New IMF budgetary support credit under govt scrutiny
Wednesday, 11 July 2007
Shakhawat Hossain
The caretaker government (CG) is on the brink of striking a new deal with International Monetary Fund (IMF) for getting budgetary assistance to carry out development activities, official sources said.
The new credit programme, styled, Poverty Reduction Strategy Credit (PRSC), with assurance of more than US$ 400 million in next three years is now awaiting approval by the finance and planning adviser.
"The terms and conditions of the new IMF credit programme has already been sent to the finance adviser for final scrutiny," said a senior ministry of finance (MOF) official.
The Washington-based multilateral donor agency sent the terms and conditions of the PRSC last month after the CG responded positively to the new credit programme.
The existing three-year-long loan programme-Poverty Reduction Growth Facility (PRGF)- that was signed in 2003 by the immediate past political government expired last month.
The MoF official, however, said there is hardly any basic difference between the new deal and the old one as the IMF wants the government to carry out reforms in revenue, banking and financial sectors and privatise the loss-making state owned enterprises.
"It is almost old wine in a new bottle," he said.
The former CG adviser Akbar Ali Khan and local think tank-CPD- suggested discontinuation of programme loan with IMF in view of a healthy forex reserve mainly built on higher inflow of remittances from the Bangladeshi expatriates.
But the finance and planning adviser has already said such programme loan is needed to run the annual development programme activities of the country.
He pointed out that the country still needed foreign assistance to carry out the annual development programme as almost 49 per cent of the new fiscal's development programme worth Tk 265 billion will be implemented with external funds.
Islam, however, emphasised on the quality of terms and conditions of any deal saying that no deal should be contrary to the country's interest.
The MoF sources said signing a new deal with IMF is almost inevitable for the country to ensure uninterrupted flow of future foreign aid.
According to sources, it will be difficult for the country to convince other donors such as the World Bank (WB) and the Asian Development Bank (ADB) without continuation of loan programme with the IMF.
The caretaker government (CG) is on the brink of striking a new deal with International Monetary Fund (IMF) for getting budgetary assistance to carry out development activities, official sources said.
The new credit programme, styled, Poverty Reduction Strategy Credit (PRSC), with assurance of more than US$ 400 million in next three years is now awaiting approval by the finance and planning adviser.
"The terms and conditions of the new IMF credit programme has already been sent to the finance adviser for final scrutiny," said a senior ministry of finance (MOF) official.
The Washington-based multilateral donor agency sent the terms and conditions of the PRSC last month after the CG responded positively to the new credit programme.
The existing three-year-long loan programme-Poverty Reduction Growth Facility (PRGF)- that was signed in 2003 by the immediate past political government expired last month.
The MoF official, however, said there is hardly any basic difference between the new deal and the old one as the IMF wants the government to carry out reforms in revenue, banking and financial sectors and privatise the loss-making state owned enterprises.
"It is almost old wine in a new bottle," he said.
The former CG adviser Akbar Ali Khan and local think tank-CPD- suggested discontinuation of programme loan with IMF in view of a healthy forex reserve mainly built on higher inflow of remittances from the Bangladeshi expatriates.
But the finance and planning adviser has already said such programme loan is needed to run the annual development programme activities of the country.
He pointed out that the country still needed foreign assistance to carry out the annual development programme as almost 49 per cent of the new fiscal's development programme worth Tk 265 billion will be implemented with external funds.
Islam, however, emphasised on the quality of terms and conditions of any deal saying that no deal should be contrary to the country's interest.
The MoF sources said signing a new deal with IMF is almost inevitable for the country to ensure uninterrupted flow of future foreign aid.
According to sources, it will be difficult for the country to convince other donors such as the World Bank (WB) and the Asian Development Bank (ADB) without continuation of loan programme with the IMF.