Home ›› 08 Aug 2020 ›› World Biz
The flow of money in global economy -- in the form of foreign loans, aids, investments and central bank sources -- has increased rapidly in response to the negative impact of coronavirus pandemic. Bangladesh government also has been taking domestic and foreign loans to keep the country’s economy rolling amid the pandemic.
However, according to a report by World Bank (WB), Bangladesh's economy can turn around quickly only if corruption is curbed and transparency is established in the use of these funds.
The report, titled “Preventing Corruption in Debt and Investment amid Coronavirus Epidemic", said the biggest challenge for Bangladesh government in utilization of money to deal with the effects of the Coronavirus epidemic is to stop corruption, ensure transparency and accountability in the economy.
According to sources, Bangladesh has borrowed $280 crore or Tk23,746.42 crore from multinational lenders including World Bank.
Also, under World Bank projects, the government has imported various types of protective materials including masks, personal protective equipment and hand gloves to deal with coronavirus pandemic. Already, allegations of corruption are rife in these purchases. Anti-Corruption Commission (ACC) and other agencies are investigating the allegations.
ACC chairman Iqbal Mahmud said, “Corruption is the main obstacle to development. It drags the country backwards. Therefore, we have to work against those who commit corruption by adopting the policy of 'Zero Tolerance'.
He further said, “We proposed to have a representative from ACC to prevent corruption in various projects. However, no response has been received from the higher authority of the government yet.”
“ACC is only able to exercise all its legal powers to curb corruption and will continue its surveillance and activities in various service sectors. But it can only us so far, others concerned should take responsibility too.”
“He said there is no sense of humanity among those who are corrupt even during pandemic. They are profiting from corruption in matters like people’s life and death. Strict legal action will be taken against them,” the ACC chairman added.
In this context, former caretaker government adviser AB Mirza Azizul Islam said, domestic and foreign loans are much needed to recover the economy. However, if corruption is not stopped in the use of these funds, quick and good benefits will not be obtained. If there is corruption, it will take a long time for the economy to turn around.
“The government must first stop corruption then quickly spend the money before morale in the economy gets crushed,” he added.
The World Bank said, “Economic recovery is like in ‘V’ shape. The faster it falls the faster it turns around.”
The country’s economy has suddenly contracted due to coronavirus pandemic. But, large investments, loans and central bank’s massive release of money from its own sources to the market can turn the economy around quickly.
The World Bank report said, developing countries are borrowing from their own sources, foreign sources and multinational corporations to offset the coronavirus pandemic effect. The use of these funds will put all parties involved in a difficult challenge. Because it will be difficult for governments to implement the policy and establish transparency in the use of money quickly. The government may seek the assistance of lending countries and agencies in establishing transparency and accountability.
The World Bank has made several recommendations in this regard. These include the implementation of the conditions of the donor agencies in obtaining loans, government loans, liabilities of government agencies and disclosure of loan information against various instruments to the public.
In addition, in case of proper use of loan money, the government will be limited to keeping accounts properly, disclosing all kinds of confidentiality in the use of money, taking collateral on its own initiative against loan and using it properly.
Bangladesh has already received $730 million from International Monetary Fund (IMF), $380 million from the Asian Development Bank (ADB), $126 million from the World Bank and $350 million from the Asian Infrastructure Development Bank (AIIB) to address the effect of pandemic on the economy. Besides, Islamic Development Bank (IDB) is providing loans for import of fuel oil. Japan International Cooperation Agency (JICA) is releasing $5-7 million in loan instalments every three consecutive months.
