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After Lanka and Pakistan, now Bangladesh lines up before IMF for bailout

Published

4 years ago

2022/08/7

After the collapse of the Sri Lankan economy, attention has turned to the state of affairs in other South Asian countries such as Pakistan, Bhutan and Bangladesh. All three countries have either curtailed imports or are planning to do so, to salvage their fast-depleting foreign exchange reserves and avoid a Lanka-like forex crisis.

While the presence of Pakistan, which is deeply indebted to China like Lanka, and tourism-dependent Bhutan has taken a massive blow from the pandemic-induced travel restrictions on the list of troubled economies is not surprising, that of Bangladesh is. Just last year, the tiny nation was celebrated for beating India in per capita income.And the UN decided to graduate it from the least-developing country category to the developing country grouping by 2026.

Bangladesh seems to have lost that momentum as Dhaka is now beseeching the IMF for a $4.5 billion bailout package to tide over its deepening economic crisis.It has also knocked the doors of the World Bank and Asian Development Bank seeking immediate relief of $1 billion from each.So, what went wrong? Bangladesh’s $ 416 billion economy is heavily dependent on its garment industry which survives on exports mostly to Europe, the US and Latin American countries.

It has been supporting the country’s growth for years but things changed dramatically following the Ukraine war pushing the prices of everything up. In response to the soaring energy prices, the Sheikh Hasina-led government was forced to introduce scheduled outages that directly impacted the textiles industry which relies on an uninterrupted power supply. On the other hand, demand also dwindled as retailers in the US and European markets — the biggest customers of Bangladesh’s garment products — started holding or cancelling orders due to disruptions and uncertainties in their own economies due to the war in Ukraine.

According to the latest available data, Bangladesh’s foreign exchange reserves stand at $39.67 billion as of July 20, which is sufficient for just four months’ worth of imports — slightly higher than the IMF’s recommended three-month cover.Just for comparison, the forex reserves were $ 45.5 billion in the year-ago period.

The country is reeling under inflation, too. In June, price rise hit a nine-month high of 7.56%, taking the average inflation for 2021-22 to 6.15%, overshooting the revised annual target of 5.9%.Bangladesh’s imports stood at $81.5 billion between July 2021 and May 2022, up 40% from a year earlier, according to Bangladesh Bank data.As a result, the current account deficit — the shortfall between exports and imports — widened over six times to $17.2 billion in the first 11 months of fiscal 2021-22.

While the Bangladesh finance minister A H M Mustafa Kamal is confident that the IMF aid will help the country tide avoid a crisis, such bailouts always come with strings attached. The Washington-based multilateral lender is known to put stringent conditions for its loans.

According to a report in The Daily Start newspaper, the conditions could include withdrawal of energy subsidies, implementing a fuel pricing mechanism, removing interest rate caps on lending and borrowing, resetting the mechanism to calculate foreign currency reserves, taking steps to increase revenue base, and strengthening corporate governance in the banking sector.

Of these, removing energy subsidies for consumers will be a major challenge for the government as it could trigger public anger. Negations on this clause is likely to drag the process.Obtaining IMF loans is a long process. An IMF delegation is expected to visit Dhaka in September to discuss the terms and conditions.By December, the deal is expected to be locked in for placing at the IMF’s board meeting in January. The question is, will Dhaka be able to manage things till then. (NIE)

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Advisory for Heavy Rain issued for the Central, Uva, Sabaragamuwa, Eastern and North-central provinces and in Galle and Matara districts

Published

3 hours ago

2026/02/22

Priyan

Advisory for Heavy Rain Issued by the Natural Hazards Early Warning Centre at 08.30 a.m. on 22 February 2026 valid for the period until 08.30 a.m. 23 February 2026

Due to the influence of the low level atmospheric disturbance in the vicinity of Sri Lanka, Heavy showers above 100 mm are likely at some places in Central, Uva, Sabaragamuwa, Eastern and North-central provinces and in Galle and Matara districts.

Therefore, general public is advised to take adequate precautions to minimize damages caused by heavy rain, strong winds and lightning during thundershowers

News

Matara Festival for the Arts’ inaugurated by the Prime Minister

Published

9 hours ago

2026/02/22

Priyan

The inaugural ceremony of the Matara Festival for the Arts, featuring a wide range of creations by local and international artists, was held on February 19 at the Old High Court premises of the Matara Fort, under the patronage of Prime Minister Dr. Harini Amarasuriya.

