Debt and Development: Where is Bangladesh Headed?
Bangladesh Institute of Development Studies (BIDS) organized the BIDS Fortnightly Seminar 2023 titled “Debt and Development: Where is Bangladesh Headed?” on 29 March 2023 in the BIDS Conference Room. Dr. Syed Mainul Ahsan, Professor Emeritus, Concordia University, Canada, and Visiting Professorial Fellow, BIDS, delivered the lecture in the seminar.
According to Dr. Ahsan, almost 18 per cent of Bangladesh's annual revenue is being used to pay off debt, which is worrying for the country's economy. He indicated that the annual debt service for the country is increasing and that if it increases to, say, 28 per cent, it will have a significant impact on financing necessary projects. Because they have diverse consequences on the economy, long- and short-term loans should be analyzed separately. Whereas central banks shouldn't finance government spending, he suggested, they might be permitted to do so for monetary policy purposes by purchasing government assets on the secondary market. In terms of practice, he argued that almost two-thirds of the sampled nations either forbade or limited central bank lending to the government to only short-term loans. According to him, there could be a disparity in society between those with access to surplus liquidity to profit from the process and those without due to high debt levels and non-market financing rates. He proposed reforms to broaden the reach of taxes and increased the use of technology to ensure automation to improve tax administration.
The seminar was attended by BIDS researchers, academicians, policy-makers, development practitioners, and journalists. Dr. Binayak Sen, the Director General of BIDS, chaired the event.