Dhaka may claim $5.06b from recession rescue fund
Saturday, 6 June 2009
Sheikh Shahariar Zaman
The government is going to claim at least $5.0 billion as compensation from the developed world's $1.1 trillion fund created to help the developing countries tide over the effect of the global financial crisis, said commerce minister Muhammad Faruk Khan told the FE.
"According to a preliminary study, the estimated economic losses of the country are worth over $5 billion and the final report will be done in a very short time," he said.
After getting the final report, the country will seek its fair share of the $1.1 trillion fund from the different multilateral financial institutions, which will primarily channel the funds to different countries, he added.
The final report will be prepared soon and Dhaka will seek the compensation within two to three months' time, and it is expected that by next year the total amount will be disbursed, he said.
"Frozen food, jute and jute goods, leather, pharmaceuticals and other exporting sectors have been badly affected by the crisis," he said.
During July-April period of the current fiscal, frozen food export dropped by 14 per cent, jute by 18 per cent, leather by 14 per cent, pharmaceuticals by 14 per cent and vegetables by 27 per cent.
Economic Relations Division (ERD) and Bangladesh Bank are assessing the losses caused by the global crisis, Mr Faruk said.
"The World Bank, International Monetary Fund and Asian Development Bank have their own estimation about the damage, and the government is also preparing its own assessment report," he said.
Bangladesh and other least developed countries (LDCs) will jointly seek compensation from the developed world, he added.
The commerce ministry recently sent a letter to Tanzanian trade minister, who is coordinating LDCs interest in the World Trade Organisation, to raise 'aid for trade' issue before the multilateral trading body.
"I had a long conversation with the Tanzanian minister recently in Turkey where we discussed how to get maximum compensation from the developed world and increase our trade volume," he said.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Fazlul Hoque said the government, so far, did not offer anything to the sector thinking that it was doing fine.
"But the government is not considering the whole picture," he said.
The readymade garment (RMG) sector is growing at a rate of 20 per cent. But in October-March period the growth rate was 8.0 per cent against 54 per cent in July-September period, he said.
Many RMG companies that run on sub-contracting are facing difficulties as big companies, which offer them work against export orders, are running under-capacity, he added.
"Most of the companies are working with 70 to 80 per cent of their capacity," Mr Hoque said.
The BKMEA president pointed out that capital machinery import fell in the July-March period, which is very alarming.
"After the crisis is over it will be difficult to meet the growing demand as our capacity is not growing," he feared.
The government is going to claim at least $5.0 billion as compensation from the developed world's $1.1 trillion fund created to help the developing countries tide over the effect of the global financial crisis, said commerce minister Muhammad Faruk Khan told the FE.
"According to a preliminary study, the estimated economic losses of the country are worth over $5 billion and the final report will be done in a very short time," he said.
After getting the final report, the country will seek its fair share of the $1.1 trillion fund from the different multilateral financial institutions, which will primarily channel the funds to different countries, he added.
The final report will be prepared soon and Dhaka will seek the compensation within two to three months' time, and it is expected that by next year the total amount will be disbursed, he said.
"Frozen food, jute and jute goods, leather, pharmaceuticals and other exporting sectors have been badly affected by the crisis," he said.
During July-April period of the current fiscal, frozen food export dropped by 14 per cent, jute by 18 per cent, leather by 14 per cent, pharmaceuticals by 14 per cent and vegetables by 27 per cent.
Economic Relations Division (ERD) and Bangladesh Bank are assessing the losses caused by the global crisis, Mr Faruk said.
"The World Bank, International Monetary Fund and Asian Development Bank have their own estimation about the damage, and the government is also preparing its own assessment report," he said.
Bangladesh and other least developed countries (LDCs) will jointly seek compensation from the developed world, he added.
The commerce ministry recently sent a letter to Tanzanian trade minister, who is coordinating LDCs interest in the World Trade Organisation, to raise 'aid for trade' issue before the multilateral trading body.
"I had a long conversation with the Tanzanian minister recently in Turkey where we discussed how to get maximum compensation from the developed world and increase our trade volume," he said.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Fazlul Hoque said the government, so far, did not offer anything to the sector thinking that it was doing fine.
"But the government is not considering the whole picture," he said.
The readymade garment (RMG) sector is growing at a rate of 20 per cent. But in October-March period the growth rate was 8.0 per cent against 54 per cent in July-September period, he said.
Many RMG companies that run on sub-contracting are facing difficulties as big companies, which offer them work against export orders, are running under-capacity, he added.
"Most of the companies are working with 70 to 80 per cent of their capacity," Mr Hoque said.
The BKMEA president pointed out that capital machinery import fell in the July-March period, which is very alarming.
"After the crisis is over it will be difficult to meet the growing demand as our capacity is not growing," he feared.