Use the forex reserve properly
Thursday, 19 November 2009
BANGLADESH should properly utilise its somewhat comfortable foreign currency reserve of $10 billion dollars. It is the biggest ever reserve since independence. Not long ago Bangladesh's small reserve was a cause for worry. How to pay for the import bills was a source of headache. The reverse was too often far too inadequate to meet two months' import bills. The central bank used to remain busy securing funds from abroad to tide over the difficulties.
And there were genuine reasons for small foreign exchange reserves. The first reason, exports were confined to traditional items like jute, jute goods, tea and hides and skin. Remittance from abroad was small. Devaluation was a known measure to encourage exports. Import of foodgrains and petroleum products used to put an extra pressure on the forex reserve. Bangladesh had to borrow to meet its import bills.
Increased output also helped Bangladesh reduce foodgrain import after independence. Import substitution industries were set up to reduce pressure on the forex reserve. About 10 million Bangladeshi workers abroad, who started seeking foreign employment rather late, contributed much to the forex reserve.
The garment industries of the country also made a huge contribution. Frozen food, and non-traditional items followed the garment industries with their export earnings. Shipbuilding has come to the scene recently with great promise.
But natural disasters like floods, tidal bores, and erosion by rivers continue to destroy crops. Perennial energy crisis continues to impede growth. We should better use our resources to make the economy productive.
Mahbubul Haque Chowdhury,
A retired General Manager,
Agrani Bank, Sonali Bank
Dhaka
And there were genuine reasons for small foreign exchange reserves. The first reason, exports were confined to traditional items like jute, jute goods, tea and hides and skin. Remittance from abroad was small. Devaluation was a known measure to encourage exports. Import of foodgrains and petroleum products used to put an extra pressure on the forex reserve. Bangladesh had to borrow to meet its import bills.
Increased output also helped Bangladesh reduce foodgrain import after independence. Import substitution industries were set up to reduce pressure on the forex reserve. About 10 million Bangladeshi workers abroad, who started seeking foreign employment rather late, contributed much to the forex reserve.
The garment industries of the country also made a huge contribution. Frozen food, and non-traditional items followed the garment industries with their export earnings. Shipbuilding has come to the scene recently with great promise.
But natural disasters like floods, tidal bores, and erosion by rivers continue to destroy crops. Perennial energy crisis continues to impede growth. We should better use our resources to make the economy productive.
Mahbubul Haque Chowdhury,
A retired General Manager,
Agrani Bank, Sonali Bank
Dhaka