According to Kamal, Beijing's bad lending policies run the risk of placing emerging countries in debt crisis
Chinese-backed construction projects for Sri Lanka have failed to provide profits, according to AHM Mustafa Kamal, have worsened an economic catastrophe
Bangladesh's finance minister has cautioned that as world and sluggish GDP increase the pressure on heavily indebted emerging economies, developing nations should reconsider receiving further loans under China's Belt and Road Initiative.
AHM Mustafa Kamal said that Beijing needs to be stricter when assessing its loans due to worries that bad lending decisions ran the danger of driving nations into debt trouble. He used the example of Sri Lanka, where infrastructure projects sponsored by China that failed to provide returns have compounded a serious economic problem.
AHM Mustafa Kamal said that Beijing needs to be stricter when assessing its loans due to worries that bad lending decisions ran the danger of driving nations into debt trouble. He used the example of Sri Lanka, where infrastructure projects sponsored by China that failed to provide returns have compounded a serious economic problem.
"In an interview, he remarked of BRI, "Whatever the scenario [that] is taking on internationally, everybody would be seriously thinking to approve to this project." China is being blamed by everyone. China cannot object. It falls within their authority.
He said that China had been thorough enough in choosing which projects to assist, which was underlined by the crisis in Sri Lanka. Before financing to a project, it must "do a comprehensive investigation," he added. "After Sri Lanka, we believed that Chinese officials were not paying enough attention to this specific issue, which is crucial."
He said that China had been thorough enough in choosing which projects to assist, which was underlined by the crisis in Sri Lanka. Before financing to a project, it must "do a comprehensive investigation," he added. "After Sri Lanka, we believed that Chinese officials were not paying enough attention to this specific issue, which is crucial."
Following Russia's full-scale invasion of Ukraine, Bangladesh last month had become the latest Asian nation to request financial assistance from the IMF as rising commodity prices put pressure on its foreign reserves. The nation, which is a BRI partner, owes Beijing $4 billion, or 6% of its entire foreign debt.
According to Kamal, Bangladesh requested a $1.5 billion first installment from the IMF as part of a $4.5 billion package that would also include money to support its budget and assist it fund initiatives that would help it become more resilient to climate change.
The overall amount of possible loans for Bangladesh, according to the fund, has not yet been agreed upon.
According to Kamal, Bangladesh requested a $1.5 billion first installment from the IMF as part of a $4.5 billion package that would also include money to support its budget and assist it fund initiatives that would help it become more resilient to climate change.
The overall amount of possible loans for Bangladesh, according to the fund, has not yet been agreed upon.
In addition, according to Kamal, Bangladesh is requesting an additional $4 billion from a number of other bilateral and multilateral lenders, including the International Finance corporation, Asian Development Banks, Asian Infrastructure Investments Bank, and the Japan International Cooperation Agency. He continued by expressing confidence in their ability to lend money to the nation.
Wang Yi, the foreign minister of China, met with Sheikh Hasina, the prime minister of Bangladesh, during his weekend visit. He made these remarks during that trip. China referred to itself as "Bangladesh's most trustworthy long-term strategic partner" in a statement, which also stated that the two countries had decided to intensify their "cooperation in infrastructure."
Wang Yi, the foreign minister of China, met with Sheikh Hasina, the prime minister of Bangladesh, during his weekend visit. He made these remarks during that trip. China referred to itself as "Bangladesh's most trustworthy long-term strategic partner" in a statement, which also stated that the two countries had decided to intensify their "cooperation in infrastructure."
The economic impact of the COVID-19 epidemic, along with the rise in food and fuel costs due to the conflict in the Ukraine, have put many poor nations under pressure, and some are finding it difficult to pay back their foreign loans.
Sri Lanka is in talks the with IMF for an immediate rescue after defaulting on its national debt in May. Pakistan signed a preliminary agreement with the fund last month to release $1.3 billion as part of an ongoing $7 billion aid package. Pakistan's foreign reserves have now decreased to barely enough for a month and a half's worth of imports.
Sri Lanka is in talks the with IMF for an immediate rescue after defaulting on its national debt in May. Pakistan signed a preliminary agreement with the fund last month to release $1.3 billion as part of an ongoing $7 billion aid package. Pakistan's foreign reserves have now decreased to barely enough for a month and a half's worth of imports.
Rising energy import costs have had a significant negative impact on Bangladesh, where frequent, lengthy power outages are a result of fuel shortages. Its forex investments have also decreased, from more over $45 billion a year ago to far less than $40 billion today.
Analysts claim that the nation's robust export sector, particularly the garment industry, has protected it from new worldwide shocks and that the nation's reserves still cover approximately five months' worth of imports, giving it some buffer.
Analysts claim that the nation's robust export sector, particularly the garment industry, has protected it from new worldwide shocks and that the nation's reserves still cover approximately five months' worth of imports, giving it some buffer.
Accordingly, Bangladesh was not in danger of defaulting as Sri Lanka was, despite the fact that "everyone is suffering [and] we're also under pressure," Kamal added. "It is impossible to even consider such a scenario."
According to IMF, Bangladesh owes multilateral lenders including the World Bank the majority of its $62 billion in total foreign obligations as of 2021. Japan is the nation's top bilateral creditor with $9 billion in debt, or 15% of its total debt, followed by China.
After its independence struggle in 1971, Bangladesh's economy saw fast growth. It went from being among the poorest in the area to having a per income per capita of $2,500, which is greater than that of India and Pakistan.
According to IMF, Bangladesh owes multilateral lenders including the World Bank the majority of its $62 billion in total foreign obligations as of 2021. Japan is the nation's top bilateral creditor with $9 billion in debt, or 15% of its total debt, followed by China.
After its independence struggle in 1971, Bangladesh's economy saw fast growth. It went from being among the poorest in the area to having a per income per capita of $2,500, which is greater than that of India and Pakistan.
However, the low-lying nation of 160 million faces a serious danger from climate change, making it susceptible to flooding, unpredictable monsoon rains, and increasing sea levels.
This month, the IMF announced that as part of Bangladesh's loan package, its new Resilient and Sustainability Trust will contribute to long-term finance for climate change-related projects. It said that "unprecedented global shocks provide considerable uncertainty to countries like Bangladesh."
Infrastructure issues are still a barrier to growth. The government opened the $3.6 billion Padma Bridge in Dhaka in June. The project was constructed in China, but local money was used instead when international financiers withdrew support because to claims of corruption that were never proven. But in response to the downturn in the economy, the government has decided to shelve a number of planned infrastructure improvements, including those to repair motorways and construct a 5G network.
We are just taking care of the initiatives that are necessary, ongoing, and therefore will pay off as quickly as possible, according to Kamal. "To other ventures, we are politely declining."
We are just taking care of the initiatives that are necessary, ongoing, and therefore will pay off as quickly as possible, according to Kamal. "To other ventures, we are politely declining."
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