IMF defers Dhaka office closure until 2011-end

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Nazmul Ahsan
The International Monetary Fund has decided not to wind up its office in Dhaka until 2011, responding to requests from the government, official sources said.
Jonathan C. Dunn, IMF resident representative in Dhaka, conveyed the latest decision to the government on July 29 last.
"We are not winding up our local office in Dhaka in December this year as was decided earlier. Rather the office will remain open and operative until December 2011", Dunn told the FE on Tuesday at his office located in the Bangladesh Bank premises.
"The decision on the closure has been reversed following request made by the government to the IMF Headquarters in Washington, particularly by Mashiur Rahman, Economic Affairs Adviser to the Prime Minister", he said.
Earlier, the IMF in May last informed the government about its intention to close down the IMF local office from December next since the Fund had no financial programme in the country.
"No programme, no office", Dunn told FE, citing the general policy of the IMF.
"The general policy of the IMF as far as having offices in member countries will not be applicable in case of Bangladesh for the next two years", he said.
The IMF resident representative said the Fund has been suffering from significant budgetary constraints, forcing its management to wind up offices in many countries and cut jobs.
The IMF offices in South Korea, Hong Kong and Papua New Guinea were closed down last year following the global financial meltdown, Dunn said.
The IMF would continue to extend technical assistance to the government despite its having no programme in operation at the moment, Dunn said.
Presently, the IMF is providing technical assistance for upgradation of the accounting and auditing systems of the Bangladesh Bank, development of secondary market for government debt instruments, reform of the tax administration and tax laws, debt management and forecasting the macro economy on regular basis.
Speaking on the fundamentals of the local economy, Dunn said the economy has until now shown its resilience as far as export, remittance and foreign exchange reserve are concerned.
"I don't foresee any crisis in the balance of payments (BoP) situation of within the next one year", Dunn told the FE.
"The IMF will extend support to BoP whenever necessary", he said.
"The government will have full freedom to use such support if provided in future", Dunn said.
Jonathan C. Dunn said the economic situation of the country in 2009-2010 would be more dependent on the pace of recovery of the US economy and local agriculture production.
He, however, predicts a 15 to 20 per cent fall in remittance income in the current fiscal year over that of the previous year.
"The export growth in the current fiscal year is less likely to decline more than 8.0 to 9.0 per cent over that of the 2008-2009.' Dunn told FE.