Principal Secretary to the Prime Minister Dr. Ahmad Kaikaus said that no proposal of ‘bailout’ has been given to the International Monetary Fund (IMF) by the Government of Bangladesh. He said that Bangladesh is not in a situation of asking for a ‘bailout’. We have sufficient foreign exchange reserves to cover our import expenditure for more than five months.’ However, as a balance of payment and budget support, a loan with easy terms has been requested from the organisation, he said.
He said these things in a press briefing organised in his office room at the Prime Minister’s office on Wednesday (27 July).
Ahmad Kaikaus said, ‘I have a strong objection to this word ‘bailout’. Mass media are reporting that a bailout has been requested. The matter is very unwelcome and hurt our self-esteem. The Ministry of Finance has asked for assistance only in the deficit of the balance of payments increases in the future due to the global situation. It is a loan with easy terms. Several times in the history of Bangladesh, such loan assistance has been taken from the IMF.
The Principal Secretary to the Prime Minister also said that budgetary support has been taken from World Bank, Asian Development Bank (ADB), JICA, and IMF during the COVID-19 crisis. No one criticised back then. The balance of payment assistance of USD 732 million has been taken from the IMF during the COVID-19 period, and its repayment has also started. So if we take such loan assistance due to the current global situation, it should not be a bad thing. Not a crime either. We can ask for this loan with our heads held high.
Ahmad Kaikaus said that four types of funding support are regularly available from the IMF. It is discussed with us every year. Balance of payment and budget support have been proposed this time too. In addition, it will be spent on combating climate impacts. As our debt repayment capacity has increased, we are now getting budget assistance loans instead of project-based loans. This means we can spend this money as per our choice. This is a good thing for us.
Noting that some are reporting that rent has to be paid before India’s Adani Group power plants into production, he said that this is not correct. No rent has to be paid before going into production. We will not pay any rent until each power plant is in production.
Regarding giving capacity charge to the power plant, he said that this system exists not only in Bangladesh but worldwide. In terms of electricity, 65% of the charge is for fuel and 35% is for investment. He commented that there is a need to keep capacity charges for domestic and foreign investments.
In response to a question, he said that if there is an opportunity to buy fuel oil from any country at a low price, Bangladesh will try to take that opportunity. Besides, capacity charges do not have to be paid to many fuel-powered power plants, he said.
