. This has a negative impact on the country’s production. Rice production is reduced by up to 20 percent. Sri Lanka, which is self-sufficient in rice production, was then forced to import about half a billion dollars worth of rice. The price of rice goes up. Organic agriculture also has a negative impact on the country’s tea production. Tea exports have also been negatively affected.
In this context, economist Zahid Hossain said that as a result of this policy, there has been a food crisis in the country. On the other hand, food inflation has also risen sharply. From this side Bangladesh is safe.
Planning Minister MA Mannan has said that it is not right to compare Bangladesh with Sri Lanka or put it in coexistence with Sri Lanka. “We do not accept any unreasonable projects,” he said at a meeting of the executive committee of the last National Economic Council (ECNEC). And our economic base is very strong. We are taking into account the projects that we are taking. Our export earnings are constantly increasing. Remittances are coming. Those who are trying to match Bangladesh with Sri Lanka have wrong idea. ‘
