Kazi Zahidul Hasan :
Economists on Saturday praised the government’s move to borrow from the central bank’s foreign currency reserves for implementing mega development projects.
They also urged the government to form a dedicated body comprising experts from private and public sector to manage and govern the fund properly to ensure its maximum benefit on the economy.
Economists earlier called upon the government for managing the country’s foreign exchange reserve more rationally, suggesting portions of the reserve to be used for productive purposes including financing of development projects.
Economists came up with the suggestion following huge buildup of foreign exchange reserve upto $31.54 billion in the central bank, saying such a big reserve could leave an adverse impact on economy unless it is not properly managed and channeled through investment in productive sectors.
“This is a good move. Use of the idle reserve for financing mega projects to benefit for the economy,” Dr AB Mirza Azizul Islam, a leading economist of the country, told The New Nation on Saturday.
He said surplus foreign exchange reserve is nothing but a burden for the economy when it cannot be utilized for productive purpose. “The use of foreign reserve would help meet the government’s much needed financing requirement for mega projects as well as bring part of the ‘hefty reserves’ into investment ensuring its proper utilization,” he added.
Dr AB Mirza Azizul Islam, a former Finance Adviser of the Caretaker Government, however, suggested the government for proper utilization of borrowed fund from the foreign reserve and timely implementation of projects to be financed from the reserve to avert any kinds of adverse economic consequences.
He also urged the government for ensuring accountability and transparency while utilising the reserve fund.
Finance Minister AMA Muhith on Thursday said the government is looking forward to borrowing up to $5 billion from the forex reserves to implement mega projects by issuing special instruments like dedicated sovereign bonds.
Muhith came up with the disclosure while talking to the reporters at his office after officials of Bangladesh Bank submitted a detailed framework for government’s borrowing from the reserves.
“We can use our reserves up to $5.0 billion. Initially, we can start with a few billions to meet the fund requirement for mega projects,” the Finance Minister said.
“The current level of forex reserve is beyond our needs. It puts a downslide risks on the economy. The large and excessive reserve does not yield benefits on the economy unless it could be diverted into the investment to productive sectors,” Dr Salehuddin Ahmed, former BB Governor told The New Nation yesterday.
“In my mind, the government takes the right policy decision by moving forward the idle reserve into investment,” he added.
“We have the ability to pay more than seven months import payments, so, it is good decision of the government to utilise the excess reserve fund for developing the country’s country’s infrastructure,” Dr Ahsan H Mansur, Executive Director of the Policy Research Institute told The New Nation yesterday.
“The government may have taken the right decision, but it should ensure timely return of the funds by avoiding unusual delay in implementing the projects to be financed by funds from the reserves,” Dr Ahsan H Mansur, Executive Director of the Policy Research Institute told The New Nation.
Dr Mansur earlier prepared a concept paper on how to create a ‘Sovereign Wealth Fund’ by utilising the central bank’s foreign exchange reserve to implement the country’s big development projects.
Mansur said that based on recent global experience with Sovereign Wealth Funds and the repaid reserve build up of the BB, government could establish a ‘Bangladesh Sovereign Wealth Fund’ initially with an asset base of about US$ 5 billion.
He noted that the nature of the fund with asset base less than US$ 5 billion could be more like an infrastructure investment fund since it will be dedicated to domestic infrastructure investment.
He said that a new law could be enacted to establish and govern the fund.
Mansur suggested for forming a body with efficient management and professional management team to operate the fund.
Economists on Saturday praised the government’s move to borrow from the central bank’s foreign currency reserves for implementing mega development projects.
They also urged the government to form a dedicated body comprising experts from private and public sector to manage and govern the fund properly to ensure its maximum benefit on the economy.
Economists earlier called upon the government for managing the country’s foreign exchange reserve more rationally, suggesting portions of the reserve to be used for productive purposes including financing of development projects.
Economists came up with the suggestion following huge buildup of foreign exchange reserve upto $31.54 billion in the central bank, saying such a big reserve could leave an adverse impact on economy unless it is not properly managed and channeled through investment in productive sectors.
“This is a good move. Use of the idle reserve for financing mega projects to benefit for the economy,” Dr AB Mirza Azizul Islam, a leading economist of the country, told The New Nation on Saturday.
He said surplus foreign exchange reserve is nothing but a burden for the economy when it cannot be utilized for productive purpose. “The use of foreign reserve would help meet the government’s much needed financing requirement for mega projects as well as bring part of the ‘hefty reserves’ into investment ensuring its proper utilization,” he added.
Dr AB Mirza Azizul Islam, a former Finance Adviser of the Caretaker Government, however, suggested the government for proper utilization of borrowed fund from the foreign reserve and timely implementation of projects to be financed from the reserve to avert any kinds of adverse economic consequences.
He also urged the government for ensuring accountability and transparency while utilising the reserve fund.
Finance Minister AMA Muhith on Thursday said the government is looking forward to borrowing up to $5 billion from the forex reserves to implement mega projects by issuing special instruments like dedicated sovereign bonds.
Muhith came up with the disclosure while talking to the reporters at his office after officials of Bangladesh Bank submitted a detailed framework for government’s borrowing from the reserves.
“We can use our reserves up to $5.0 billion. Initially, we can start with a few billions to meet the fund requirement for mega projects,” the Finance Minister said.
“The current level of forex reserve is beyond our needs. It puts a downslide risks on the economy. The large and excessive reserve does not yield benefits on the economy unless it could be diverted into the investment to productive sectors,” Dr Salehuddin Ahmed, former BB Governor told The New Nation yesterday.
“In my mind, the government takes the right policy decision by moving forward the idle reserve into investment,” he added.
“We have the ability to pay more than seven months import payments, so, it is good decision of the government to utilise the excess reserve fund for developing the country’s country’s infrastructure,” Dr Ahsan H Mansur, Executive Director of the Policy Research Institute told The New Nation yesterday.
“The government may have taken the right decision, but it should ensure timely return of the funds by avoiding unusual delay in implementing the projects to be financed by funds from the reserves,” Dr Ahsan H Mansur, Executive Director of the Policy Research Institute told The New Nation.
Dr Mansur earlier prepared a concept paper on how to create a ‘Sovereign Wealth Fund’ by utilising the central bank’s foreign exchange reserve to implement the country’s big development projects.
Mansur said that based on recent global experience with Sovereign Wealth Funds and the repaid reserve build up of the BB, government could establish a ‘Bangladesh Sovereign Wealth Fund’ initially with an asset base of about US$ 5 billion.
He noted that the nature of the fund with asset base less than US$ 5 billion could be more like an infrastructure investment fund since it will be dedicated to domestic infrastructure investment.
He said that a new law could be enacted to establish and govern the fund.
Mansur suggested for forming a body with efficient management and professional management team to operate the fund.
