Bangladesh’s Assistance to Sri Lanka increases its image and prestige

Helping Sudan and Somalia as well

Bangladesh, debt-ridden a few years ago, 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 started giving loans. Bangladesh has given loans to Sri Lanka and Sudan. Bangladesh gave a loan to a country for the first time by giving the first installment of the loan promised to Sri Lanka in August.

Once upon a time, Bangladesh was a ‘bottomless pit’ and a donation seeker in the international arena. Now it is a lending country. It shows all-South Asian countries how to revive from ashes. Bangladesh establishes an example in South Asia how to ensure economic growth amidst various socio-political aspects.

- Advertisement -

Overcoming various adversities, Bangladesh today is a confident and promising country. Today, Bangladesh has risen to the top of every index of the economy. When the ongoing 10 mega projects are completed, the trend of economic growth of the country will increase and prosperity will increase. It shows all South Asian countries how to increase their growth amidst various adversities.

The economy of the South Asian island nation of Sri Lanka is under a lot of pressure at the moment due to the wounds of the civil war and additional foreign loans for development projects. At present, the country’s foreign exchange reserves have come down to $4 billion. Meanwhile, in the midst of the epidemic, Bangladesh’s foreign exchange reserves have reached a milestone of over $45 billion.

The Prime Minister of Sri Lanka was accompanied by the Governor of the Central Bank of Sri Lanka on his visit to Dhaka last March to attend the birth centenary celebrations of Bangabandhu. At that time, they made a proposal to Prime Minister Sheikh Hasina Wazed in this regard. After she agreed to the proposal, the Sri Lankan government sent a formal proposal to the Central Bank. Then in May, the Board of Directors of the Bangladesh Bank approved in principle a loan of $250 million to Sri Lanka under the currency swap.

Bangladesh Bank released $50 million in the first installment on August 16 based on Sri Lanka’s demand. Bangladesh entered the list of lender countries by making that loan. The second installment of $100 million was released in June 2021. This money is being given from the foreign exchange reserves of Bangladesh Bank.

Reserves are above $46 billion after a $100 million discount in favor of Sri Lanka in June. With the current foreign exchange reserves of Bangladesh, it is possible to meet the import cost for more than eight months. Bangladesh ranks second among the South Asian countries in terms of foreign exchange reserves. Bangladesh is giving dollars in this way for the first time. The number of dollars that Bangladesh will give will be reduced from the reserve. This will make Bangladesh famous.

Sri Lanka has been suffering from a foreign exchange reserve crisis in recent times. At that time, they had only $500 million in foreign exchange reserves. With this reserve, it was not possible to meet their import expenses for three months. In order to keep the reserves risk-free, at least three months of import expenditure has to be kept by the central bank.

- Advertisement -

For the first time in 50 years of independence, Bangladesh gave a loan to a country for the development of the country or to meet various needs. Bangladesh made the list of lenders by lending $50 million to Sri Lanka.

In the last decade, Bangladesh has gained this ability to lend due to the huge economic development, increase in exports and increase in expatriate income as the country’s foreign exchange reserves have swelled. Economists hope that this will change the image of the country. And Sri Lanka will be lent a total of $250 million. This money will be released in five installments.

Sudan, an African country, is unable to repay a loan from the International Monetary Fund (IMF). Bangladesh has taken the responsibility of repaying that loan.

The image of Bangladesh and the respect for the people of this country has increased due to the assistance to Sri Lanka and Sudan from its foreign exchange reserves. Now the question is valid. Bangladesh is now a lending country! If Bangladesh can be a self-sufficient, lender, an economic miracle in South Asia, why can’t others do that? Why does South Asia not take lessons from Bangladesh? Of course, South Asia can learn a lot from Bangladesh.

This information has been highlighted in a notification of the Ministry of Finance on June 16, 2021. Earlier, Bangladesh had given similar benefits to Somalia, another African country.

Sudan’s external debt skyrocketed to nearly $50 billion at the end of 2019. It is known that the IMF will get $6 billion from Sudan. In other words, Tk 5.1 trillion. When the IMF called on all its members to stand by the country in repaying the debt, almost everyone responded. As a friendly country, Bangladesh also agreed to cooperate with Sudan. In response to the IMF’s call, Bangladesh on June 15, granted Sudan a loan waiver of $650 million

The next day, on Wednesday, the Finance Ministry said in a statement that in response to the IMF’s call, Bangladesh had given Sudan a “debt waiver” of Tk 65 crore. “Sudan is a very indebted and poor country,” the finance ministry said in a statement. The government hopes the funding will strengthen Sudan’s fight against poverty.”

Bangladesh has begun to prove its economic potential in a very dramatic way. At one time the country was very poor. US Secretary of State Henry Kissinger, therefore, commented that Bangladesh is a bottomless basket. After 46 years, the US media Bloomberg says, Bangladesh is now an address of surprising success. The country’s per capita income is now $2500. It is ahead of India. At the moment, India’s per capita income is $2116. Pakistan is far behind. The country’s per capita income is $1260.

However, what happened that Bangladesh is creating one surprise after another? Economists say there are some reasons behind this. Exports, social progress and economic foresight. There are three more reasons besides economic capability. Sympathy, economic diplomacy and political will.

When this was the case, the sudden news came that Bangladesh had provided $200 million in financial assistance to Sri Lanka. The Sri Lankan media has raised the question if Bangladesh can be self-sufficient, why can’t we? In June, the Finance Ministry of Bangladesh gave more startling news. It has been said that Bangladesh stands by Sudan, the poorest country in Africa. Tk 650 million had been provided to reduce the debt burden of the IMF. The country borrowed Tk 5.1 trillion 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.

The government hopes the funding will strengthen Sudan’s fight against poverty. At one time Sudan was a British colony. The country gained independence on January 1, 1956, under a treaty. It may be recalled that last year, Bangladesh also provided more than Tk 80 million to Somalia, another African country. That was also for repaying the IMF loan. Sudan, a member of the OIC, has been crippled by debt and poverty and the financial assistance is expected to help overcome the crisis.

Last year, Bangladesh also handed Tk 80 million to help Somalia combat poverty as part of the IMF initiative. Everyone is fascinated by the development of Bangladesh.

The image of Bangladesh and the respect for the people of this country has increased due to the assistance to Sri Lanka and Sudan from its foreign exchange reserves. Now the question is valid. Bangladesh is now a lending country! If Bangladesh can be a self-sufficient, lender, an economic miracle in South Asia, why can’t others do that? Why does South Asia not take lessons from Bangladesh? Of course, South Asia can learn a lot from Bangladesh.

Hafizur Talukdar
The writer is freelance columnist

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Must Read

Woman reunited with Sikh brothers after 75 years

LAHORE: A woman, who was separated from her family at infancy in 1947 during partition of the subcontinent and adopted by a Muslim couple,...

Cover for the Corrupt?