The festival, centred around the Old High Court premises in Matara and the auditorium of the Matara District Secretariat, will be open to the public from 20 to 23 of February. The festival will be featured by visual art exhibitions, short film screenings, Kala Pola, and a series of workshops conducted by experts.

The inaugural event was attended by the Minister of Women and Child Affairs, Ms. Saroja Paulraj, along with artists, guests, and a large number of schoolchildren.

(Prime Minister’s Media Division)

News

Only single MP refuses salary as Parliament details pays and allowances

Published

13 hours ago

2026/02/22

Thilina Walpola

SJB Badulla District MP Nayana Wasalathilake is the only MP to forego salary and allowances, with all payments suspended following his written notification on August 20, 2025.

Only one Member of Parliament has chosen not to receive the salaries and allowances entitled to MPs, Prime Minister Dr. Harini Amarasuriya revealed in Parliament last Thursday, shedding light on the financial perks enjoyed by members of the Tenth Parliament.

Speaking on Thursday (Feb. 19) in response to a question from SJB Badulla District MP Chaminda Wijesiri, the Prime Minister outlined the full range of pay and allowances provided to parliamentarians.

According to Dr. Amarasuriya, MPs receive a monthly allowance of Rs. 54,285, an entertainment allowance of Rs. 1,000, and a driver’s allowance of Rs. 3,500—though MPs provided with a driver through the Ministry of Public Security and Parliamentary Affairs are not eligible for the driver’s allowance.

Additional benefits include a telephone allowance of Rs. 50,000, a transport allowance of Rs. 15,000, and an office allowance of Rs. 100,000. MPs are also paid a daily sitting allowance of Rs. 2,500 for attending parliamentary sessions, with an additional Rs. 2,500 per day for participation in parliamentary sittings and Rs. 2,500 per day as a committee allowance.

Committee meetings held on non-parliament sitting days also attract Rs. 2,500 per day.

Fuel allowances are provided based on the distance between an MP’s electoral district and Parliament. National List MPs are entitled to a monthly allocation equivalent to 419.76 litres of diesel at the market price on the first day of each month.

Despite the comprehensive benefits, only SJB Badulla District MP Nayana Wasalathilaka has opted not to draw a salary or allowances. Dr. Amarasuriya said that in accordance with a written notification submitted by MP Wasalathilaka on August 20, 2025, payments have been suspended since that date.

The Prime Minister also confirmed that she, along with the Speaker, Deputy Speaker, committee chairs, ministers, deputy ministers, the Opposition Leader, and senior opposition whips, have all informed the Secretary-General of Parliament in writing that they will not claim the fuel allowance.

Challenging the ruling party’s voluntary pledge to forgo salaries, MP Wijesiri pointed out that all MPs except Wasalathilaka continue to receive their salaries and allowances. “On one hand you speak about the people’s mandate, which is good. But the mandate also included people who said they would voluntarily serve in this Parliament without salaries. Today we have been able to prove, Hon. Speaker, that except for one SJB MP, the other 224 Members are drawing parliamentary salaries,” he said.

The Prime Minister responded by defending the political culture and practice of allocating portions of MPs’ salaries to party funds. Referring to previous practices by the JVP and NPP, she said: “It is no secret to the country that the JVP has for a long time not personally taken MPs’ salaries or any allowances. I think the entire country knows that these go to a party fund. That is not new, nor is it something special to mention. The NPP operates in the same way. That too is not new; it is the culture of our political movement.”

When MP Wijesiri posed a supplementary question asking whether diverting salaries to party funds was an indirect method of taking care of MPs, Dr. Amarasuriya said: “There is no issue there. No question was raised; the Member made a statement. What we have seen throughout this week is an inability to understand our political culture and practice, and a clash with decisions taken by political movements that misused public funds. What is coming out is a certain mindset. That is why there is such an effort to find fault with the 159. None of these facts are new to people. He did not ask a question, so I have nothing to answer.”

The disclosures come days after the Government moved to abolish the parliamentary pension, a measure that has sparked renewed debate over MP compensation and the transparency of funds allocation.