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Riding out virus storm

Dhaka seeks budget support from multilateral lenders

FE REPORT | March 26, 2020 00:00:00

Finance minister AHM Mustafa Kamal on Wednesday urged four major multilateral donors to extend budgetary support to help the country's economy tide over the pandemic impact.

He also asked for emergency response and support to combat the new coronavirus from the development partners, officials at the Economic Relations Division, or ERD, said on Wednesday.

The minister did not sought any specific amount from the development partners such as the International Monetary Fund, or IMF, the World Bank, or WB, the Asian Development Bank, or ADB, and the Asia Infrastructure Investment Bank, or AIIB at the teleconference yesterday, a senior official told the FE.

The two global and two Asian lenders have responded positively to Bangladesh's call, saying they are working out the possible support mechanism for their member countries, including Bangladesh, said the official asking not to be named. Mr Kamal went live with officials of the IMF, WB, ADB and the AIIB from the ERD office in Dhaka.

He took part in the video conferencing on "Macroeconomic and policy implication on the novel coronavirus crisis for the South Asia region" along with the four donors, finance ministers and secretaries from South Asian countries.

Presided over by the WB's South Asia vice president Hartweigh Schafer, the conference was attended by senior executives from the headquarters of the four development partners, and the ministers and secretaries of the eight South Asian countries.

The finance minister briefed the development partners about the coronavirus impact on the Bangladesh's economy, an ERD official said.

He also highlighted the cancellation of export orders of textiles and clothing sector and the possible effects on remittances and revenue earnings in the aftermath of the virus that causes Covid-19 illness, said the ERD official.

Quoting the ADB's projection of possible loss of equivalent to 1.1 per cent of gross domestic product, GDP, due to the pandemic, the minister said Bangladesh economy has been growing at more than 7.0 per cent over the last three years, which could be affected this year.

"When we are on-track to achieve the Sustainable Development Goals by 2030, this time the impact of the coronavirus is likely to restrict our smooth transition. So, we need help to overcome the impact," Mr Kamal said.

He said, "A country alone could not be able to weather the effects of the deadly impact of the virus."

He expressed the hope that the development partners, especially the IMF and the WB, would come forward with their extended support to Bangladesh.

Meanwhile, a senior ERD official said this meeting was a multi-dimensional approach of the South Asian nations and development partners for taking possible steps to respond to the impact on the macro-economy.

"The development partners and all other countries have agreed that the impact will be dire and every country needs help from the development partners. Now we will assess our potential needs," he told the FE.

"We need the budgetary support. The Finance Division will assess the necessity and then the government is likely to seek a certain amount of financial assistance from the World Bank and the IMF," he added.

Already, the IMF has announced a US$50 billion, the WB $14 billion, and the ADB $6.5 billion financial package for responding to the impact of the virus outbreak across the globe.

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