No chances are there for Bangladesh getting caught in a middle-income trap in its LDC graduation process for its inherent economic dynamics, Finance Minister AHM Mustafa Kamal said Wednesday.
He made the remark after presiding over two cabinet-body meetings one of which approved a package of government purchase proposals and another endorsed a new export policy that looks up to US$80 billion worth of annual export by 2024 fiscal.
"I think at this moment it's not applicable to us to fall in middle-income trap," the finance minister told newsmen after the virtual meeting of the cabinet committee on government purchases, thus dispelling another minister's premonition.
He mentions that Bangladesh's perspective plan 2041 clearly spells of year-wise projections and paths for implementation of development works in the run-up to being a higher-income country.
Mr Kamal's comment came a day after Planning Minister MA Mannan, echoing in part some economists' precaution, expressed apprehension that Bangladesh might fall into a 'trap-like' situation if challenges couldn't be addressed well in time.
According to World Bank definition, middle-income trap refers to a situation whereby a middle-income country fails to transition to a high-income economy due to rising costs and declining competitiveness.
Many counties in Latin America and the Middle East have been mired in a middle-income trap, and recent evidence also suggests that a number of countries in East Asia are also in a similar predicament.
Mr Kamal categorically said one cannot compare Bangladesh with other countries which got into the trap for various reasons.
Citing an example he says investment in Vietnam almost all came from foreign sources. Thus, when the international market faces ups and downs, foreign investments there also face the impacts.
"But in our country, it's totally opposite to that," he told the press, adding: "Whatever we did so far is largely from our own investment. Thus I don't think our investment will face any turmoil."
Replying to a query on cutback in hiked fuel-oil prices, Mr Kamal said the ministry concerned would look after the matter.
"You know how far the price climbed once. Now the fuel-oil price is going down. I believe the government will consider it," says the minister who holds the purse strings.
Regarding price hike of the US dollar at banking level, he said since export and import are rising simultaneously, dollar price is also seeing a rise.
But there is no possibility of excessive price hike of the dollar, the finance minister says.
In the last couple of days, the dollar has sold at Tk 86 in banks while in the kerb-market rate is over Tk 91.
Earlier, the cabinet committee on economic affairs approved in principle the draft 'Export Policy 2021-24', placed by the ministry of commerce.
In the new policy the government sets sights high on an export turnover of $80 billion for the fiscal year 2024.
"All export sectors will get uniform facilities under the export policy," the finance minister said while reading out some salient features of the newly stamped document.
The purchase committee in the meeting approved a proposal for import of 1.49 million tonnes of refined fuel oils during the January-June 2022 period from six state-owned enterprises of Thailand, the UAE, China, Indonesia and Malaysia.
Bangladesh Petroleum Corporation (BPC) will make the import under government-to-government deals.
Also, the meeting endorsed another proposal from the BPC to import 90,000 tonnes of diesel from India's state-run Numaligarh Refinery Ltd at a cost of Tk 5.124 billion.
The Bangladesh Hi-Tech Park Authority has been given the green light at the meeting to construct eight steel-structure multipurpose buildings in eight districts at a cost of Tk 12.051 billion by appointing LARSEN and TOUBRO Ltd, India, as contractor.
Bangladesh Power Development Board (BPDB) also got the go-ahead to buy 32,400 SPC Poles from a joint venture of Charka SPC Poles Ltd, Dada Engineering Ltd, and Confidence Infrastructure Ltd at a cost of Tk 313.6 million.
Also, BPDB will buy another 32,396 SPC Poles from a joint-venture company of Charka SPC Poles Ltd, Confidence Infrastructure Ltd. and Poles and Concrete Ltd at a cost of Tk 313.5 million.
Under another approved purchase proposal the Rural Electrification Board (BREB) will buy 13,040 distribution transformers at a cost of Tk 719.9 million from TS Transformers Ltd.
The purchase body also approved a pack of five proposals of Bangladesh Inland Water Transport Authority (BIWTA) for excavation works of Punarbhaba River by engaging seven different contractors.
Proposals for procurement of two tugboats each by the Chittagong Port Authority (CPA) and the Mongla Port Authority from Cheoy Lee Shipyards Ltd, Hong Kong, also secured the cabinet body's nod.