Finance Minister AMA Muhith has criticised some development partners’ proposal for raising interest on their credits due to the the country’s recent promotion to lower middle-income status by World Bank.
He said the World Bank announced Bangladesh’s graduation to lower middle-income status, but according to United Nations criteria, Bangladesh is yet to become a middle-income country.
“This misconception should be removed,” he said adding that the facilities the country enjoys as an LDC can be cut only after it becomes a middle-income nation by 2021.
Finance minister made the remarks at a meeting on mid-term review of the implementation of the Istanbul Programme of Action for the LDCs at the Economic Relations Division office yesterday.
Muhith said some of the development partners have already given notices to increase their rate of interests on loans.
He said Japan, one of the largest bilateral development partners of Bangladesh, has already consulted with the government about raising interest rates.
“But I have told them that we’re not at all in such position (giving higher interests,” finance minister said.
The World Bank in July this year made the announcement as Bangladesh’s per capita Gross National Income crossed $1,314.
Since 1975, however, Bangladesh has been classified as an LDC by the UN Committee for Development Policy (UNCDP).
“The review meeting of UNCDP in this regard would be held in 2018 when the UN might consider Bangladesh’s promotion to a lower middle-income country,” Muhith said.
“Then it would take another three more years for final declaration. So, we will not become a middle-income country before 2021,” he added.
The report on the implementation of IPoA in Bangladesh has been prepared for the UN-convened high-level mid-term review of IPoA to be held in Turkey in June 2016.
According to the draft report, by 2015, Bangladesh has stepped forward in achieving two of the three graduation criteria from the LDCs for the first time.
Since 2000 the review of the Committee for Development Policy of UNDESA, Bangladesh has remained at or above the graduation threshold value of Economic Vulnerability Index.