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Finance minister rules out trade war fallout

Cabinet body returns purchase proposal for MRPs


FE REPORT | Published: November 28, 2019 10:33:03 | Updated: December 10, 2019 19:47:49


Finance minister AHM Mustafa Kamal said on Wednesday Bangladesh's economy would not face any shock from the ongoing global trade war due to its strong base.

The minister said due to the ongoing trade war, one country is slapping extra tariff on other countries, with China, America, Europe and many other nations being engaged in it.

"Normal trade is not taking place globally," he added.

Between 1991 and 2000, the average global economic growth was 6.0 per cent, which now came down to as low as 2.6 per cent, according to the International Monetary Fund and the World Bank, he said.

"The growth is almost half compared to that period. But in Bangladesh the growth won't decline to that level. Even it won't slump," the minister told reporters after a meeting of the cabinet committee on public procurement at the Bangladesh secretariat.

He said development partners have already explained the reasons why Bangladesh's economy would not see slowdown.

Refereeing to the IMF and the World Bank, he said developing countries such as Bangladesh will face difficulties only if these have higher debt in proportion to Gross Domestic Product, GDP.

"Our loan is very small-some 33 per cent of GDP. Nowhere in the world the ratio is so low. We have no problem at all," he said.

Mr Kamal said countries having strong manufacturing sector, would not face difficulties.

He insisted Bangladesh's main agenda is to keep the manufacturing sector strong by providing necessary assistance.

On the day, a nine-member delegation led by chargé d'affaires of the UAE embassy in Bangladesh Abdullah Ali met the minister at his secretariat office.

About his meeting with the delegation, the minister said Janata Bank Ltd will work jointly with RAK Bank of the United Arab Emirates, UAE, to collect remittances in the Middle Eastern country.

He said despite announcing 2.0 per cent incentives, the inward remittances from the UAE through the legal channel is still much lower than expected because of the limited number of bank branches there.

For this reason, the remitters send money through the illegal channel, which is not only risky for them, but also detrimental to Bangladesh's economy.

The RAK Bank with its good number of branches across the UAE will collect remittances and the Janata Bank will send those to Bangladesh, the minister said.

Terming remittance the backbone to the economy, Mr Kamal said the partnership will help boost overseas flows from the UAE.

During fiscal year 2018-19, remittances worth $2.54 billion came from the UAE.

Another delegation from the Asian Development Bank, or ADB, led by its country director Manmohan Parkash and mission leader Pierre Van Peteghem met the minister at his office.

The two sides discussed the launch of corporate bonds in an effort to arrange funds from alternative sources for industrialisation.

The minister said these will be Taka bond, which would be cushioned against any complexities that arise from ups and down of the exchange rate with foreign currencies.

Mr Kamal said floating of such bonds will also help lower the pressure on the banking sector to provide long-term loans by taking short term deposits.

In the cabinet meeting, the committee approved the procurement of optical fibre cable for establishing an information technology network in difficult-to-reach areas in eight divisions.

The procurement will cost the exchequer Tk 1.11 billion and the state-owned Bangladesh Cable Shilpa Ltd will supply the cables.

The committee also approved the appointment of an expert firm for designing the landing and shelter stations for vessels of Bangladesh Inland Water Transport Authority in river routes.

A Danish company has been awarded the job for Tk 330 million.

However, the committee sent back a proposal for buying two million machine readable passports and two million lamination foil for offering 67 per cent higher price than the previous lot.

The committee asked the home ministry to talk with other such suppliers to check whether they can supply these things at lower prices and reduce the delivery period.

"67 per cent price hike is huge. Its' not possible for this committee to approve such a proposal," said Mr Kamal.

The committee also sent back another procurement proposal of the ministry of water resources for building guide dam on the banks of Dhaleshwari River.

syful-islam@outlook.com

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