Energy Advisor Muhammad Fauzul Kabir Khan has said that ensuring good governance and accountability is essential for sustainable development of Bangladesh. He said that many of those who have become rich in the country have not paid back their bank loans. For a long time, special beneficiaries have become rich through ‘crony capitalism’, which has weakened the economic structure. However, he did not blame only the businessmen, saying that the system has been like this for many years. Businessmen will build wealth through production and innovation – this is what should happen. He also said that the government will open more opportunities for private sector development and investment.
He made these comments while speaking as the chief guest at the ‘Investment Dialogue with Local Partners’ program organized by the Bangladesh Investment Development Authority (BIDA) on Thursday (December 4). Bangladesh Bank Governor Dr. Ahsan H. Mansur was the special guest at the program.
Governor Dr. Mansur said that the country’s economic policies are formulated independently and are not dependent on the instructions of the IMF or the World Bank. He warned that if all the conditions of the IMF were followed blindly, the dollar exchange rate could have reached 170-180 taka—as has been seen in Pakistan and Sri Lanka.
He said that inflation is likely to come down to 5 percent by the end of the current 2025-26 fiscal year. Accordingly, the policy interest rate will be stabilized at 8-9 percent and the interest rate on bank loans at 10-11 percent. However, he also warned that if interest rates are reduced without controlling inflation, instability may arise in the currency market. Citing the examples of low interest rates in India and China, he said—their economic reality is different from Bangladesh.
Dr. Mansur also said that during the previous government, important economic data was distorted. According to the official figures, inflation was in single digits, while in reality it was 12-13 percent. Defaulted loans used to be shown in single digits, while the actual rate was around 35 percent. He said that now these data have been corrected and the financial sector has been brought back to transparency.
Regarding the restructuring of defaulted loans, he said that 1,300 applications have been received by Bangladesh Bank, out of which 250 have been approved. The rest have been sent to the concerned banks. Expressing hope that defaulted loans will reduce by 5 percent by next March, he said that it will take another 8-10 years to bring the entire defaulted loan to a sustainable level.
Regarding debt recovery by selling industrial assets, he said that no industry should be put on trial for personal corruption. Citing the example of the SS Power Plant of the Salam Group, he said that this project with an investment of $2.5 billion has 80 percent foreign ownership and even if the project is operational, the company will not get profit; all the income will go towards repaying the loan.
Also present at the event were Lutfe Siddiqui, Special Envoy of the Chief Advisor on International Affairs, and NBR Chairman Mohammad Abdur Rahman Khan. The meeting was chaired by Chowdhury Ashiq Mahmud bin Harun, Executive Chairman of BIDA and BEZA.
