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PM Alerts to Save Money Amid Tough Days Ahead

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Prime Minister Sheikh Hasina on Tuesday, 11 October reiterated all to make their best effort to boost food production amid a strong prediction that the world may face a severe food crisis followed by calamity next year.

PM says, during my recent visits to the UK and the USA I had talked to many world leaders and heads of organizations, and everybody was very much anxious about the food security. They think that 2023 will be a very dangerous year when there might be calamities and food crisis.”

She made the statement while delivering her introductory speech at the weekly meeting of the Executive Committee of the National Economic Committee, ECNEC held at the NEC Bhaban in Dhaka. The Prime Minister joined the meeting virtually from her official residence –Ganabhaban. Ecnec is an executive committee under the Cabinet Division to verify and approve all national important development projects.

“We must increase food production and preserve those. We must give special attention to preserving and processing food. Our land is very much fertile, and we have to increase our food production,” she added.

She reiterated her call to maintain austerity in every sphere of life, avoiding any unnecessary expenditure.

“All have to be alert and maintain austerity in using electricity, fuel, water, gas and everything else. I will request every family to go for savings in whatever they can. And this is applied to our government also,” she said.

She said that the government will not go for any unnecessary expenditure.

“We will just use whatever we need, not more than that. We do not have any scope for that. Because I saw anxiety among world leaders and heads of organizations. So, we must maintain enough cautionary steps,” she said.

The Prime Minister said that the country must be advanced, overcoming all odds, and the government will do that as long as people are with them.

“People are the biggest power for us. We do not have any tension as long as people are with us. We have to encourage the people and utilize them as we did while facing the coronavirus pandemic,” she said.

She said that the country needed to be free from the impact of recession that is coming from Ukraine war.

Sheikh Hasina also requested the Planning Commission not to spend their valuable time discussing inflation every time.

“Because many countries around the world do not discuss this often, The USA and the European countries as well,” she said.

“We also do not need any extensive discussion on this, but efforts should be there to keep prices of essentials within people’s reach. We will do whatever is needed,” she said.

About undertaking any projects, she said that all must think about the maximum benefit for the people.

“There is no need to hop in to undertake any unnecessary project when the fund is available. We have to take any project after very careful scrutiny so that we could get some return from that project, which will be beneficial to the country. We will take that type of project,” she said.

“I did not take any project like that, we were always cautious regarding that matter. We have to remain careful in the near future,” she said.

She added that her administration has a commitment to the people. “We feel that, we work for that.”

The Prime Minister stressed the need for completing the ongoing projects as quickly as possible, even if they need some extra money.

“If we complete the projects, we will be able to get benefits from those projects and the economy of the country will get positive impact from that. We have to sort out those projects and implement them quickly.”

PM also asked all the ministries to identify projects, which can be implemented a little bit slower.

Sheikh Hasina said that it is not possible to develop any country without the continuation of the democratic process.

“For 21 years the power was not in the hands of the people. Power was directly or indirectly inside cantonment. The country was run by military ordinances neglecting the constitution of the country,” she said.

She said that there was a farce in the name of democracy and vote rigging was a norm.

“We witnessed those. As a result, Bangladesh could not advance.”

PM said that after coming to power in 2008 the government established Bangladesh as a developing country.

“There is a reason behind this success, that is in the history of Bangladesh, democracy continued without any barrier. We were able to attain this success due to the unhampered continuation of democracy,” she said.

 

Read More: PM Hasina to discuss UK, US visit to media on Thursday

 

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Economy

Modi Likely to Visit Bangladesh in First Bilateral Trip Post-Re-Election

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Indian Prime Minister Narendra Modi is set to visit Bangladesh later this month, marking his first bilateral trip following his re-election.

Initially, Bangladeshi Prime Minister Sheikh Hasina was slated to visit India at the end of June or early July. However, following her attendance at Modi’s swearing-in ceremony in New Delhi over the weekend, plans have shifted. According to the Economic Times, Modi is now preparing for a visit to Dhaka in response to an invitation extended by Hasina.

This prospective visit aligns with India’s ‘Neighbourhood First’ policy, aimed at reinforcing its leadership role in South Asia.

During their meeting in New Delhi on June 9, Hasina formally invited Modi to visit Bangladesh. Although exact dates for the visit are yet to be finalized, the agenda will likely focus on enhancing cross-border connectivity, energy cooperation, and business ties between the two nations.

