Inspiringly positive
Monday, 27 August 2007
A nation's economic self-reliance in any form is coveted and prestigious for it. For this reason, last Saturday's report in this paper about the Bangladesh Bank (BB) being likely to provide $300 million to the state-owned Bangladesh Petroleum Corporation (BPC) for importing fuel to power the economy was encouraging. In spite of the worries wrought by devastations spelt by the receding flood and all other adverse developments, like price spirals, the enlightened people must have whole-heartedly greeted the news. A country that fervently sought about a year ago to import fuel oils on deferred payment for six months and could not arrange it is now moving ahead to buy it with own finance. That's a great deal-a giant leap forward -- for this nation. One may exclaim: Hurrah.
Confidence built up on its achievement, however small initially, enthuses a nation to move ahead in unhesitant firm steps along the road of steady reconstruction and development towards a better future. The opposite situation, under whatever circumstances, can only sap off its inspiration. Even if a frustrated people happen to bounce back to rise up from the pit of desperation, the unseen cost of suppressed anxiety in well-meaning citizens at an apparent national crisis is always enormous. This consideration propelled this paper into urging the government at the pertinent time to take loan from the nation's own central bank to finance the oil import. A smaller foreign exchange reserve at that time did not permit the government and the bank to act on the advice due to a commitment obligation, arising from an agreement with an international agency, for maintaining a steady reserve that is enough for import for a certain length of time. The reserve, since then, has gone up. The situation now is far better.
According to the report, the Power Division sought the said loan for three state-owned banks-Sonali, Janata and Agrani, $100 million each, to be advanced by them to the BPC as loan for importing fuel oil. The BB has agreed. The interest payable on the loan would thus remain in the country, unlike on many previous occasions when it was paid to foreign banks, which had advanced the loan in foreign exchange for the purchase. As enrichment is a process of accumulating wealth upon wealth the particular decision, which would help halt flight of some capital, will proportionately check pauperization. Both the Power Division and the BB deserve public acclamation for their praise-worthy decision.
The fact of imported fuel oils being continually sold at prices below the procurement costs may immediately stimulate one to ask whether the BPC would be able to pay back the loan in full along with interest to keep up the central bank's ability to advance a similar loan whenever need arises. Or, will the situation again spiral backward to square one with the BPC failing to repay the loan along with interest in full? It's a serious management issue that needs to be resolved, if not now, at some future stage that should not be far off. The BPC, which found itself freed of its accumulated total liabilities of Tk 75 billion on its acceptance by the government in the current budget, has already reportedly lost Tk 3.77 billion in June and July. The government should decide soon whether its losses would be plugged by it as official subsidy. Lingering uncertainty about funds always fuels decadence in any organization.
Confidence built up on its achievement, however small initially, enthuses a nation to move ahead in unhesitant firm steps along the road of steady reconstruction and development towards a better future. The opposite situation, under whatever circumstances, can only sap off its inspiration. Even if a frustrated people happen to bounce back to rise up from the pit of desperation, the unseen cost of suppressed anxiety in well-meaning citizens at an apparent national crisis is always enormous. This consideration propelled this paper into urging the government at the pertinent time to take loan from the nation's own central bank to finance the oil import. A smaller foreign exchange reserve at that time did not permit the government and the bank to act on the advice due to a commitment obligation, arising from an agreement with an international agency, for maintaining a steady reserve that is enough for import for a certain length of time. The reserve, since then, has gone up. The situation now is far better.
According to the report, the Power Division sought the said loan for three state-owned banks-Sonali, Janata and Agrani, $100 million each, to be advanced by them to the BPC as loan for importing fuel oil. The BB has agreed. The interest payable on the loan would thus remain in the country, unlike on many previous occasions when it was paid to foreign banks, which had advanced the loan in foreign exchange for the purchase. As enrichment is a process of accumulating wealth upon wealth the particular decision, which would help halt flight of some capital, will proportionately check pauperization. Both the Power Division and the BB deserve public acclamation for their praise-worthy decision.
The fact of imported fuel oils being continually sold at prices below the procurement costs may immediately stimulate one to ask whether the BPC would be able to pay back the loan in full along with interest to keep up the central bank's ability to advance a similar loan whenever need arises. Or, will the situation again spiral backward to square one with the BPC failing to repay the loan along with interest in full? It's a serious management issue that needs to be resolved, if not now, at some future stage that should not be far off. The BPC, which found itself freed of its accumulated total liabilities of Tk 75 billion on its acceptance by the government in the current budget, has already reportedly lost Tk 3.77 billion in June and July. The government should decide soon whether its losses would be plugged by it as official subsidy. Lingering uncertainty about funds always fuels decadence in any organization.