Finance Minister AMA Muhith said last week that the government is actively considering using forex reserves in financing mega projects. Many belie the idea is good but the practice may also become a boomerang if the money is spent without transparency and strict accountability to concerned watchdog bodies.
The risk point is that the government has already borrowed too much from commercial banks and the volume of domestic debt liability is phenomenally on the rise. Now the government is eyeing on the reserves of the central bank to suggest that faulty project selection and laxity in loan operation and fund management may probe a catastrophe at the end. But there is also the question that why so much money will remain unutilized when the country has so many big project that needs funding.
Muhith said on Tuesday last that the government is considering borrowing from the foreign currency reserves from next fiscal year and using the amount in mega projects.
He made the disclosure at Bangladesh Bank remittance award distribution ceremony, held at Bangla Academy.
“Serious thoughts are being given to the idea and it can be said with certainty that a clear-cut framework will be placed in the next budget.” He said the country has over $31billion reserves at the moment and it is rising.
The central bank will not have to bear any risk; the government will bear it. The BB will be given a profit against the amount borrowed, he said. The terms and conditions and the type of projects for which the amount will be used will be elaborated in the next budget, he said.
At the event, 31 expatriate Bangladeshis and four exchange houses were given best performance awards. The expatriates residing in Qatar, the USA, Canada, Russia, Fiji and the UK are among the awardees, with the highest remitter living in the UAE.
The exchange houses that received the awards are based in the US, Italy and the
UK.Among the awardees, eight send their remittances to Janata Bank, four to Standard Chartered Bank, three to Sonali Bank and three to HSBC.
The awardees are: Zakir Hossain (Kuwait); Md Shafique, Oliur Rahman, Syed AK Anwaruzzaman, Md Akhter Hossain, Md Selim, Zagir Hossain Chowdhury, Md Nazmul Huda, Md Azam, Abdul Wahhab, Md Shahabuddin, Md Mahtabur Rahman, Omar Faruque, Jesmine Akhter (the UAE); Md Muhibul Bari, Arif A Chowdhury, Asif A Chowdhury (the US); Abu Taher Md Amanullah (the Philippines); SM Parvez Tomal (Russia); Abu Md Zakaria (Fiji); Md Ali Reza (Canada); and Md Murshid Uzzaman (Hong Kong).
The four exchange houses that received awards are: Placid NK Corporation, National Exchange Co, SEC Money Transfer House, KMB International Money Transfer Ltd.
At present, around one crore Bangladeshis live in 160 countries and every year around 5 lakh people are going abroad BB governor Fazle Kabir said on the occasion.
Remittances sent by expatriates are several times higher than foreign aid and foreign direct investment Bangladesh receives each year. The remittance sent in by the expatriates has become a major pillar of the country’s economy,” he said, while urging the expatriates to send their remittance through legal channels.