IMF suggests further cut in energy subsidy

The International Monetary Fund (IMF) Wednesday called for further cut in energy subsidies to help boost spending on targeted social safety net to help protect the poor.
IMF deputy managing director (DMD) Naoyuki Shinohara mentioned this while making his concluding statement at the end of his two-day visit to Bangladesh.
The IMF DMD said Bangladesh is in favour of strengthening financial position of the state-owned commercial banks through enhanced supervision and corporate governance, complemented with gradual recapitalisation.
The country wants to strengthen its public debt management, focussing on external borrowing on projects with high social returns.
He said Bangladesh is taking steps to improve its business climate as well as labour and safety conditions.
During his visit the IMF official met Prime Minister Sheikh Hasina, Finance Minister AMA Muhith, members of the parliamentary standing committee on the Ministry of Finance (MoF), and senior officials of the finance ministry and BB.
The IMF DMD also said speeding up tax collections for meeting outlay to be required for priority and development projects.
He said Bangladesh has many success stories regarding progress towards achieving the Millennium Development Goals (MDGs), particularly in increasing access to primary education and eliminating gender disparity in primary and secondary schools.
Mr Shinohara said: "To safeguard these achievements and ensure sustained high and inclusive growth going forward, the authorities recognise that continued efforts are needed in several fronts."
He said Bangladesh has made substantial progress in strengthening macro-economic conditions through the IMF-supported extended credit facility arrangement.
"The country now has a stronger external and domestic position, with international reserves more than twice the low level of late 2011."
He said amendments to the Banking Companies Act, passed in July 2013, have significantly strengthened banking system governance, enhancing the supervisory powers of the central bank to safeguard financial stability.
Replying to a question on political consensus, the IMF DMD said this is completely an internal issue of Bangladesh. But political stability is a must for ensuring proper economic environment and growth.
Regarding inclusive growth, Mr. Shinohara said infrastructure development will help ensure inclusive growth.
He said improvement of infrastructures, like -- transportation and education, will help achieve sustained economic growth. Reduction of income-inequality and social protection will also be attained through sustained growth.
Replying to another question relating to 'tampering growth data' of the Bangladesh Bureau of Statistics, the IMF DMD refrained from going through details on the issue.