Pulack Ghatack
Finance minister AMA Muhith yesterday said that the global economic recession has started biting Bangladesh, a view, which has been opposed by former Finance and Planning Adviser of the erstwhile caretaker government Dr Mirza AB Azizul Islam.
“There is a negative effect of the global economic meltdown on the sectors of jute, jute-made goods, frozen items, knitwear and woven clothes industries,” Muhith said after a meeting with representatives of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
Mirza Azizul Islam on the other hand told the New Nation yesterday that Bangladesh economy was still unhurt by the global economic recession and he found no immediate possibility of suffering the global shock.
Dr Aziz said, “I think the overall economy is still unaffected by the global recession. But, if the recession continues long it may create problem in future.”
IMF and other policy makers of the government also contradicted the Finance Minister’s speech yesterday.
The policymakers yesterday informed a visiting IMF senior executive Thursday that the country’s economy was still immune from the effects of the global recession while its exports, remittance inflows and agriculture production also remained strong.
Bangladesh would not take any financial support now from the International Monetary Fund (IMF) as the policymakers feel that the economy does not need such assistance to face global recession.
“The recession has not yet affected our economy, but it will,” Prime Minister’s Economic Affairs Adviser Dr Mashiur Rahman said, emerging out of a meeting between Finance Minister AMA Muhith and visiting IMF director for Asia Pacific Department Anoop Singh at the Finance Ministry.
“Nobody can say till now to what extent the impact will be.”
Meanwhile, a high-level committee is in the offing early next month to assess the possible setback and suggest remedial measures.
IMF director Anoop Singh agreed with the policymakers of Bangladesh that the economy is unlikely to be affected by the recession in the current fiscal year. The country’ s readymade garment export remained well-positioned compared to its competitors due to lower-end products, Singh said.
“We’re ready to help countries across the world with increased resources. But in case of Bangladesh, exports and remittance inflow remained strong. There’s no such problem here,” the IMF official told a press briefing on his visit at the Bangladesh Bank Conference Hall. He said that for the month of December, exports were negative in many countries and compared to those countries, the performance of Bangladesh was very good while the order book until April remained quite strong.
“Bangladesh has advantage but you (Bangladesh) have to keep in mind that it’s a great recession,” said Singh. “My feeling is that it is not going to affect Bangladesh economy suddenly. So, the government will get time to take measures.”
He said that they were reassured during the meetings that Bangladesh is somewhat protected from the global recession because the country does not have foreign loan dependence while the prices of food and fuel oil in the domestic market declined substantially.
After the policy meeting AMA Muhith also said that the economic condition of the country remained good so far and there was nothing to be worried about the impact during the current fiscal year. “We’ll have to think about the next fiscal year,” he said.
AMA Muhith just last week had said that Bangladesh was still insulated from global economic downturn.
The minister on February 3 said Bangladesh’s economic indexes were still sound and GDP growth was forecast to be above 6 percent for FY 2008-09.
The Finance Minister, however, changed his position after holding meeting with The BKMEA representatives, who asked for an increase in cash assistance and facilities in export and other sectors.
BKMEA president Fazlul Huq said, “We are seeing an adverse impact on the knitwear sector as foreign orders have plummeted.”
He said compared with December 2007, export went down by 2.5 percent in December 2008. But, it increased 22 percent in December 2007 comapred with the same month of 200.
Courtesy: nation.ittefaq.com
