It's high time the new political government in Bangladesh with a vast majority began massive reforms in the unkempt financial sector immediately, suggests the International Monetary Fund after diagnosing regional economic problems.
The IMF Director at the Asia and Pacific Department (APD), Krishna Srinivasan, made the remark Thursday at a press briefing on Regional Economic Outlook for Asia and the Pacific, at the Fund's headquarters in Washington on the sidelines of the Spring Meetings of the IMF and the World Bank Group.
He mentions that he recently visited Bangladesh and met with the prime minister and the finance minister and other officials discussing dos for now on the economic front, as the Fund holds two due tranches of its funding package for the country.
"We had a good discussion in terms of the challenges the country faces. And, we made the point that (for) a new government with a significant majority this is a right time to undertake ambitious reforms," he says in reply to a query.
Mr Srinivasan recalls the government side heard the IMF team's remarks and now "we'll wait to see how they react to that."
He also calls upon the government to provide required supports to people using the limited resources the country has, since people are now being hurt in Bangladesh due to war-induced shocks.
At the same time he urges Bangladeshi authorities to work for improving the revenue intake which is among the lowest in the world.
"In the case of Bangladesh, their revenue base is on the lower side, their revenue intake is on the lower side and so they are that much more hard-pressed to provide support. But, again, people are hurt in Bangladesh so it's even more important to use whatever resources you have to make it as targeted as possible," Mr Srinivasan says.
Replying to a query, he notes that apart from working hard to improve revenue earnings, Bangladesh also needs to take into account other impediments in the financial sector and so on so that they can get growth going over the near term and over the longer term.
Asked whether the IMF has additional financing packages for Bangladesh to offset the deficit created due to Middle-East conflicts, he replies like other Asian countries, Bangladesh is also affected by the energy shocks. The country imports a lot of energy, thus affected by the shock.
"We're working with the authorities in terms of policy support and on the programmes. Negotiations are ongoing and discussions are ongoing. So we'll have to just wait and see how those things pan out," says Mr Srinivasan about additional fund support.
He points out that Bangladesh has not done well in terms of revenue earnings rather it has slipped down over the last three years. "So, a lot of reforms are needed in Bangladesh both on the fiscal side, on the revenue side, and need to try to rehabilitate the financial sector and also needs exchange-rate reform."
Mr Srinivasan concludes that all the three pillars on which the US$5.5-billion lending programme was based there are many works to be done.
syful-islam@outlook.com
