Bangladesh is facing a serious challenge because of general strikes and uncertainties associated with the upcoming election, International Monetary Fund said Sunday.
The IMF said that the political uncertainties would slow down the growth.
The lender was approving disbursement of US$140 million, fourth trance of the Extended Credit Facility deal with the country.
Besides, it identified that higher costs, upgrading labour and safety standards in the ready made garment sector were critical.
A government appointed wage board has recommended Tk 5,300 as the lowest wage for the RMG workers under a new pay structure to be implemented from the current month.
Besides, the RMG owners are forced to improve safety standards in line with the government commitment to the international labour organization and the importing nations.
The IMF suggested that strong policy framework on the economic front was needed in the run-up to the national election and beyond to overcome adverse impacts.
With the latest disbursement Bangladesh would receive US$561.4 million under the three-year deal with the IMF. The decision was taken at an IMF board meeting last Wednesday.
IMF deputy managing director Naoyuki Shinohara said progress had been made in lowering subsidies, raising development spending, improving public financial and debt management.
‘Strikes and uncertainty associated with the upcoming elections, an attendant slowdown in growth, and an expected transition in the garment sector to higher costs and upgraded labor and safety standards, pose challenges ahead,’ he said.
Naoyuki Shinohara observed that Bangladesh Bank should fully utilize its enhanced supervisory powers to bolster financial stability.
‘The program for reforms at the state-owned commercial banks should be firmly advanced, backed by recapitalization,’ he said.
The state-owned commercial and specialized banks have long demanding for recapitalization to overcome the liquidity crisis caused by scams, soaring bad loans, and unrealized payments from the government entities.
Sonali Bank, the largest state-owned commercial bank could not realize a single penny in the last one year after Tk 3,500 crore was swindled from its branch by little known Hallmark Group.
BB was forced to appoint an observer on Thursday for BASIC Bank to monitor its activities as the financial health of the scam-hit state-run specialized bank worsened in the last few months.
BASIC Bank signed a memorandum of understanding with the BB as the financial health of the bank declined significantly over the last and half years due to loan scam and corruption that pushed up the classified loans in the bank by 101.77 per cent to Tk 1,863.33 crore as of September 30 from Tk 923.47 crore as of June 30.
Janata Bank, the second largest state-owned commercial bank, is also facing problems since Tk 1,200 crore was embezzled from its branch and a few private banks by Bismillah Group.
-With New Age input
