TIB concerned over IMF loan conditions

The Transparency International Bangladesh (TIB) has expressed concerns over potential discriminatory implications of some of the conditions on which the International Monetary Fund (IMF) is proposing its $4.5 billion loan to Bangladesh.

It has also called upon the lender to be consistent with its own policy against corruption and money laundering.

In a media statement on Saturday, TIB drew the attention of the IMF negotiating team to the potential distributive injustices of some of their proposed conditions such a reform of subsidies on fuel, fertiliser, electricity and gas.

Such measures, and indeed the whole package of conditions, must be designed in a manner that does not in reality add further discriminatory impacts on the already overburdened public, it read.

Referring to the global lender’s policy obligations, TIB’s Executive Director Iftekharuzzaman said, “It is disappointing that the IMF appears to be inconsistent with its own policy and failing to mainstream concrete strategic measures to promote better governance in general, and prevent corruption and money laundering in particular.

“Without such measures, their package of conditions is not only unlikely to achieve the intended purpose, but will also add adverse discriminatory impact on the already overburdened people.”

He further said, “While imposition of conditions, which are often tough and unpleasant, are indispensable part of IMF’s lending business, the question is whether the package represents a strategy that puts public interest first, or on the contrary it is counterproductive for the people.”

The statement adds that the IMF team is rightly concerned about the low Tax-GDP ratio of Bangladesh. But it appears to bank mainly on VAT as the prescription, which is known for its discriminatory impact.

On the other hand, there is no indication of any possible measures to prevent and control widespread tax evasion and money laundering, especially misinvoicing-based illicit transfers. Adoption of the Common Reporting Standard (CRS) for automatic exchange of information on financial transactions within and across borders is one such missed opportunity.

“The IMF has a commitment to specifically and forthrightly address corruption and money laundering. We expect the international lender to practice what it preaches,” said Iftekharuzzaman.