We believe such initiative makes sense when so much funds are available to implement development projects – mainly mega project now waiting for approval but shortage of fund is delaying them. Naturally such fund can boost the country’s capacity to overcome infrastructure shortage – so essential to speed up the pace of growth. But the major cause of concerns is how it can be put to use with total safety.
Corruption, misuse of money and poor governance are some of the major threats to the safety. Our public institutions lack transparency and accountability at almost every level of the government. Powerful oligarchs within the government or business houses closer to the government have robbed almost all public banks and much of the fund has been moved out of the country. These banks are routinely supported with funds from annual budgets to keep them functioning. Unbridled financial scandals are blamed for disrupting every big projects and this is what worries experts and Bangladesh Bank officials to give consent to such move.
Otherwise using the fund will allow the government to avoid taking loans from multilateral lending agencies attached with stringent conditions for the economy. Many of our business houses are also taking loans in foreign currency from foreign banks and paying huge interest. The proposed SWF can meet requirement of the government and big private borrowers. The repayment liability will also remain within the nation to benefit our own banks and other financial institutions
The Finance Ministry has proposed the SWF with a capital of US$ 5 billion using reserves at Bangladesh Bank, which now stands at $31.75 billion and on rise. As per media report the Ministry has already sent the proposal to Bangladesh Bank seeking opinion. In our view the move may be given approval subject to enacting stringent law and effective rules of business with an appropriate authority to run the fund. The point is how the concerned authorities will protect the fund, when Bangladesh Bank’s own reserves were not safe from swindlers. The other recent example is the misuse of Malaysian Sovereign Wealth Fund. Prime Minister Najib Razzak is under tremendous pressure to resign over missing of around $3.5 billion from 1MDB fund.
So the risks are ample while the prospects are also immense and we suggest the matter may be debated in public forum how safety may be ensured when parliament is not enough to make independent suggestions.
