Prime Minister’s Economic Adviser Mashiur Rahman said the government has enough strength to borrow foreign currency from the central bank to carry out quasi-fiscal operation like implementation of Padma Bridge project.
“The basic question is if you have a saving in terms of foreign currency reserve, can you use it without exposing yourself to a shock that you can absorb in terms of foreign currency requirement. I guess right now, we have that kind of strength,” he said at a dialogue organised by Policy Research Institute in the city yesterday.
Currently, Bangladesh Bank has about $20bn foreign exchange reserve and the government is planning to borrow a portion of it to finance Padma Bridge project.
But the government drew criticism from experts that forex reserve is not meant for infrastructure project rather it is meant meeting import payments and providing a cushion for balance of payment.
The adviser, however, said there was a big debate between a former Reserve Bank of India governor and a chairman of Indian Planning Commission who argued that forex reserve should be used for infrastructure development and the RBI chief opposed it.
“Later on, Indian central bank governor proved to be right,” Mashiur said.
He said infrastructure, utility, power, energy, connectivity and land scarcity are serious constraints which are holding back investment from private sector.
“These are the constraints to be addressed by the government,” he added.
The adviser said the opposition parties should go by the constitution and the court verdict which stipulated that the government must be formed by elected members.
“One of the major rhetorical differences between the BNP and the Awami League is who is more Islamic. The BNP claiming to be more Islamic may carry this message that you do not perform even a religious duty if that disturbs peace in society,” he added.
Former adviser to the caretaker government Mirza Azizul Islam said there is a need for political stability for future growth. “Political understanding is needed otherwise all the achievements we have earned will be meaningless,” he said.
BNP leader and former commerce minister Amir Khasru Mahmud Chowdhury said private sector has taken a policy of ‘wait and see’.
“There is a lack of democracy in the country and an autocrat is talking about development, mega projects and other things.”
Women entrepreneur Selina Matlub said corruption and access to finance are two big problems the private sector is facing.
Former Bangladesh Bank governor Salehuddin Ahmed said financial sector management is very poor in the country.
Managing Director of Standard Chartered Bangladesh Abrar A Anwar said policy continuity, scarce land and infrastructure are three major hindrances to private sector investment.
Ahsan Mansur of PRI in his presentation said political stability and rule of law are critical to business.
The government should give special attention to attract more foreign direct investment and broaden export base by correcting policies leading to anti-export biases, he said.
