NBR Chairman’s helpless rhetoric: Bangladesh has entered a debt trap

Staff Correspondent

Policymakers and economic experts have expressed deep concern about the country’s overall debt situation. According to them, Bangladesh could face a serious debt crisis if necessary reforms and fiscal discipline are not implemented in a timely manner. They commented that the country’s overall debt situation has increased concerns during Dr. Yunus’s tenure.

These comments came up at a seminar organized yesterday at the National Economic Council (NEC) conference room in the capital’s Sher-e-Bangla Nagar.

At the seminar, CPD Fellow Mostafizur Rahman said that if the country fails to increase revenue collection and control expenditure, the country’s debt risk will increase rapidly. Then, more new loans will have to be taken to repay the debt.

NBR Chairman Md. Abdur Rahman Khan commented, “We have already entered the debt trap. It is not possible to move forward without accepting this reality. We have to accept this and move forward with steps.”

Monira Begum, Additional Secretary of the General Economics Department of the Planning Commission, presented the keynote address at the event. Anisuzzaman Chowdhury, Special Assistant to the Chief Advisor on Finance, was the chief guest, and Ahsan H. Mansur, Governor of Bangladesh Bank, was the special guest.

Also present were Planning Department Secretary SM Shakil Akhtar, Finance Secretary Md. Khayeruzzaman Majumder, and GED member Manjur Hossain, along with other officials and economists.

Mostafizur Rahman also said that due to the increasing interest pressure on loans, the salaries, allowances and pensions of government employees, and the allocations to the agriculture and education sectors are being reduced, which is putting the development of the social sector at risk.

The NBR chairman said that a few years ago, the tax-GDP ratio was more than 10 percent, which has now come down to 7 percent. According to him, the main reason for this situation is the failure to collect taxes from all sectors of the GDP. He also said that during the tenure of the interim government, the NBR will be divided into two parts and its activities will be started under the leadership of separate secretaries.

Bangladesh Bank Governor Ahsan H. Mansur said that the merger of five troubled banks is progressing rapidly. The deposit guarantee has been increased from 1 lakh to 2 lakh taka.

He expressed optimism that 7.6 million depositor families will receive their deposits back within one to two weeks and that the new bank could turn a profit in the first or second year.

These warnings about Bangladesh’s current debt situation indicate a major challenge to the country’s financial stability.