Bangladesh's public debt-to-GDP (gross domestic product) ratio was well below the danger threshold, according to the International Monetary Fund (IMF), making it eligible for more foreign loans.
They were speaking at a seminar organized by the Economic Relations Division (ERD), adding that it was possible to accelerate development by increasing the amount of loans from abroad as the debt repayment pressure is at a bearable level.
Due to lack of proper survey, poor design, inefficiency in negotiations with donor agencies and slow implementation of projects, however, this possibility was fading as a huge amount of promised aid was stuck in the pipeline, they feared.
Speaking at the seminar on foreign debt management to ensure good governance under the Knowledge-for-Development Management project funded by the United Nations Development Organization (UNDP) held at the NEC Conference Center in the capital on Sunday, chief guest Planning Minister MA Mannan said foreign debt was playing a central role in development.
He, however, advised caution on excessive borrowing.
Highlighting the need to take foreign loans until the country attains development, State Minister for Planning Shamsul Alam said the foreign debt was 13% of GDP and there was scope to double it.
He said foreign loans are available at lower interest rates than domestic ones.
Sounding caution on such loans, however, Alam pointed out that foreign loans are available at 0.70% to 1.5% interest, while domestic ones would range to 7%.
Regarding the proper management of debt, the state minister said that there was a lot of criticism of foreign debt.
Secretary of the Cabinet Division Khandkar Anwarul Islam claimed any corruption in foreign loans stemmed from the weakness and inefficiency of the ERD.
Expressing his anger at the loan agreement process of ERD, he said the ERD entered into loan agreements without complying with the law.
The cabinet secretary also asked to know about the process of foreign debt remittance.
Anwarul Islam said irregularities of Tk70-80 crore in the project were created from here. As a result, lenders also work as contractors.
This results in increased costs in projects, irregularities and time in procurement.
He also said that ERD's loan agreements were contradictory. Many times a contract was signed after midnight.
He said if someone files a case objecting to this, the parties concerned may be in trouble.
ERD Secretary Sharifa Khan, Planning Secretary Mamun Al Rasheed, IMED Secretary Abu Hena Morshed Zaman and officials of the Ministry of Planning and ERD were present during the seminar.
