Bangladesh will not face the same economic crisis as Sri Lanka as the country's economy is on the "right track" to achieve sustainable growth, experts say.
"Bangladesh's macroeconomic management is very good. In addition, the debt-to-GDP ratio is in a tolerable position. So there is no reason to fear. Bangladesh is in a better position than Sri Lanka. Bangladesh will not be in crisis like that in Sri Lanka," the Asian Development Bank (ADB) Bangladesh Country Director Edimon Ginting said.
He made the remarks in response to a question from reporters at the launch of the ADB report "Asian Development Outlook (ADO) 2022" on Wednesday.
Ginting advised Bangladesh to be careful on two issues.
These include strengthening debt management policies and increasing internal revenue collection, he mentioned.
However, the Indian Ocean island nation of Sri Lanka is going through the worst economic recession in history.
As the economy of the country of 20 million people collapses, it is not only the repayment of foreign debt installments in uncertainty, but also cut off the facilities of the citizens. Political crisis has been created.
When the people of the country are blowing against the government, there is talk in Bangladesh, whether there is such a threat in front of this country or not.
However, considering the various media reports and economic analysts pointing out the causes of the Indian Ocean island nation's catastrophe, it is clear that these risks are not the same in the case of Bangladesh.
Bangladesh does not have a single reason for the catastrophe of Sri Lanka.
One of the reasons for that country's catastrophe has been the collapse of the tourism sector due to Corona.
More than 10 percent of the country's GDP was earned from this sector. It has come down to almost zero for two years.
Besides, export earnings and remittances had declined during the Corona period. With the introduction of organic farming, production has declined.
In the meanwhile, the reserve has come under great pressure to repay the installments of foreign loans taken for various mega projects.
It has come down to two billion dollars. The country does not have the amount of foreign currency to be paid this year.
On the other hand, Bangladesh's reserves, remittances and exports in Corona are moving upwards and agricultural production has increased.
Economic analysts have never said that Bangladesh does not have tourism dependence, on the other hand mega projects taken by Bangladesh will not be economically profitable.
Replying to a question on the latest crisis in Sri Lanka, the Planning Minister MA Mannan said on Tuesday while briefing the reporters after the Executive Committee of the National Economic Council (Ecnec) meeting that Bangladesh does not spend money on any unnecessary projects.
“Considering the economic situation and social aspect, you do not compare Bangladesh with Sri Lanka. Some people are putting Sri Lanka on Bangladesh, it is not right,” he mentioned.
Bangladesh and Sri Lanka are completely two different economies and their fundamentals are also different, he added.
“We are keeping a close eye on the remarks of the experts and researchers and we should be careful. But, I think there is not any reasonable doubt to think like that.”
Dr AB Mirza Azizul Islam, eminent economist and former adviser to a caretaker government, told Bangladesh Post, “There is no comparison between the economy of Bangladesh and Sri Lanka. The nature of the two is different. Bangladesh has no shortage of production. Besides, export earnings and remittances were not affected in the country. The main food product is also not dependent on imports. And Bangladesh's foreign debt is not as high as Sri Lanka's per capita.”
Repayment of foreign loan installments is not creating any pressure in the case of Bangladesh, he said, adding that the country's reserves have also risen steeply compared to that in Sri Lanka.
Bangladesh has not made any mistake like that of Sri Lanka, he mentioned.
Asked whether he fears any collapse in Bangladesh's economy in the near future, Azizul Islam said, “These are unreasonable and not realistic. There is no basis for such fears. Bangladesh is on the right track. There is no reason for Bangladesh to be like Sri Lanka.”
He said, “The Padma Bridge will be launched in June, Metro Rail, Bangabandhu Tunnel and some other special economic zones will also be launched this year." The launch of these projects will add a new dimension to the development of Bangladesh. I don't think we have to look back.”
However, in the current 2021-22 fiscal year, Bangladesh's gross domestic product (GDP) grew at a rate of 6.9 percent, the ADB said, adding that Bangladesh's economy is on the "right track" to achieve sustainable growth.