Sources indicate that India is keen on strengthening its security and defense partnership with Bangladesh, reflecting the strategic importance of this bilateral relationship.

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Moody’s Predicts Further Decline for Bangladesh’s Taka Amid Currency Policy Shift

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Bangladesh’s taka is expected to plunge further into record-low territory as the central bank loosens its control over the currency, according to Moody’s Ratings.

Young Kim, an analyst at the rating firm in Singapore, projects that the taka will likely weaken by another 2% to around 120 per dollar by the year’s end. This forecast comes as the currency has been hitting a series of record lows in recent days.

The central bank’s recent introduction of a crawling peg system is anticipated to align the taka’s value more closely with its rate in the unofficial market, Kim explained. This adjustment is part of a broader package of policies recommended by the International Monetary Fund, which provided Bangladesh with a $4.7 billion bailout program last year. This policy shift aims to help the nation prevent further depletion of its foreign exchange reserves—a factor Fitch Ratings cited when it downgraded Bangladesh’s credit score further into junk status in May.

“Most of the pressure for Bangladesh is external, centered around the fixed-exchange rate that caused a distortion between the market and the official rate,” Kim noted. “This significant devaluation of the taka helps reduce some of these imbalances by narrowing that gap.”

In May, the central bank implemented the crawling peg exchange rate system and set the mid-rate at 117 taka per dollar. This move prompted an almost 8% decline in the currency this quarter. On Tuesday, the taka weakened further by 0.3%, reaching 117.7 against the dollar and closing at a new low.

Amidst the currency devaluation, Bangladesh is also cutting spending and raising taxes to narrow the budget deficit and boost revenues, as the country faces a steady erosion of foreign reserves. To curb inflationary pressure, the central bank has transitioned to market-based interest rates, responding to the fastest pace of price increases seen in seven months in May.

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Bangladesh, ADB Ink $250M Loan Deal for Social Resilience Program

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The Asian Development Bank (ADB) and the government of Bangladesh have signed a $250 million loan agreement to bolster Bangladesh’s social protection system.

Md. Shahriar Kader Siddiky, Secretary of the Economic Relations Division (ERD), and Edimon Ginting, ADB’s Country Director, signed the agreement today at a ceremony held at the ERD in the capital.

“The Second Strengthening Social Resilience Program aims to accelerate reforms by increasing the coverage and efficiency of protection, improving financial inclusion for disadvantaged people, and strengthening the response to diversified protection needs,” stated Country Director Edimon Ginting.

Building on the first Strengthening Social Resilience Program completed in June 2022, this second initiative seeks to improve the policy, regulatory, and institutional framework for social protection in Bangladesh. This program aligns with the government’s Action Plan Phase II of the National Social Security Strategy (2021-2026), aiming to enhance the social protection system’s protective and preventive capabilities.

According to a press release, the program will improve efficiency in social protection program management, increase protection for the most vulnerable populations, and expand the scope of social protection by introducing contributory schemes. These measures aim to reduce vulnerability, social exclusion, and the risk of further poverty.

The program will introduce a beneficiary verification scheme for cash-based social protection programs to minimize leakages. It will also merge two cash-based protection programs for people with disabilities to improve efficiency and effectiveness.

To address climate vulnerability, the program will integrate climate adaptive measures into social protection, including identifying individuals most at risk from climate change-induced disasters to ensure appropriate assistance.

ADB’s support will enhance protection for vulnerable women and transgender people by increasing the number of beneficiaries under the widow allowance program and extending the livelihood support program for transgender individuals.

Additionally, Bangladesh Bank will double its funding for the Small Enterprise Refinancing Scheme for Women Entrepreneurs to improve access to financial services for women small business operators.

Another key objective of the program is to strengthen the governance mechanism of the employment injury scheme pilot, particularly in the ready-made garments sector. It also supports establishing a tripartite committee comprising workers’ associations, employers’ associations, and the government to advance social protection for workers under the Ministry of Labour and Employment, a crucial step in developing the country’s social insurance schemes.

To support the implementation, technical and policy analyses, and capacity building of relevant government agencies, ADB will provide a $1 million grant from its Technical Assistance Special Fund (TASF 7) and another $1 million grant from the ADB-administered Community Resilience Partnership Program Trust Fund under the Community Resilience Financing Partnership Facility.

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